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Economists: Development Key to PawSox Ballpark Deal

Pawsox Ballpark at Slater Mill rendering

The ability to generate revenue through surrounding development is crucial to a proposed Pawtucket Red Sox (Class AAA; International League), according to two economists. 

There has been considerable debate recently over a proposal to build a new PawSox ballpark at the site of an Apex department store in Pawtucket. Under the financial framework, the team would pay $12 million upfront as part of a $83-million project that includes $71 million in bonding ($38 million would be covered by city and state taxpayers; the rest would be paid back by the PawSox owners).

Proponents of the project have touted its potential economic impact, specifically that it would help to bring new development to the surrounding area. Some, however, have questioned the funding plan, and a request was made recently for the team to open up its financial books.

In a story from The Providence Journal, two economists–Mark S. Rosentraub and Nola Agha–discussed the merits of the proposal. Each sorted through various factors that they would consider in the plan, but emphasized that the ability to bring development into Pawtucket was crucial to making it work. More from The Providence Jorunal:

Unless sports venues are part of a broader real-estate development strategy, though, Rosentraub is singing the same tune as in his 1997 book “Major League Losers”: “If you don’t do the real-estate development, you can’t win.”

Rosentraub has examined the PawSox’ quest for a new stadium because the Pawtucket Foundation, which supports the stadium-financing plan that state legislators are now considering, contracted with the University of Michigan for his work.

Rosentraub has determined that the deal is worthwhile for the city and the state because of the team’s pledge to have a development group build retail space near the stadium.

However, that commitment to develop 50,000 square feet — without state incentives — is not enough to raise the revenue necessary to pay off the bonds that would be sold to raise cash to build the stadium, says a university professor who has specialized in minor-league baseball’s impact on communities.

“If I was the city … I would ask for more,” Nola Agha, an associate professor in the University of San Francisco’s sport management program, said in an interview. “For the most part, cities get the short end of the stick. Fifty thousand square feet seems like a pretty small amount.”

Officials at the state and local level have been debating the project, but there were calls recently for the team to release more financial data information.  As was noted here last Thursday, the argument from Senate Finance Committee Chairman William Conley is that senators on the committee, as well as some city officials, need more proof that the team is financially solvent and capable of backing the public bonding.

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