“The intent of the filing is to compel the City Council to bring the stadium issue to a public referendum,” said the press release, “and allow the voters of Providence to determine its outcome.”
Sam Bell, president of the Stop the Stadium Deal group, said more than 1,500 signatures were collected. He said 1,000 are needed to compel the City Council to consider a specific ordinance.
“If the Council doesn’t pass the ordinance unamended by that point, we will be able to force it onto the ballot by gathering signatures from five percent of Providence voters,” Bell said. “However, given the strong public pressure, we are confident this won’t be necessary.”
The ordinance would forbid a “stadium” or “athletic facility” on the PawSox preferred parcel, and would mandate to all new stadiums to “pay property tax at the full commercial rate” and that “No public money from the City of Providence shall be used directly or indirectly to subsidize or otherwise provide any financial benefit to any new stadium.”
Said Bell, “For years, wealthy owners of professional sports teams throughout the country have been using public monies to increase the value of their private investments. The voters in Providence want the opportunity to express a resounding ‘NO’ to such an irresponsible use of public monies.”
]]>Or is it?
The late African freedom fighter Amilcar Cabral once told his troops “tell no lies, claim no easy victories.” There are several reasons that would indicate this is not the end of the PawSox putsch, just a break before a real offensive. Even if the parcels designated as parkland remain as such, that does not mean Larry Lucchino is done, not by a long shot.
First, consider the fact that, following the Dueling Pianos forum on August 25, Lucchino was spotted the next day touring the site of the old Victory Plating factory, now called Victory Place. Throughout the I-195 land forum, members of the audience were almost unanimous in opposing building a stadium on that parcel in particular. But several members of the audience did in fact suggest Victory Place as an alternative they would be open to see developed into a stadium. The crowd at Dueling Pianos that evening was not unanimous in opposition to a state subsidy for a ballpark, they were just opposed to the parcel in question being used for that purpose. There is a big difference there.
Second, Gov. Raimondo told WPRO that the negotiations continue despite the revelations about Brown regarding the land. She said then:
As I’ve said all along, it’s a complex deal, you have to get it right for the taxpayers, we’re working through it but there are definite obstacles and we can’t rush through them.
Coming from someone who said her scheme to bail out Wall Street was ‘pension reform’, that does not sound like any conversations involving Mr. Lucchino have been terminated.
Mattiello was subjected to a lot of constituent pressure following a round of canvassing of his district by stadium opponents. He also is probably feeling a little stress around the recent revelations about 38 Studios, which show that his mentor William Murphy and his predecessor Gordon Fox were pulling strings long before former Gov. Carcieri laid eyes on Curt Schilling. He has said he is open to having all the facts come out regarding the ongoing litigation so that the public can know the truth. But if he were serious about it, why has he yet to grant Oversight Committee Chair Rep. Karen MacBeth the subpoena power she has been requesting since Mike Stanton profiled him for Rhode Island Monthly in September 2014? Back then, Mattiello was sticking to the original narrative about how the 38 Studios deal was concocted and had a rather problematic excuse regarding MacBeth:
As for 38 Studios, Mattiello says that it was “stone-cold conservatives” — Schilling and former Republican Governor Donald Carcieri — “who put this together.” Carcieri “was trying to throw a Hail Mary pass” to jump-start the economy.
Then [Gordon] Fox and friend Mike Corso, the shadowy 38 Studios agent and Providence tax-credit king, got involved and pushed it through a largely unsuspecting legislature… Representative Karen MacBeth, whom Mattiello had made chair of the powerful Oversight Committee in exchange for her support for speaker, is publicly challenging him on 38 Studios. MacBeth is upset that Mattiello won’t allow her to subpoena witnesses to investigate, which she says he promised during a meeting at a McDonald’s to secure her vote for speaker. Mattiello says he never explicitly promised subpoena power. While he favors a full airing of the facts, he says, he doesn’t want to interfere with the ongoing state police probe or civil suits. Furthermore, he questions going to the time and expense to subpoena witnesses who would likely take the Fifth, given the other investigations.
If he was so worried about the expense of a few subpoenaed testimonies before the Oversight Committee, what could possibly have changed his mind in regards to a construction project that economists agree is a way to loose money and proposed by a man who left Baltimore and San Diego rueing the day they met him?
More than likely, this is the reality of the situation: Lucchino has struck out once but will be up to bat again very soon. We are approaching an election year where Mattiello and the rest of the General Assembly are up for re-election but Gina Raimondo is not. She is also trying to get her tolls bill passed. The construction trade unions have not rescinded their endorsement of a stadium proposal. Lucchino has not come forward and said he will stay in Pawtucket. The Providence Journal, who are always to the right and almost always in the wrong, to paraphrase Gore Vidal, continue to print editorials in support of a ball park, which is a meter of how viable their sources think a deal is. More than likely, stadium subsidies will become a bargaining chit following the November election, Mattiello will push the toll bill through in exchange for support for a publicly-funded stadium. All the while, he will hem and haw about due process while quietly praying that the State Police don’t produce a damning report akin to the one regarding Allan Fung that shows he was not totally oblivious as the Number Three on Smith Hill regarding what Number One and Number Two were dreaming about video games until after the polls close on November 8, 2016.
Like Yogi Berra said, it ain’t over ’til it’s over.
]]>One of the more unique moments toward the end when, referring to issues related to the intersection between patrons of the night clubs downtown and residents of the Jewelry District, Syd McKenna tried to make it into a class-ethnicity issue. She tried to rebuke Steele and say that the PawSox would be welcoming for all Rhode Islanders, whereas the opposition was elitist and didn’t welcome certain segments of the population. As we have seen earlier, the reality is that stadium construction causes massive public debts and, as is the case with Rhode Island, these shortcomings would probably be taken out on the poor.
]]>Let’s begin with Fenway Park. According to the City of Boston Tax Assessor’s online portal, team owner John W. Henry owns four parcels of land that are affiliated with the Red Sox organization, properties he pays very substantial taxes to the city on, as seen below.
At the time of the original PawSox stadium proposal, the ownership claimed that their bid for a tax-free property was a reasonable and standard arrangement. This and other matters detailed below will demonstrate just how blatantly untrue that claim was and remains.
Consider the funding of the New England Patriots. When Gillette Stadium opened in 2002, it was a project that team owner Robert Kraft had asked for no public aid in commissioning or constructing. For an article surveying the costs of various venues in the Massachusetts, Bruce Mohl and Jack Sullivan wrote for CommonWealth Magazine:
Gillette Stadium in Foxborough also pays about $2 million, but not in the form of property taxes. Randy Scollins, Foxborough’s finance director, says the town owns the land underneath the stadium under an arrangement set up in the early 1970s to help lure the NFL team to the area… Under the arrangement, the Patriots make in-lieu-of-tax payments to the town funded by ticket fees paid by fans. Foxborough receives $1.42 for every ticket sold to soccer and football games and $2.46 for every ticket sold to concerts and other special events.
Scollins says the ticket fees are likely less than what the town would receive if the stadium paid property taxes, but he says it’s an arrangement that has worked well, particularly since the Kraft family has opened Patriot Place near the stadium, adding significantly to the town’s tax base.
The Patriots are not a tax-exempt organization and this past March, NFL Commissioner Roger Goodell announced the NFL would be giving up its 501 (c) 3 status entirely.
But there is one interesting exception to that rule, the Green Bay Packers. The team is the only not-for-profit, publicly-owned major sports franchise in America, as laid out in a New Yorker Magazine article several years ago. According to this 1999 report from the Wisconsin legislature, the team has an interesting ownership and management diagram:
Approximately 109,700 individuals own shares of Packers common stock but do not receive dividends or profits as a result of stock ownership. The shareholders elect the Packers’ 45-member board of directors, whose members serve staggered three-year terms. The board appoints seven of its members to an executive committee that is responsible for monitoring operations, which includes hiring and evaluating the performance of the president and chief executive officer.
The New Yorker article by Dave Zirin is impressive and worth reading in full, but this quote especially stunned me:
Volunteers work concessions, with sixty per cent of the proceeds going to local charities. Even the beer is cheaper than at a typical N.F.L. stadium. Not only has home field been sold out for two decades, but during snowstorms, the team routinely puts out calls for volunteers to help shovel and is never disappointed by the response.
If one examines the Articles of Incorporation of the team itself, they state clearly that the actual act of playing football is merely incidental to its true mission, “a community project intended to promote community welfare and that its purposes shall be exclusively charitable“. In this 2012 paper for the Oregon State Bar Nonprofit Organizations Law Section, Bay Toft-Dupuy writes:
Guided by the nonprofit nature of its organizational articles and community ownership structure, the Packers operate in an arguably nonprofit fashion. All profits are either invested back in the team or donated to local charities with a six million dollar impact reported in 2012 for one fiscal year alone.
Staying in Wisconsin for a moment, there is a recent article by Michael Powell at the New York Times regarding the Milwaukee Bucks that shows what happens when a sports team talking like Lucchino gets its way:
We’ll keep the Bucks in Milwaukee, the owners said, if the public foots half the cost of a $500 million arena. (The owners spoke of their “moral obligation” to the city and pledged $100 million toward their arena, with the remainder coming from other private funds.) N.B.A. officials acted as muscle for the owners and warned that if Wisconsin did not cough up this money within a year’s time, the league would move the team to Las Vegas or Seattle… Gov. Scott Walker signed a bill Wednesday to subsidize the arena, which could cost the public twice as much as originally projected… Milwaukee County’s portion of arena debt amounts to $4 million annually for 20 years; if the county fails to come up with its payments, the state could deduct the money from annual aid to the county. Abele has spoken of scrounging up the county’s payment by allowing the state to crack down on the county’s many debtors. That sounds fine in theory. In practice, it could mean hounding working-class homeowners for property taxes or pursuing residents who have delinquent ambulance bills. No county can afford to let taxes go uncollected, but that strategy registers as a touch repellent. [Emphasis added]
As the discussion of stadium building has become a national conversation, thanks in part to a recent piece featured on HBO’s Last Week Tonight with John Oliver, the conversation has now evolved to the point where Gigi Douban of Marketplace Business asked in an August 13 piece whether funding a sports complex is an investment or a subsidy.
When a government pours money into a sports venue, sometimes it’s hard to tell whether it’s a subsidy or an investment, Mark Rosentraub, sport management professor at the University of Michigan, says.
“It becomes an investment when there’s a clearly defined set of returns that are worth the risk of any investment,” he says.
Rosentraub says if the arena anchors a bigger redevelopment plan, that’s when it tends to make a city money. But arenas alone don’t equal jobs and new businesses, especially in a quiet city like Milwaukee, according to Andrew Zimbalist, economics professor at Smith College.
“If you’re hoping to promote the local economy by attracting or keeping a basketball team,” he says, “it’s not something that happens.”
Jason Notte over at MarketWatch wrote a piece on July 21 I encourage you to read in full but which I will summarize. Titled 5 CITIES GETTING THE WORST DEALS FROM SPORTS TEAMS, he tells the tale of woe for Milwaukee and four other municipalities that are getting the raw deal from major sports. Minneapolis was promised they would only pay $500 million but are now on the hook for $678 million for a new arena for the Minnesota Vikings. Cobb County, Georgia is borrowing $397 million from the funds for infrastructure and education so to give the Braves baseball team a new home. Glendale, Arizona, a sports mecca, is forking over $308 million for the Arizona Cardinals football team, $225 million for the Arizona Coyotes hockey team, they paid millions more for spring training sites used by the White Sox and Dodgers, and lost money hosting the 2008 Super Bowl, with more losses predicted for this year’s big game. Finally in the District of Columbia, residents are paying $150 million to keep the DC United soccer club from heading to the suburbs, funds that are coming out of badly-needed school renovation line items.
Beth Comery of Providence Daily Dose posted a story on July 29 called ATTENTION JORGE: MAYORS EVERYWHERE SAYING NO TO STADIUMS where, taking off from the recent move by Boston Mayor Marty Walsh in effectively canceling the Boston Olympics, she strongly hints that approving a stadium might be political poison if the Mayor Elorza hops on the bandwagon. It’s a pretty well-duh statement to say that Nicholas Mattiello has reached the highest point in his career, his anti-choice, pro-austerity, and anti-gun control stances would never fly with the DNC, who help fund national House and Senate races. But Gina Raimondo and Jorge Elorza do not strike me as anywhere near finished with their ascendancies. If they wish to hold onto votes with the ever-valuable East Side of Providence, folks who are also known for their wonderful campaign fundraisers, and the fiscally-cautious hinterlands of Cranston, Warwick, Johnston, and South County, they need to show some real strategy and weigh their options. Do they obey the wishes of the PawSox owners and fold, potentially stamping a noticeable black mark on their records, or do they follow the great unwashed masses who will one day be deciding if they keep their jobs?
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