Good luck to Worcester!

Proposed stadium for the Worcester Red Sox.

From Robert Whitcomb's "Digital Diary,'' in GoLocal24.com

I was driving through Pawtucket the other day over its Third World roads and by its decayed-looking public schools. That made me wonder  again why the State of Rhode Island and Pawtucket  would have wanted to enter into a massive public-borrowing scheme to build a publicly owned stadium that would benefit some very rich businessmen in a sport that seems to be in long-term decline.  Instead, why not borrow for such far more important things as transportation infrastructure? What indeed is the opportunity cost in all this?

Wouldn’t the old mill town of Pawtucket improve its economy a lot more  by fixing infrastructure to be used by a very wide variety of people? Barely paved roads are not exactly an advertisement to lure companies, nor are crumbling schools.

And if a  baseball stadium is such a great economic-development  energizer (which it isn’t) how come, even after some expensive McCoy Stadium upgrades over the years, the neighborhood around McCoy  still looks like, well, the neighborhood around McCoy?

The whole PawSox thing, in Rhode Island and now in Worcester, bespeaks a sort of bread-and-circuses approach, in which appeals to romanticism – in this case baseball fans’ --- trump economic  reality. For that matter, what percentage of the population of Rhode Island and southeastern Massachusetts actually  go to PawSox games?

Meanwhile, there’s starting to be some buyers’ remorse in Worcester about the very generous offer to lure the PawSox that was secretly  (and no wonder!) negotiated over the last few months by the city, the state and the PawSox owners. The deal includes more than $100 million in city borrowing, not including interest.  Some of this is supposed to be repaid by a mix of hoped-for taxes and fees in a new development district around the stadium. Will all that development happen? I doubt it.  Note that interest rates are rising and that history suggests that a recession – perhaps a deep one – will start in the next couple of years. The taxpayers’ stadium is supposed to open in 2021.

Robert Baumann, an economist at the College of the Holy Cross (conveniently situated in Worcester) and a nationally known expert on the economics of publicly financed stadiums, gave a hearty thumb’s down to the Worcester deal. Among his remarks in a Worcester Telegram article:

“The summary of {the} research is simple: public money towards stadium construction is rarely, if ever, worth the investment….”

 “{The} improvement and increased spending in one neighborhood usually comes at the expense of the rest of the area. … In essence, new stadiums typically trade off concentrated gains in the immediate area with diffuse losses everywhere else.’’

 “According to Minor League Baseball, per game attendance at International League games this year is currently about 4.9 percent lower compared to last year and 7.9 percent lower compared to ten years ago. …Usually new stadiums come with a ‘honeymoon’ period of about three years where attendance spikes above its long-run trend…. {W}hat happens after the honeymoon is over?’’

“Simply put, this ownership group has the money  {to build a stadium with its own wealth} but pitted two nearby municipalities against each other in order to get the best deal. Given that same public money also funds teachers, cops, and firefighters, this doesn’t strike me as an ownership group that cares much about Worcester or Pawtucket.’’

"The idea that this is going to serve as a catalyst for economic development, which is the hope – and I emphasize the word hope – is misguided," Robert Baade, an economist at Lake Forest College, in Illinois, told the Worcester Business Journal. John Solow, a Massachusetts native and an economist at the University of Iowa,  told the publication, "There's a great deal of consensus among sports economists of all political stripes that this is not a good thing for local governments to be doing,"

But they may well do it anyway in Worcester because of the romanticism of the small percentage of the population who actually go to Minor League games and that old wishful suspension of disbelief. If it happens, it will be a wealth transfer from the middle class to the rich. But it will raise the spirits of local baseball fans, if not necessarily most football, hockey, soccer or tennis fans. Money isn’t everything! The owners are, well, hard-working capitalists seeking to maximize their profit by cultivating the romanticism of their fans and the politicians who seek their support.

Rhode Island Public Radio has a useful discussion on the pros and cons of publicly financed baseball stadiums. To read and hear it, please hit this link.

http://www.ripr.org/post/other-cities-stadium-woes-serve-warning-worcester-and-pawsox

The train station may be a better bet

The Wilkinson Mill, one of  the beautiful old factory buildings in Pawtucket.

From Robert Whitcomb's "Digital Diary,'' in GoLocal24.com:

There’s something  very desperate and  sad about Pawtucket Mayor Donald Grebien’s idea that the Rhode Island General Assembly should consider letting the old mill town finance the entire public part of a Pawtucket Red Sox (aka PawSox) new-stadium  financing deal. The bonds to be sold would supposedly be paid off by letting the city use all the state sales and income tax revenue to be generated by the ballpark for that purpose.

Thus the city would glued to the fortunes of one company, whose revenues in coming decades are impossible to predict with any precision. (Will Minor League baseball be popular in 10 years?) Of course, whatever such a financing agreement says, if the tax revenue doesn’t meet expectations and so Pawtucket can’t cover the debt, the state would have to come in to try to save the city.

I wish that Pawtucket officials would spend more time trying to find ways to leverage for economic  development the coming Pawtucket/Central Falls train station, which will link the old mill city more closely with booming Greater Boston, and less time obsessing about the PawSox as if it’s the only game (so to speak) in town. Better to lure and/or keep dozens of small companies than rely upon one bigger one with very rich out-of-state owners who can easily move their operations.

If Mass. won't help pay to build baseball stadium....

McCoy Stadium, the current home of the Pawtucket Red Sox.

Adapted from an item in Robert Whitcomb's "Digital Diary,'' in GoLocal24.com

Those who think that Worcester is about to grab the Pawtucket Red Sox should consider this news from the (Worcester) Telegram & Gazette.

Hit this link: http://www.telegram.com/news/20170813/worcester-city-councilors-love-idea-of-wooing-pawsox-but-obstacles-loom from the (Worcester) Telegram & Gazette:

“Massachusetts legislators told the Telegram & Gazette …{that} the {state} Legislature is unlikely to put public dollars toward a stadium for a private team. And even if a deal in Rhode Island that seeks to do that falls through, and neither city offers public money, staying in Pawtucket would likely be the shrewder move,’’ a stadium expert told the paper.

“All things being equal, Worcester is probably going to have to pay a higher subsidy to get them,”  said Victor A. Matheson, a College of the Holy Cross economics professor who specializes in stadiums. After all, the Worcester Metropolitan Statistical Area is only about half the size of the Providence-Warwick Metropolitan Statistical Area, which includes Pawtucket.  (Also, Worcester is not on the Main Street of the East Coast -- Route 95. Pawtucket is.)

“It sounds wonderful, doesn’t it?” Senate Majority Leader Harriette L. Chandler (D.-Worcester) said of the idea of the  PawSox moving to Worcester. ”(But) who’s going to pay for it?”

“The reality,’’ she told the paper,  “is that the Legislature has an established precedent of not putting public money into sports stadiums.’’ And Massachusetts is of course a much richer state than Rhode Island on a per-capital basis.

While Massachusetts has spent money for public-infrastructure improvements associated with stadiums (most notably around Gillette Stadium, in Foxboro), that’s not the same as the millions that the PawSox wants from Rhode Island taxpayers to actually build a new PawSox stadium itself in downtown Pawtucket. The Boston Red Sox, by the way,  got no public money for its massive improvements at Fenway Park in recent years.

The PawSox want $38 million in public money in Rhode Island to build a new stadium: $23 million from the state and $15 million from Pawtucket. The PawSox assert that the long-term loans from the public for the project would be repaid from the tax revenues that the new stadium generated and so wouldn’t hurt taxpayers. But of course it’s impossible to know how well the team and stadium would do in coming decades, indeed how popular baseball in general will be.

Anyway, I continue to be very skeptical that the PawSox would go to Worcester. And I hope that they’ll stay in Pawtucket. Had a wonderful evening there a couple of weeks ago.

Worcester pitches to PawSox

Downtown Worcester.

Adapted from Robert Whitcomb's "Digital Diary,'' in GoLocal24.com:

Worcester officials are quietly reaching out to Pawtucket Red Sox owners about moving the franchise there,  perhaps at the vacant Wyman-Gordon Co. property downtown.  Presumably they’d pitch the old industrial city’s location well within the Boston Red Sox orbit, its slowly reviving downtown and its commuter rail service to and from Greater Boston.

But the Worcester metro area is not on the Main Street of the East Coast, Route 95, as is Pawtucket, and, at 924,000 doesn’t have the population size of the Providence metro area, 1.6 million. And many simply find the Providence area more interesting, or at least more complicated.

Further, however, much  as Worcester officials and downtown business leaders might like to get the PawSox franchise and a stadium to go with it, public support would probably fade if and when the PawSox made their formal proposals for aid from the state and the city, especially if  state and local tax revenues fall over the next few months. And foes would cite  as warning the infamous cost overruns and other hassles in the construction of Dunkin’ Donuts Park in fiscally sick Hartford, the home of the hideously named Hartford Yard Goats, a Colorado Rockies farm team. Building baseball stadiums is not for the faint of heart!

Anyway, the PawSox owners clearly want to stay in Pawtucket.

Robert Whitcomb: How to Speed Up Infrastructure Repair

  An irritated citizenry has blocked a bid by the Pawtucket Red Sox, employing very few people and with a mostly seasonal business, to grab valuable public land and erect, with lots of public money, a stadium in downtown Providence, on Route 195- relocation land. The plan would have involved massive tax breaks for the rich PawSox folks that would have been offset by mostly poorer people’s taxes.

The public is belatedly becoming more skeptical about subsidizing individual businesses. (Now if only they were more skeptical about casinos’ “economic- development’’ claims. Look at the research.)

Perhaps Lifespan will sell its Victory Plating tract to the PawSox. And maybe a for-profit (Tenet?) or “nonprofit’’ (Partners?) hospital chain will buy Lifespan, which faces many challenges. Capitalism churns on!

In any event, the stadium experience is a reminder that we must improve our physical infrastructure, in downtown Providence and around America.

Improved infrastructure will be key to a very promising proposal by a team comprising Baltimore’s Wexford Science & Technology and Boston’s CV Properties LLC for a life-sciences park on some Route 195-relocation acres. This could mean a total of hundreds of well-paying, year-round jobs in Providence at many companies. Tax incentives for this idea have merit. (I’d also rather fill the land slated for a park in the 195 area with other job-and-tax-producing businesses, but that’s politically incorrect.)

The proximity of the Alpert Medical School at Brown University, the Brown School of Public Health, hospitals and a nursing school is a big lure. Also attractive is that Providence costs are lower than in such bio-tech centers as Boston-Cambridge and that the site is on the East Coast’s main street (Route 95, Amtrak and an easy-to-access airport).

Rhode Island’s decrepit bridges and roads are not a lure. Governor Raimondo’s proposal for tolls on trucks (which do 90 percent of the damage to our roads and bridges) to help pay for their repair, and in some cases replacement, should have been enacted last spring. It’s an emergency.

It takes far too long to fix infrastructure, be it transportation, electricity, water supply or other key things. The main impediment is red tape, of which the U.S. has more than other developed nations. That’s why their infrastructure is in much better shape than ours.

Common Good sent me a report detailing the vast cost of the delays in fixing our infrastructure and giving proposals on what to do. It has received bi-partisan applause. But will officials act?

The study focuses on federal regulation, but has much resonance for state policies, too. And, of course, many big projects, including the Route 195-relocation one, heavily involve state and federal laws and regulations.

Among the report’s suggestions:

* Solicit public comment on projects before (my emphasis) formal plans are announced as well as through the review process to cut down on the need to revise so much at the end, but keep windy public meetings to a minimum.

* Designate one (my emphasis) environmental official to determine the scope and adequacy of an environmental review in order to slice away at the extreme layering of the review process. Keep the reports at fewer than 300 pages. The review “should focus on material issues of impact and possible alternatives, not endless details.’’ Most importantly, “Net overall (my emphasis) impact should be the most important finding.’’

* Require all claims challenging a project to be brought within 90 days of issuing federal permits.

* Replace multiple permitting with a “one-stop shop.’’ We desperately need to consolidate the approval process.

Amidst the migrants flooding Europe will be a few ISIS types. That there are far too many migrants for border officials to do thorough background checks on is scary.

Fall’s earlier nightfalls remind us of speeding time. When you’re young, three decades seem close to infinity, now it seems yesterday and tomorrow. I grew up in a house built in 1930, but it seemed ancient. (My four siblings and I did a lot of damage!) Yet in 1960, when I was 13, the full onset of the Depression was only 30 years before. The telescoping of time.

The stadium scam: Read 'Field of Schemes'

Don't believe any promises about a Providence stadium deal being "revenue neutral.''  All deals for professional sports stadiums are overwhelmingly for the benefit of the team owners. This note was sent along to me to respond to the attempt by Rhode Island House Speaker Nicholas Mattiello and his pals to cheat the public with a   deal to put a baseball stadium in prime land in downtown Providence. They have thought  that Rhode Islanders were too stupid and/or passive to stop this special-interest scam.

"A message for those elected officials still supporting the PawSox stadium deal: With all the data and analysis now available ) a ‘yes’ vote on a stadium deal allows for only one explanation. You can no longer run your mouth about it being good for business (see Forbes, see WSJ). And you can no longer pretend it will encourage development in the neighborhood and benefit anyone but the owners (see sports economist Victor Matheson and John Oliver.) -- and, ultimately, their political friends.

"Still not convinced and need a book for the beach? Try “Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profits” by Neil deMause and Joanna Cagan. It came out in 2008!''

"Field of Schemes is a play-by-play account of how the drive for new sports stadiums and arenas drains $2 billion a year from public treasuries for the sake of private profit. While the millionaires who own sports franchises have seen the value of their assets soar under this scheme, taxpayers, urban residents, and sports fans have all come out losers, forced to pay both higher taxes and higher ticket prices for seats that, thanks to the layers of luxury seating that typify new stadiums, usually offer a worse view of the action.''

Charles Chieppo: Can Mass. get its tax giveaways under control?

By CHARLES CHIEPPO 

BOSTON

A few months ago, I wrote about Massachusetts Gov. Charlie Baker’s plan to end the state’s film tax credit. Powerful opponents succeeded at killing the proposal, but if a pending piece of legislation becomes law, those special interests will have won the battle but lost the war.

Most states offer an array of business tax breaks that result in significant foregone revenue. In Massachusetts, the amount is in the billions. Legislation backed by state Auditor Suzanne Bump would give her office access to business tax returns solely for the purpose of auditing “tax expenditures,” as the various tax breaks are known.

Under the legislation, the auditor’s office would be able make sure businesses actually qualify for the breaks they receive; track whether state agencies are appropriately pursuing “clawbacks” that require businesses to reimburse taxpayers if the recipient fails to meet requirements of the tax-break agreement; and determine if commitments to job creation or other public benefits have been met.

Predictably, the bill has drawn howls of opposition from business organizations, and the legislature must indeed carefully craft any legislation to limit the scope of the auditor’s review of business tax returns to gathering tax-expenditure data. But the fact that 37 other states already grant the entity that performs their audit function access to this information demonstrates that it can be implemented without making a business that receives a tax break the victim of a public witch hunt.

Other Massachusetts agencies, including the Massachusetts Probation Service and the Department of Transitional Assistance, already have access to the returns. It seems appropriate that tools to make sure that people aren’t wrongfully collecting welfare benefits also should be available to government to ensure that businesses aren’t getting tax breaks they don’t qualify for.

Most business tax breaks are likely to be more effective than the film tax credit, which cost Massachusetts taxpayers about $88 million in foregone revenue during fiscal 2015. A Department of Revenue report found that state taxpayers paid nearly $119,000 for each job created by the credit in 2012.

And Massachusetts is hardly alone. A report from Maryland’s Department of Legislative Services estimated that, even assuming that every production filmed in that state would have gone elsewhere but for tax credits, state and local taxpayers would still recoup just 10 cents on every dollar awarded in credits between 2012 and.2016.

Government incentives to promote economic development are by no means always bad. But with one U.S. Government Accountability Office report finding that state and local tax revenues are not on track to return to pre-Great Recession rates as a percentage of gross domestic product until 2058, taxpayers deserve to know that any funds diverted from schools, transportation funding or other priorities are actually boosting the economy. Providing public auditors with the data to review those incentives is an important step toward providing that assurance.

Charles Chieppo (Charlie_Chieppo@hks.harvard.edu) is a fellow of the Ash Center at Harvard’s Kennedy School. This piece first ran at governing.com.

Editor’s note from Robert Whitcomb: Rhode Island House Speaker Nicholas Mattiello seems determined to raid the Rhode Island state coffers to give what are now called the Pawtucket Red Sox a stadium in Providence with massive tax giveaways as part of the deal. Of course those who don’t get the giveaways will have to make up the lost tax revenue.

Male public officials like to be associated with professional sports teams as an affirmation of their masculinity and a opportunity to meet present and future sports celebrities. Photo ops!

They think it's glamorous to be in bed with these rather rapacious  and  usually very profitable sports businesses.

That even Major League stadiums rarely make macro-economic sense for their communities, let alone farm teams like the PawSox  in cool climates, gets swept aside in what is really a psychiatric and emotional problem. It isn’t serious public policy.

.

No wonder Mr. Paolino hates the trolley idea

It's not surprising that former Providence Mayor Joseph Paolino opposes a proposed trolley line through the city. Mr. Paolino's money comes from the  windswept-parking-lot business. The more mass transit, the worse for his business. With the aging of the population and increasing disinclination of young people to drive, Mr. Paolino doesn't have history on his side. And most people don't like the look of a city with a lot of parking lots, as opposed to buildings. Parking lots are profoundly depressing.

Still, he's probably right: The city can't  afford the trolley. now. Even more, it can't afford the grotesque giveaway to the Pawsox gang.

xxx

The awful Amtrak derailment in Philadelphia reminds me of America's grossly underfunded transportation infrastructure and that we need more rail lines up and down the Northeast Corridor so that a disaster on one set of tracks doesn't stop all rail traffic.

--- Robert Whitcomb

When stadium is empty all year, not just 5 months

After reading this piece, check out this link, which includes one of the insiders in the deal below, Tom Ryan. To add to the idiocies (for the public) of a proposal by a small group of rich political insiders to put a Minor League baseball stadium on land in the middle of Providence, may I remind people that companies have little loyalty these days to their employees or loyal customers. The loyalty in the current version of American capitalism is mostly one way -- the loyalty of the owners and senior execs to themselves.

Remember when one of the insiders, Terry Murray, moved Fleet Financial Group  from Providence to Boston so he could be a bigger player?

When the new Pawsow owners get a a nice offer (as they will one day) to move the farm team to some other  sucker burg (Omaha, Duluth, Ocala, Fla.?) they will do so promptly, leaving an empty stadium on land where there could have been hundreds of high-paying, year-round jobs.

Instead of having the taxpayers fork over  millions a year for this boondoggle, why not increase Governor Raimondo's new $1.3 million "Real Jobs RI" project to better train and place workers.?

Employers cite the lack of skilled workers as the biggest impediment to moving to, or expanding in, Rhode Island. The lack explains much of why the Ocean State economy lags behind that of most of the Northeast.

Meanwhile, of course,  staggeringly myopic (or just cynical) state  union leaders push to build the stadium because of the construction jobs. When those jobs disappear in a year or two after construction starts, the only jobs at the stadium will be a few dozen minimum-wage positions --- for perhaps seven months of the year. The rest of the time the taxpayers will have to pay them unemployment compensation and help cover their Medicaid.

But the six-months-and-a-day residents of Florida involved in this project won't have to worry about that, as they laugh all the way to the bank with tax money from poorer people and get to show how masculine they are by associating themselves with a sports team.

Bread and circuses, and government by deal, march on.

-- Robert Whitcomb

38 Studios Memorial Stadium

"Down the Drain (sublimated metal with float backing), copyright BOBBY BAKER PHOTOGRAPHY

The plan to put up a stadium for the Red Sox farm team now known as the Pawtucket Red Sox on redevelopment land in the middle of Providence makes n0 economic sense, except perhaps  for a few insiders.

For a few mostly minimum-wage jobs  from April to October, land that could be used for enterprises that could employ hundreds of well paid people in such fields as bio-tech and even light assembly would be taken out of use. This project is a plaything and ego trip for a  few rich politically connected operators who want to wrap themselves tighter in the macho world of baseball and send much of the bill to taxpayers with much less money than them.

Readers can research just how macro-economically over-rated are stadium projects for rich professional sports teams, even for the Major League teams, let alone Minor League teams such as the soon-to-be-late-lamented PawSox.

Another thing to remember is the remarkable ability 0f businesses to abandon their followers without warning. The entity that would like to call itself the "Rhode Island Red Sox'' could decide to close up shop and move to greener pastures, or just close up shop, period. That would then leave an empty stadium taking up space that could have been taken up by offices, labs or even a small factory where at least some people could continue to work. What would we do with an empty stadium in such a place?

After the strategic use of tax credits, the local (or Floridians six months a year plus a day) could have this stadium built at no cost to themselves, and then rake in some moolah until they bail out.

-- Robert Whitcomb