Experts confident new stadium would draw fans

Experts confident new stadium would draw fans

Tax incentive zone, league’s responsibility also come into focus at third hearing

PAWTUCKET – Experts at a third hearing on financing of a new downtown stadium in Pawtucket last Tuesday, Oct. 3, testified that they expect development of the facility to dramatically increase attendance numbers for the Pawtucket Red Sox.

International League officials also testified to Senate Finance Committee members about the league’s obligation to maintain all 14 teams, including the PawSox, in the league. While stopping short of saying the league would back the borrowing for the stadium in the unlikely event that the team fails financially, they said they would do everything possible to make sure the important league member succeeds.

The committee also heard from experts on a planned tax increment financing, or TIF, zone planned around the new 9,500-seat stadium at the Apex Department Store site, an area covering more than 60 acres where new tax growth would go toward paying the city’s portion of the debt on the project.

A fourth hearing on the financing deal is set for today, Wednesday, Oct. 11, at 6 p.m. at the New England Institute of Technology in East Greenwich.

The House Finance Committee was set to hold the first of two planned hearings on the financing deal on Tuesday, Oct. 10.

Senate Finance Committee Chairman William Conley, of District 18, East Providence and Pawtucket, announced that due to the “keen level of interest” in the stadium hearings, his committee will add a seventh hearing, to be held as a “wrap-up conclusion of the process,” on Tuesday, Oct. 24, at the Statehouse.

State lawmakers are considering legislation to allow borrowing for a new stadium, with $23 million paid by the state, $15 million by the city of Pawtucket, and another $45 million by the Pawtucket Red Sox. Bonds would be issued through the Pawtucket Redevelopment Agency. Team and city officials say revenues from building the new stadium would pay for the project.

Representatives for consultant Brailsford & Dunlavey (B & D) last Tuesday said “attendance is the key driver” in making the economics and projected fiscal benefits of the project work. Ryan Conway and Bryan Slater, senior project managers, said they’re confident their projections on growth in attendance, from about 6,000 people per game to 8,100 per game (550,000 per year) will back their estimates on economic benefits, which B & D projects will generate $93.3 million to the state and $36.5 million to the city over 30 years.

That 35 percent increase in attendance would put Pawtucket in the same tier as International League attendance leaders Lehigh Valley, Columbus, Indianapolis and Louisville. The 8,100 estimate accounts for a drop-off after the initial excitement of a new stadium fades, they said.

Committee members questioned Conway and Slater about their estimates, noting that a lot hinges on the stadium meeting those attendance numbers. A report from B & D directs the blame for lower attendance at the less-than-ideal location of McCoy Stadium and the deteriorating condition of the facility. Just as the modern car has features people never would have dreamed of decades ago, new stadiums also need updating to meet the times, it finds.

Today’s consumer wants more than the baseball fan of decades ago, said International League officials. They want to be entertained, to be able to walk around with their children, to experience “more than just baseball” for their entertainment dollars.

Randy Mobley, president of the International League, cautioned lawmakers that as they make their judgments on financing a new stadium, it’s “not just a structural issue repair” pertaining to McCoy Stadium.

“I love McCoy as much as the next guy, but her time has come,” he said.

Addressing Sen. James Seveney’s questions about faltering attendance numbers at McCoy, Slater and Conway said that minor league baseball is a “very stable business model” with “stable trends” and a “strong market.” The proximity of the Boston Red Sox builds in a strong brand affinity.

Slater said fans have “higher expectations than ever” about what the experience at the stadium should be like, and McCoy generally isn’t fitting that bill. Baseball teams today need to be about family entertainment, he said, not just putting up some bleachers and “hope the die-hards show up.”

Sen. Betty Crowley, of District 16, Pawtucket and Central Falls, asked about the connection between newer stadiums and better attendance. B & D’s experts said stadiums for both Lehigh Valley and Columbus are more contemporary, while facilities in Indianapolis and Louisville were built around the year 2000.

Sen. Susan Sosnowski, of District 37, New Shoreham and South Kingstown, said she’s never been to McCoy, but can see why its current location might be problematic for some people, and why a move to the Apex site next to I-95 would make it easier to get to. People often get lost in Pawtucket, she said.

Seveney and others said they’re concerned about whether there will be a long-term maintenance and capital improvement plan and who will pay for it. Slater and Conway agreed that maintenance plans are often neglected, and said they always build in a healthy sum for improvements when planning a facility (the PawSox have committed 50 percent annually to a ballpark improvement fund).

Senators questioned Keenan Rice, president of MuniCap Inc., on the plan for the TIF zone around the new stadium. Rice said a TIF “can be a very valuable tool” in paying for a component of a project like this.

Seveney questioned what happens if development in the area is slowed and new tax money isn’t coming in, noting that the I-195 land in Providence is only now seeing development five years after it was supposed to happen.

“That’s a long dry period,” he said.

Rice said it’s critical to have some pieces in place on ancillary development, but also noted the difficulty of getting companies to commit to investing in a project without state legislation already in place. State Sen. Ryan Pearson, of Cumberland, noted that tying the city’s obligation to new development carries the biggest risk.

Rice said having multiple pieces in place in the downtown area, such a new train station, new craft beer hub and historic sites, creates the synergy needed for “catalytic development.” Conley asked if it’s fair to conclude that moving a stadium from a more suburban setting to more urban setting is beneficial, and Rice said yes.

Rice said he’s excited about the “real possibilities” in downtown Pawtucket.

Mobley suggested that lawmakers check with other states on how TIF zones have worked out for them in creating a new environment around their stadiums, saying in many cases they’ve “paid dividends in spades.”

Dylan Zelazo, chief of staff to Mayor Donald Grebien, said this week that city officials are mulling many options to “mitigate the risk” if development around a new stadium is slowed for a couple of years. It will become easier to determine exact numbers as the city secures development commitments beyond the 50,000 square feet of new development the team has committed to in writing, he said.

Zelazo said city officials are committed to paying Pawtucket’s $900,000 in annual debt service without impacting the tax rate.

“It’s very firmly our position that we will not hit property taxpayers on this,” he said. In 2020, when the stadium is projected to come online, the city should see about $1.1 million in annual debt payments come off the books, reducing the risk of adding new debt, he said, and there are other options on revenues that would prevent a hit to taxpayers.

Finance Committee members also questioned representatives from Minor League Baseball on the league’s connection to the project.

Mike Tamburro, vice chairman of the PawSox, noted that attendance at McCoy Stadium jumped from 475,000 in 1998, before a major renovation, to 596,000 when the project was done in 1999.

Mobley said no team in the International League “has the staying power of the Pawtucket Red Sox.” He emphasized that the PawSox, like any other team in the league, has obligations to the league that must be met. The league has never seen a default scenario, he said, and doesn’t expect to here.

Though Mobley wouldn’t say that the league would back the team’s bonds, he said the league president has the authority to “assess members equally for the league to conduct its business.”

If, in the unlikely event that the team does fail, the league would pursue another franchise to meet the team’s obligations, said Mobley. A combination of bringing in a new team and getting the league involved could also be possible, he said.

Pearson asked if one way of meeting the obligation is to bring in a new team to meet the obligation of the PawSox. Mobley said it makes the most sense to do everything possible to keep the team in place, but “if we are talking about absolute doomsday situations, theoretically (yes),” he said. He noted the “unprecedented private support” being offered by the PawSox in the stadium deal.

Addressing concerns about the future of baseball as a spectator sport, Scott Poley, senior vice president of Minor League Baseball, told committee members that Minor League Baseball saw attendance of 41.8 million people last year. That was the 13th consecutive year of more than 41 million people, he said, despite having 97 more rainouts than a year earlier. Fourteen clubs set single-season attendance records, he said.

Poley and Mobley rebuffed suggestions that a new team could simply move into McCoy if the PawSox leave. McCoy would still be within the International League’s territory, they said, and they would not allow another minor league baseball team to come in.

Tamburro provided the committee with a document listing the team’s commitments to the stadium project. In addition to the 50,000 square feet of new commercial development in the downtown or on the riverfront, and a 50 percent contribution to a ballpark improvement fund, he pledged that the PawSox will stay in the state through 2050, that the team will cover construction cost overruns, and that it will invest $45 million into the public ballpark, including a $12 million equity contribution, among others.