A Two Million Plus Dollar a Year Loser of a Stadium: What Does the Governor See that Almost No One Else Does?

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Two million dollars per year because that is the projected annual loss for state taxpayers in the just-unveiled proposal by the new owners of the Paw Sox for construction of a baseball stadium in Providence. It’s worth repeating: the numbers offered by the Paw Sox owners THEMSELVES have state taxpayers losing two million dollars per year.

“Plus” – and the plus could be quite a large figure – because the president of the Providence City Council has told WPRI’s Dan McGowan that Providence would be looking to state taxpayers to pick up the property taxes that the owners of the Paw Sox have requested to be relieved of. This suggestion would be a laff riot, especially in light of the state’s multi-hundred million dollar structural deficit, except that the council president seemed quite serious about it.

Earlier today, John Marion tweeted out,

Received a call from someone looking to know if there is an organization actively opposing the PawSox stadium deal. Anyone know if there is?

Most of the reaction I’ve seen and heard can be described as “actively opposing” the stadium (also: vigorously opposing, seriously concerned about and downright appalled by), though a single-purpose opposition organization – presumably what Marion’s caller meant – has not yet popped up. Even Bob Plain over at RI Future, never shy about spending tax dollars, has expressed skepticism about the proposal.

In fact, it would be far quicker to list those who support the Paw Sox proposal. This list so far consists of the building trades unions – not a shock as the Paw Sox owners have promised that the proposed stadium would be built with union labor.

Enter Governor Raimondo, who spoke to NBC 10’s Bill Rappleye today.

“I also think this has the potential to create a lot of jobs – immediately construction jobs,” Raimondo said. “It brings people into the city and could catalyze other economic development in the area, which has been done in other cities. If we do it right, I think it could be a good piece of our economic puzzle.”

The Convention Center Authority, 38 Studios and others – the very last thing that state taxpayers can afford is yet another costly economic development loss leader. But by the Paw Sox owners own calculations, that’s exactly where we would be headed with a minor league baseball stadium in Providence. We would respectfully ask to see your numbers, Governor Raimondo. How exactly would a brand new $2+ million hole in the budget make a good contribution to the state’s “economic puzzle”?

Monique Chartier is Communications Director of Rhode Island Taxpayers, a non-partisan taxpayer and business advocacy organization, and Editor of the R.I. Taxpayer Times.



  • Max

    New jobs Governor? I never realized there were no grounds keepers, ticket takers, and hawkers in Pawtucket. What a fraud.

  • Mike678

    Concur–consider the second and third order effects. Why do they need concessions? Because RI is too expensive–utilities, taxes, etc. Who is next looking for a handout to stay? CVS?

  • ShannonEntropy

    I don’t have Gina’s or Elorza’s email addies … could someone please forward the following article to them?? =►

    http://www.outsidethebeltway.com/public-financing-of-private-sports-stadiums/

  • ShannonEntropy

    Any economist looking at this stadium “deal” would instantly recognize that it represents the worst kind of one the most destructive economic activities, called RENT-SEEKING

    Indeed, you could make the argument that rent-seeking is how Skeffington makes *all* his money

    Here are two articles on the subject, the second showing why rent-seeking is so damaging to economic growth =►

    http://www.forbes.com/sites/davidmarotta/2013/02/24/what-is-rent-seeking-behavior/

    http://scholar.harvard.edu/files/shleifer/files/rent_seeking.pdf

  • Greg

    This type of business activity can be positive provided the majority of fans who attend games are drawn from Mass or Ct thereby fulfilling the concept of a basic business i.e. drawing $$$ into the State. However, like any new venture, the risk should be borne by the stockholders and, or bondholders not the taxpayers, period. Neither should the State guarantee any bonds for such businesses. Also, as Justin pointed out in his most recent post, it is morally bankrupt for the State to engage in crony capitalism. Instead, winners and losers should be left to the free market system which is the best self-regulating, economic system ever created by man.

  • Tommy Cranston

    The Democrats voted to voluntarily pay the insider 7% 38 Studio bonds-and the suckers re-elected them. Now they will pay $120 million for 39 Studio-and the suckers will re-elect them next year.
    We deserve EVERYTHING we get in this state. Don’t blame Skeffington or Fox or Corso, blame your family and friends.

  • Henry Bowman

    The ProSox deal stinks of political cronyism and stinks badly..

    The new owners of the PawSox have already hired Robert Goldberg, one of the state’s most influential lobbyists, to represent its interests at the State House in order to amend state law(s) to their favor so they can be given the land a stadium will be built on at no cost – Current State law requires “the sale or lease of all such surplus parcels of land at fair market value, and the re-use and development of such parcels to be beneficial to the city of Providence and the State of RI and advantageous to the public interest.”

    The new owners want a tax stabilization deal as well. While they make millions, the new owners will get a tax deal that will either (a) eliminate their taxes for X amount of years (just like the 20yr deal the Providence Place Mall got) or (b) set a low tax rate that will remain the same while taxes on your home and vehicle continue to rise almost yearly.

    In an interview with WPRI reporter Tim White, James Skeffington said that while the stadium will be built with private funds, they would need the state to lease the stadium in order to guarantee those funds (like co-signing a loan) and the team would sub-let the stadium from the state.. Now, if you didn’t fall off a pumpkin truck yesterday, you will realize that what that means is that WE THE TAXPAYERS will be on the hook for a stadium costing upwards of $70 million (38 Studios Redux) should anything go wrong.

    Ask yourself why these millionaires are not risking their own money and they want financial assistance from the state? I would be willing to wager that if you did a financial check, you would find that between them these millionaires have more than $70 million in assets with which they could guarantee the loan. – If a project were financially sound, banks and investors would lend them the money readily and there would be no need for millionaires to be seeking a state guarantee of their funds.

    This deal stinks, and stinks badly..

    State taxpayers have already been blackmailed into footing the bill to revamp McCoy Stadium on two occasions by owner Phil Anez who threatened to move the team to New Jersey, and later by owner Marvin Adelson, who threatened to move the club to Massachusetts. On both occasions the taxpayers were told that the upgrade would help the states economy. On neither occasion has that occurred.

    Exactly what kind of businesses can we expect to see around a new stadium? Restaurants or bars that pay a low service wage?? Haven’t we seen enough of that already? A new stadium is unlikely to attract any other kind of new business, a quick look at the area around McCoy stadium should make that plainly obvious. In its 70 years of operation, the PawSox and McCoy Stadium have failed to attract any other kind of new business to RI. Are we supposed to believe that by cutting Skeffington another tax deal that the Providence Sox will somehow make new business appear in RI?? How? In the form of a Unicorn and Rainbow factory?

    Thanks to Mr. Skeffington – for the past 40 years the taxpayers of Rhode Island have been paying for the sins of politically connected cronies by way of moral obligation bonds for failed projects that voters never approved. Today, Rhode Island taxpayers are being forced to pay $112.6 million for a moral obligation bond issued by EDC for 38 Studios in their video gaming scheme, which voters never approved.

    Have you taken a look at the area around the Patriots stadium in Foxboro lately? Or Fenway in Boston? Is there any business that was attracted by the clubs that creates anything but low paying service industry jobs??.. and those are professional clubs, not AAA minor league teams like the PawSox.

    Additionally, Fenway Park, which is still good enough for the BoSox is almost twice the age of McCoy, which is a family friendly venue. A new stadium built in Providence will see a rise in the cost of tickets and concessions. Then one has to ask which politically connected crony will be awarded the new parking concession. — oh yes, you’ll be paying to park and then walking across a pedestrian bridge over the Providence River to get to Skeffington Stadium.

    A very small percentage of RIers actually attend PawSox games, as evidenced by their inability to fill the stadiums 10,000 seats. Last years official attendance was the lowest ever, just over 551,000 – and that includes those who attended multiple times. – assuming that each attendee went to 2 games, that means the PawSox attracted 276,000 people. Less than 20% of the states population.

    With RIs middle class being taxed to the wall already, I think it unfair to saddle everyone in the state with more tax for the benefit of a privileged politically connected few when that money can be put to better use on schools, roads, infrastructure, or so many other things that would benefit the state as a whole.

    RI needs the type of businesses that will provide jobs and generate tax revenue year round in order to reduce the states deficit, not something that will be used only a few short months out of the entire year when the weather is mild and remain idle the majority of the year.

    This deal stinks and stinks badly. – RIers should contact their State Representatives and Senators along with Speaker of the House Nick Mattiello and express their displeasure with this deal.

    Doing what we’ve always done, will get us what we’ve always gotten.

    Screwed by the corrupt RI Political Machine that panders to the politically connected!

    • Tommy Cranston

      Again don’t blame Skeffington, Mattiello, Paiva-Weed, Fox or anybody else but the MAJORITY of your family and friends who have continuously elected this party every election since 1934. We have told them that no matter how much they abuse us we will come back for more. We deserve everything we get. Everything.

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