Boston Finance Committee calls for halt to Yawkey Way deal, calls it “financially irresponsible”

Turns out I’m not the only one critical of the deal that the city of Boston cut to give the Red Sox perpetual rights to Yawkey Way in exchange for $7.34 million in payments over the next ten years: The advisory Boston Finance Commission has called on Mayor Thomas Menino to delay a vote on the plan, saying it will “shackle generations of Bostonians to an agreement that over time will prove to be financially irresponsible” and that the city should be negotiating to get a chunk of future revenues from concessions on the site.

The Boston Globe article on this revealed that the Boston Redevelopment Authority at least had some rationale behind its numbers: Since retail space in the neighborhood goes for $60 a square foot, and the Sox would only use Yawkey Way about one-third of the days in a year, the BRA settled on a price of $20 per square foot per year. And since annual rents are usually about 7 percent of land value, and Yawkey Way is 17,000 square feet, that came to a purchase price of just under $4.9 million. Add in air rights over Lansdowne Street (where the Green Monster seats were built) for another $2.5 million, and the total price tag came to $7.4 million.

This leaves out a couple of important factors: First off, Boston isn’t actually getting $7.4 million in present value — it’s getting $7.4 million over the next ten years, which is worth somewhat less than that. Additionally, one could argue that Yawkey Way should be valued at more than surrounding retail properties because it’s a unique location — it’s not like if the Red Sox didn’t like the price being charged they could just go and rent 17,000 feet of local storefronts 81 days a year in which to hold a giant open-air concessions concourse. (Though I suppose the opposite argument is true to some degree as well: If they weren’t renting to the Red Sox, the city wouldn’t have many other bidders to use the street — though it does have value as, you know, a public street, plus it’d be interesting to see what, say, a coalition of independent sausage truck vendors might have bid for the site.

Anyway, Mayor Menino has signaled that he’s going to ignore the Finance Commission and let the Yawkey Way easement proceed. But it’s a reminder that, even if the deal is better than the original one — which was crazy low because, according to the Globe, a real estate consulting firm based the Sox’ rent on “lease rates for pushcarts in shopping malls” — there’s still reason to believe that Boston may well be leaving money on the table in order to keep the Sox happy.

Red Sox replace old sweetheart deal on Yawkey Way with new sweetheart deal

The Boston Red Sox have cut a new deal to lease Yawkey Way — the street outside Fenway Park that they use as an open-air concessions concourse — from the city of Boston on game days. Under the new plan, instead of paying a yearly rent, the Sox will pay $734,000 a year over the next ten years to buy a limited easement on the street, after which it will own the rights and pay nothing.

That’s better for the city than the $186,000 a year that the Sox have been paying, albeit not all that much better, since after the year 2023 they’ll be able to use the street for nothing, forever. And considering that the team brings in an estimated $5 million a year in additional revenues from using the street, $7 million and change over a decade is still a relative pittance.

So, crappy negotiating by Boston Redevelopment Authority director Peter Meade, who’d initially indicated that he’d seek a cut of Red Sox revenues from Yawkey Way, but instead decided to go for the “predictable revenue stream.” There’s some logic in that, but in either case the question is why Meade agreed to give up use of a public street for about 10% of its value to the team — especially when the Red Sox’ only option if Meade demanded more would be to lump it.

Red Sox president Larry Lucchino seemed to have that in mind with his statement: “If you’re looking for a short answer to ‘What’s in this for the city?,’ one answer is the preservation of Fenway Park.” So, if Boston had demanded a more equitable lease, the Red Sox were going to what, walk away from their hundreds of millions of dollars in renovations to Fenway and move out of town in a hissy fit over whether to cut the city in on sausage profits? Explain that again, Larry?

“It’s unlikely that if we were not able to make the kind of improvements that these two projects represent that we would have found a viable way to stay there,” Lucchino said.

So, double negative, past tense subjunctive, and we get … I think something involving Lucchino threatening to go back in time and kill his own grandfather. Phew — sure am glad we avoided that!

Red Sox owner buys Boston Globe, civilization ends

Boston Red Sox owner John Henry has agreed to buy the Boston Globe for $70 million, prompting a complete freakout by Globe sportswriters who are now worried about how to write about their new boss:

“This was the last circumstance anyone would want,” [sports columnist Bob] Ryan said Saturday of Henry’s purchase of The Globe and other media properties from The New York Times Company for $70 million. “It’s nothing anyone would wish. It’s scary, to say the least, for all involved.”

While it’s certainly worrisome to have a newspaper and the sports team that it covers share ownership, it’s hardly unprecedented: Not only did the Chicago Tribune own the Cubs for years, but the Times itself owned a share of the Red Sox for years while it owned the Globe. (Former Globe sportswriter Gordon Edes says, “I think this is different. This isn’t the newspaper owning the team. This is the team owning the newspaper.” Which doesn’t really seem all that different to me in terms of conflict of interest, but okay.*) And in any case, it doesn’t take shared ownership for a newspaper publisher throw his weight around on behalf of the local team, as we’ve seen both recently and not so recently.

If nothing else, it’s going to be interesting to see whether every baseball story in the Globe from here on out has to refer to “the Boston Red Sox (owner of this newspaper).” And, of course, whether it’ll still run occasional articles like this.

*UPDATE: Dean Starkman at CJR argues that “sad to say, the conflict of a baseball club owning a newspaper is even more acute than a newspaper owning a ball club. In the latter case, the newspaper was the more valuable asset and its very value at least provided an incentive not to take too many risks with the paper’s reputation. The incentives are reversed when the ball club is many times more valuable than the paper.” Maybe, though the fact that so many sports leagues have tried to turn their websites into semi-independent journalism outlets is at least somewhat heartening — it appears that the fear of independent competition is the main factor keeping owners from turning their papers into total shills for their corporate interests, and there are still some non-Red-Sox owned news outlets in Boston. More every day, in fact!

Did I forget to mention MLB teams shake down cities for spring training money? Oh, do they ever

Nice piece last night by Deadspin wunderkind Jack Dickey on the never-ending shakedown of Florida and Arizona cities for baseball spring training facilities. Key section:

About the Nationals’ current home: It’s Space Coast Stadium in Viera, Fla., which was built in 1994 to keep the Marlins’ spring games in-state. It remained the Marlins’ home until Jeffrey Loria swapped the Expos for the Marlins in 2002, when Loria decided he’d keep Montreal’s newer spring digs at Jupiter’s Roger Dean Stadium, which opened in 1998. Loria happily forced the older stadium on Montreal’s new owners, MLB. Love that guy. In any event, the Nationals’ home isn’t yet 20 years old. But they’re still itching for a new one. For spring freaking training.

So why is it that Lee County won’t give in to the Nats? Have they finally gotten some sense about the economic ineffectiveness of publicly subsidized stadiums? Are they going to invest in infrastructure? Or schools?

Lee County, however, can’t afford anything close to that amount after taking on about $234 million in baseball-related debt over the past several years—borrowing $143 million to build a new stadium for the Red Sox and agreeing to take on another $91 million loan for improvements the Minnesota Twins want.

Oh, great.

This is nothing new, of course — though I don’t write about it here that often because I’m kept busy enough with major-league stadium news, spring-training subsidies have been a thriving business for years, if only because there’s effectively an unlimited number of Florida and Arizona towns who are able to host spring training, so the hosting merry-go-round is an endless bidding war. But it’s nice to see it all in one place. And by “nice” I mean of course teeth-gnashingly enraging.

Fenway Park and Tiger Stadium celebrate birthdays, one from beyond the grave

One hundred years ago today, two ballparks opened that would survive to be among the longest-lived in baseball history. One of them today gets wall-to-wall coverage, though the Boston Globe will only let you read it if you pay them. (Here’s a sampling of another paper’s commemoration of the anniversary, with a nice nod to the “stadium diehards” who helped convince the Red Sox to retain Fenway Park instead of demolishing it.)

The other stadium is remembered today by a photo gallery of what you’ll never see again. No mention of Detroit’s own stadium diehards who kept Tiger Stadium alive for a decade past when ownership wanted it gone, but then, history belongs to the victors.

As a personal note: The two are among my absolutely favorite ballparks that I’ve visited, for very different reasons: Fenway has its bizarre dimensions, the fascination of the Green Monster, and its unique (even for when I was growing up in the 1970s) single-decked structure, though its roof deck has slowly grown to make it more of a 1.5-decked building in recent years. Tiger, meanwhile, had a history even longer than Fenway’s (the site known simply as The Corner had been home to pro baseball since the 19th century), the famous overhang in right field that allowed fans to catch home run balls that otherwise would have landed in outfielders’ gloves, and most of all, an upper deck that was so close to the action that spending one inning there put the lie to claims that “intimacy” is solely the province of new stadiums with high-priced seats right next to the batter’s box.

Here’s what I wrote in 2009 as a judge considered a last-ditch effort to save part of Tiger Stadium from the wrecking ball. The effort failed, and the city of Detroit went ahead and completed demolition (though a band of baseball diehards still cuts the grass and plays pickup games on the old field, against city orders to leave it overgrown and unused). But I’d say the same today: Though Fenway Park (and Wrigley Field) remain historic baseball treasures, something of the baseball experience was lost with Tiger Stadium that will never be regained.

Sun-Times to Rahm: We know you want to pay for Wrigley reno, really we do

The Chicago Sun-Times just isn’t going to let go of these anonymously-sourced Wrigley Field renovation rumors. Yesterday, Chicago Mayor Rahm “Three-Fingers” Emanuel had this to say on the subject of a Cubs ballpark redo and who’d pay for it:

“Wrigley Field is a great field. The Ricketts [family] purchased it. They have a responsibility that comes with it. We may make changes so they can enhance it. But we’re not gonna do that without consciously knowing who I sit there representing — and that is the taxpayers. … The package that comes together will come together when it’s ready to come together. But I’m there to be a steward for the taxpayers not one for the Ricketts family — and I know the difference.”

And the Sun-Times turned that into this headline:

Emanuel opens door to helping Cubs get more ad, sponsorship money

Yuh-huh. The paper then goes on to cite some of the rumored changes that it had previously reported (more ad signs behind the bleachers, street closings for fairs on game days) and some it hadn’t (“‘gateway’ archways that welcome people to ‘Wrigleyville: Home of the Cubs’ from various directions”), none of it attributed to any source.

The growing talking of a “Fenway plan” for Wrigley, meanwhile, has Chicago Tribune columnist Phil Rosenthal reminding readers that since Boston handed over Yawkey Way to the Red Sox to use as a sort of outdoor concessions concourse, team owners have pocketed $45 million from the deal, while the city of Boston has collected less than $2 million in rent. So as much as we often laud the Fenway renovation deal as a well-designed plan using mostly private money, it’s important to remember the “mostly.”

Ex-Red Sox PR flack: Henry sought public cash for Fenway reno

Buried in a long, somewhat self-aggrandizing article by former Boston Red Sox PR agent Doug Bailey in this month’s Boston Magazine is this historical tidbit about the current ownership group’s much-lauded renovations of Fenway Park:

In 2000 — before the Henry/Werner group bought the team — the state legislature had approved spending more than $300 million on improvements around the park as part of the then-owner’s plan to build a new stadium. That plan fizzled, and with it the public funding, but now Henry, Werner, and Lucchino wanted to either revive the state’s financial incentives package or quietly win a new round of funding. The finesse with which this had to be accomplished could not be overstated. There were some around the table at these meetings who argued vociferously to simply tie the Fenway Park commitment to public funds. In other words: “We’ll only stay and renovate Fenway if we receive taxpayer assistance for infrastructure improvements.” [Larry] Lucchino overruled them. The Red Sox would make the commitment to Fenway Park regardless of the infrastructure issue. Gradually, a media plan emerged: The team would guarantee that baseball would be played in Fenway on its 100th anniversary in 2012; highlight all of the money the new owners had already spent — and were going to spend — on improving the park; and extend an offer to help the state with infrastructure improvements. Implicit in that offer, of course, was that the state would kick in money, too.

The whole thing was going to be laid out at a press conference at Fenway on March 23, less than a month before the start of the 2005 season. It was a solid plan and might have gone off without a hitch, but it was nearly sunk when an overeager associate decided to give an exclusive advance to Globe columnist Joan Vennochi in a wrong-headed attempt to win some positive press. Joan is a friend of mine and a true baseball fan, but she is a fierce opponent of public financing for professional sports teams. In fact, she’d been one of Kraft’s most dogged critics during his quest for taxpayer money to build a stadium in Boston. When the paper hit the door that morning, you didn’t even need to read the column to know what it said. The headline told it all: “No Public Money for Red Sox.” It would take months to recover from that blunder, which seriously set back the club’s plans for taxpayer support. In the end, the team got less than $100 million.

(Here’s the link to Vennochi’s article, though it’s subcriber-only.)

How seriously to take this story is hard to tell: The Red Sox owners’ announcement of staying put at Fenway came off the next day without a hitch, after all, and it’s not like Vennochi had had much success derailing earlier plans for public funding for a Red Sox stadium. (Bailey also gets the amount of the originally approved state subsidy wrong: It was $100 million, not $300 million; an additional $212 million in city funds was proposed but never approved.) Still, this is at least some indication that John Henry and Co. were planning to ask for more public subsidies for a Fenway renovation if they could get it — which, given Henry’s actions as owner of the Florida Marlins, really shouldn’t come as any surprise. To his (and Lucchino’s) credit, he backed off once it proved politically impossible, and went ahead with the renovations anyway — though given that he was able to, it’s worth wondering why the state of Massachusetts should have been chipping in to pay for it in the first place.

A tale of two landmarks, one of which isn’t a landmark

The Boston Red Sox this week formally requested that Fenway Park be listed on the National Register of Historic Places, in order to get $40 million in federal tax credits on the just-completed renovations to the soon-to-be-100-year-old stadium. (This is different from the $40 million in state tax credits the Sox are getting for the same work.)

Skipping right over the whole tax credit issue, the New York Times cheap irony desk immediately noted that Boston is not Chicago:

Over in Wrigleyville, the Cubs say they are hamstrung by a City Council decision to give landmark designation to parts of 97-year-old Wrigley — including the marquee, ivy, scoreboard, and bleachers. Not only does the local distinction not come with federal tax dollars, but the Cubs say the landmark status is a factor in their failure to follow the Fenway rebuilding model.

“If you’re going to restore and maintain the facility, you’re going to have to take parts of it down and rebuild it,” the Cubs’ president of business operations, Crane Kenney, said in 2008. “Landmarking authorization doesn’t let you do that.”

Of course, the national register isn’t actually landmark status (which Fenway doesn’t have), and Chicago landmarks law doesn’t actually prevent renovations so long as “historic” architectural features are retained, but why ruin a good story? Though it does take away a bit from the contrast between the two teams when the Times reveals that “the Cubs have discussed a listing in the National Register, but will not pursue it until after Wrigley has been renovated” … in other words, just like the Red Sox did.

As for the $80 million the Red Sox will reap in tax credits — actually more like $50 million, given that more revenues for the team also means bigger revenue-sharing checks to the rest of MLB — that’s undeniably public money, but not actually a special subsidy, since it’s a tax credit that anyone can avail themselves of if they’re rehabbing a landmarked building. Whether you think historic preservation credits are a good idea in the first place likely depends on your feelings about whether you think maintaining historic buildings is a public good — I’d say yes, though a cumulative 40% tax credit seems a bit richer than necessary — but that’s a larger issue to take up with the U.S. Congress and Massachusetts legislature.

Meanwhile, back in Chicago, Cubs owner Tom Ricketts spent $20 million this week to buy a McDonald’s across the street from Wrigley. That would fit well with a Fenway-style redo of Wrigley — the Sox bought several buildings adjacent to Fenway for office and kitchen operations, though those weren’t across the street from the stadium as the McDonald’s building is from Wrigley. Still, it looks like Ricketts intends on spending some more time trying to squeeze some stadium cash out of the city of Chicago before he commits to anything like that.

Red Sox earning $5m a year windfall on city handover of Fenway streets

The Boston Globe ran a long article yesterday by some Northeastern University journalism students (sadly, now behind the Globe’s subscription paywall) that investigated a fascinating topic: How much has being granted control over the streets around Fenway Park on game days been worth to the Red Sox. Their answer: oodles.

Over the last nine years, the Boston Red Sox have increased their revenue by an estimated $45 million through the use of two streets that city officials handed over for a relative pittance: an average of $186,000 a year in lease fees.

Every home game, the Red Sox close off Yawkey Way, where thousands of fans congregate and, over time, spend millions at concessions before heading into the park.

Around the corner, the team has turned the air rights over Lansdowne Street into 269 expensive seats and 100 standing-room spots atop the Green Monster.

The leasing agreement, whose details have never been publicly reported, has been a bonanza for the Red Sox, because the city set the lease fees without taking into account how much money the team could make from use of the properties.

If the city had demanded a portion of the revenues, as is common in commercial ventures, the team would have paid the city millions more over the first nine years of the 11-year lease, according to industry estimates and an examination of city records.

For the math-phobic, $45 million over nine years amounts to $5 million a year in new revenues for the team from expanding out into the surrounding streets — which were declared “blighted” in 2002 by the Boston Redevelopment Authority and turned over to the Sox — for which the city is only collecting $186,000 a year in rent. The good news: According to the Globe report, the Sox’ ten-year lease on the streets expires in 2013, and BRA director Peter Meade is currently seeking to renegotiate the deal to get the city a cut of the added revenues.

Still, it’s yet another sign of the hidden subsidies that Judith Grant Long has noted add an average 40 percent to the public price tag of stadium projects. Something for Rahm Emanuel to keep in mind the next time Chicago Cubs owner Tom Ricketts asks if he can set up a game-day shopping mall on Sheffield Avenue.

Lucchino says Fenway to last another 40-50 years

In discussing the completion of the Boston Red Sox‘ 10-year renovation plan for Fenway Park with reporters yesterday, team president Larry Lucchino promised that the nation’s oldest major-league ballpark would be around for the long haul, or at least the medium haul:

Team president Larry Lucchino said the major projects are done. Engineers have told the ownership group that the structure has 40-50 years of life remaining.

In other words, if you’re waiting for a new ballpark you’re going to be waiting for a long time. “There is nothing in the plans,” Lucchino said.”

I’m not clear on what it means to say that “the structure has 40-50 years” to go — Fenway is all brick and steel, which if maintained should last pretty much forever. (Or can be replaced, as the Red Sox did with some steel beams during the current renovation.) But anyway, none of the current Red Sox management are going to be alive 50 years from now, so take this as a promise that Fenway will remain unscathed on their watch.

Meanwhile, 2012 is the ballpark’s 100th anniversary, which if I’m counting right will make it the first stadium in baseball history to reach the century mark. Not bad for a building that was declared “economically obsolete” just 12 years ago.