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.

Red Sox drop bullpen redo to save state tax credits

The Boston Red Sox had previously announced plans to expand their bullpens and move in the right-field wall as part of ongoing renovations to Fenway Park, but that piece was abruptly put on hold today, after the Massachusetts Historical Commission ruled that it would jeopardize state historic represervation tax credits that the Sox are receiving for the project.

The article in the Boston Herald isn’t especially clear, but here’s what I’ve been able to figure out from looking at the regs and a conversation with a preservation expert:

  • Starting in around 2006, the Red Sox have been applying for state tax credits from a pool designated for historic preservation projects. (Eligible projects can have up to 20% of their costs paid for by the state.) They’ve received $11.1 million so far, and are seeking an additional $28.4 million.
  • To get historic preservation credits, needless to say, you need to be doing historic preservation. The state commission ruled that moving the fences in from their historic distances so that relief pitchers could have more elbow room wouldn’t qualify as “preservation” — and so would jeopardize the entire $39.5 million that the Sox are looking to get.
  • Sox execs, needless to say, dropped the bullpen plan like a hot rock.

What’s still not clear is whether, once the Sox have all their tax credits in hand (presumably within the next year, since this is the last round of announced renovations), they can then go about doing whatever they want to to the bullpens, regardless of what the state thinks. The state regs say that “The taxpayer must retain the property for five years beginning on the date on which the project has been completed, or else the credit is subject to recapture,” but they don’t say whether “retain” means retain ownership, or retain the property in its historically preserved state.

A Sox spokesperson told the Herald that the bullpen redo “is still on our radar screen” but “there is no immediate timetable for this project.” So if I’m reading between the lines properly, it sounds like they don’t know how it works, either, but they’re darn sure going to find out.

Fenway power struggle: Catfight or condo conflict?

The Boston Herald is reporting that Fenway renovations director Janet Marie Smith’s departure from Boston wasn’t as voluntary as official sources had claimed:

“Janet Marie was told to go because [John Henry’s new wife] Linda [Pizzuti is] taking over the whole damn place,” said one person familiar with Smith’s exit. Another source said, “Janet was thrown under the bus and everything is a mess as a result of the young bride. The Chinese symbol for conflict is two women under one roof.”

Minus the gratuitous misogyny, I’d heard something similar through the grapevine. So if three unnamed sources count as confirmation, consider it confirmed.

As for what this will mean for Fenway, probably not much — as Smith noted, most of the planned renovations were complete before her July ouster. It does seem, though, that Pizzuti, a 30-year-old who formerly worked for her family’s development firm, is likely to push the Sox to build condo towers on land the team owns around Fenway — so while the Green Monster won’t be changing, the view of what’s beyond it might be.

Janet Marie Smith leaves Fenway almost done

Boston Red Sox ballpark renovations director Janet Marie Smith has “left the team,” according to the Boston Globe, which says “much of work” on renovating Fenway Park had been completed. Smith, who did not comment for the article, was reported by Sox president Larry Lucchino to now be working on renovations to the Rose Bowl “among other projects.”

There’s some weirdness here — while most of the new amenities were indeed complete, some, such as renovations to the grandstand down the first-base line, were not, so it’s an odd time for Smith to leave. It’s certainly possible that the Sox ownership simply decided that in a still-weakened consumer economy, they’d reached a point of diminishing returns on what they’d get in return for spending millions on further renovations.

In any case, Smith, who before her Fenway gig was best known for overseeing the building of Camden Yards and setting off the modern retro stadium craze (and, some said, taking more credit for it than she deserved), has accomplished what some said was impossible: taking a cramped, undermaintained ballpark and making room for modern amenities without tarnishing the building’s history or charm. The Ricketts family could do worse than to give her a call.

Latest Yankee Stadium feature: Riots!

As if the New York Yankees‘ new stadium weren’t taking enough lumps, team employees yesterday managed to tell hundreds of fans that last night’s Yanks-Red Sox game was rained out — then refused to let them back in once they learned otherwise. One fan was arrested and charged with assaulting an officer (a traditional New York charge that usually means “being assaulted by an officer”), while Yankees officials threatened to revoke the press credentials of a Daily News photographer who was taking pictures of the melee.

New Stadium Insider, meanwhile, suggests this trick: “The Yankees don’t officially allow re-entry, but if you go to Gate 6 via the Great Hall, you can wait in line to enter the Hard Rock Cafe, which is open to the public. Since it is open to the public, the Yankees have to stamp your ticket on the way in, allowing you re-entry to the stadium once you are done with your meal.” If this really works, it would be the first known actual use for the Hard Rock Cafe.

With Boston in town, it was also the Boston media’s turn to take a crack at reviewing Yankee Stadium 2.0, and Boston Herald sportswriter Steve Buckley responded with a long column revealing that:

  • Bill Madden hates the new place, but Keith Olbermann loves it.
  • Buckley thinks the renovated Fenway Park is “a perfumed-up dump.”
  • “It really is amazing how much it looks like the old Yankee Stadium, only bigger. The field dimensions and outfield fences are similar, and the seats are Yankee blue. The upper deck is adorned with the same style of frieze that was a signature feature in the pre-renovated original Yankee Stadium, and the Jumbotron in center field shows strikingly clear pictures.” (This last is presumably an upgrade to the original 1923 Jumbotron.)
  • Continues Buckley: “While the place has been ridiculed as an ill-timed, out-of-place monument to American excess, let‚Äôs not forget that the Yankees are the greatest franchise in American sports history. This new stadium is a monument to that success.” So that would make it an ill-timed, appropriate monument to American excess?

Sports bubble watch

Sale prices of Boston Red Sox opening day tickets on the secondary market — that’s “legal ticket scalpers” to you and me — are down almost 50% from last year, yet another sign that the economy is having a major effect on demand for high-priced sports tickets. The New York Mets have also announced they’re auctioning off unsold seats for their opening game at Citi Field, though given you’re not allowed to bid less than the face value that was the reason the tickets went unsold in the first place, it’ll be interesting to see how many bids the auction draws.

(Thanks to The Sports Economist for the links.)