It’s now been more than seven years since the Pawtucket Red Sox owners cut a deal to get $105 million in public cash to move to a new stadium in Worcester, sparking a throwdown between economists Andrew Zimbalist (a paid team consultant), who said it w0uld all work out great, and Victor Matheson and a whole bunch of others (not collecting any consulting checks), who warned that building a stadium in order to spark economic gains from new housing next door was a bad gamble. As of last year, city tax revenues were falling short because the promised new development was lagging — so how are things going now?
A report from the city auditor to the City Council states that the Polar Park Ballpark District Improvement Financing fund has an anticipated deficit of $390,000 for the current fiscal year, and that by the end of the year will owe the city’s general fund over $2 million.
Not great, especially after the Worcester city auditor promised specifically that this would never happen! Also not great: Though Worcester Chief Financial Officer Timothy J. McGourthy said he expected the tax fund would eventually have enough revenue to cover the city’s stadium costs (including $40 million in overruns), that’s just regular taxes that any development would pay — meaning if the ballpark-adjacent housing ends up cannibalizing construction that would have taken place anyway, it’s not really a net gain. That’s something that Matheson, who teaches at College of the Holy Cross in Worcester, warned about seven years ago, along with the fact that planning on a housing windfall didn’t take into account the added city costs of supporting new residents: The price tag for providing schools for even a few dozen new kids would quickly eat up any new tax revenues. In that case, even if the ballpark district fund eventually shows a profit — CFO McGourthy swears it will, someday — it will be canceled out by new losses in the city schools budget.
The Worcester city council was all set to discuss the WooSox ballpark situation at its Tuesday meeting this week, but scrapped the agenda item at the last second. Residents still turned out to testify on the subject, though, including Nicole Apostola, who had previously petitioned the council to at the very least provide more transparency about what Worcester taxpayers would be on the hook for. Apostola made clear that she would still like some questions answered, namely:
“One, why has no one been held responsible for the horrible contracts this city has been saddled with? Two, why has there never been a reckoning for the misconstruction of the doors at the park that prevent certain events from being held there? Three, why has the city not been able to take advantage of any of the revenue-generating days we were supposed to have? And most importantly, number four, exactly which services are being cut so we can subsidize multimillionaires?”
Oh, yes, the doors, we should probably talk about the doors. Three years ago, after Worcester’s new stadium had been open for two years, people started noticing that the promised flood of concerts had turned out to be, actually zero concerts. It turned out that the reason was Worcester had copied Fenway Park’s feature where the only direct access to the field is a large roll-up door in center field — and that door was built 12 feet high, whereas concert production trucks are 13 feet high. If only there could have been some way of knowing!
So LOLWorcester, sure. But this also should serve as a warning to other cities where sports projects are promising to pay back their costs with tax revenue from new surrounding development (cough San Antonio cough) that, first, there’s no guarantee the new housing will get built on time, and second, taxes on new development aren’t a free windfall, they’re needed to pay off the new costs that come with new development. After all the cautionary tales so far (cough Brooklyn Nets cough), you’d think people would have caught on by now, but yeah, nope, editorial boards are still writing how special sports district taxing zones would “shield residents from bearing the cost of development.” Shout louder, not-on-team-payroll economists, it’s hard for newsmakers to hear you with their fingers wedged so deeply in their ears.
I suspect neither the overhead door height nor the “property taxes as profits” errors were blunders/stupidity/oversights.
They were planned.
If you are the primary tenant of this stadium, the last thing you want is other events (that you do not control the revenue streams for) competing with you in your own stadium (even if you didn’t pay for it). If nothing else it is competition for entertainment dollars in your district.
So, instead of a (custom) 14′ or 16′ door, you buy a standard 10′ or 12′ unit. Hey! We saved you taxpayers construction costs there! No questions, please.
Vis the property and other tax streams: If you ask anyone in the financial side of local or state government what property taxes are for and how they are calculated, you should (actually must… but…) get the answer “they are the prorated cost of providing government services to the property/facility in question”.
Ergo, property taxes are/should be a zero sum game: If your taxes go up it means the cost of providing services has gone up. If your taxes go down, it means the cost of providing government services has gone down (at least incrementally/proportionally). In practice there are almost always annual small surpluses or deficits (no-one can calculate what every invoice will add up to 12 months or more out), but over the long haul taxes are supposed to cover gov’t services costs and no more.
As Mr. Matheson pointed out, this does not make temporary or one time increases windfall profits like “increased car sales” at a dealership might. An increase in property taxes means that the net value of all buildings in a given area has likely increased, and that there is a corresponding increase in the cost to provide those structures and facilities with composite government services.
Literally everyone involved in government – even the often stunned elected representatives – knows this. So when they choose to represent the truth as otherwise, they are not misinformed – they are deliberately misleading the public.
Yeah, the door isn’t the issue. All that means is a more time consuming load in/load out. Not really a deal breaker. I’m guessing a 9,000 seat outdoor facility isn’t that attractive to promoters when the city has a 14,000 seat indoor facility one mile away.
Also it’s more like a 6,000-seat outdoor facility, since a lot of the “seats” are on the outfield berm, behind where the stage would be.
As for the door being an intentional move by the WooSox owners, I’m always inclined to go with Hanlon’s Razor, just because I’ve seen even more stupid for stupid’s sake than stupid in the pursuit of profit. But both happen lots, obviously, so it could be either (or both).
Yeah, this is exactly right. No decent band that can attract 5K fans is going to want to play outdoors at a MiLB stadium with little experience in handling music events when the indoor DCU is a 15 minute walk away. And if you want outdoors, Indian Ranch with a 3K capacity is a dedicated music venue 20 minutes away. And the Palladium outdoors does several concerts a summer in downtown Worcester with an 8K capacity.
Our study of MLB ballparks shows that they typically host fewer than 3 concerts per year. Hardly the thing that is going to balance the budget even if the planning were correct.
The door thing happened because no one cared. This was a vanity project for Larry Lucchino, who wanted taxpayers to build him a mini-Fenway. Find some local sycophants, counter the local economic experts by hiring Zimbalist, and you’ve got yourself ballpark. No one was ever seriously thinking about concerts, which weren’t likely to happen anyway, so the doors weren’t considered.
I do not doubt it was a vanity project that happened just because Mr. Lucchino could make it happen.
Mr. Lucchino did not do the basic engineering for the facility, however.
An engineering firm was hired, along with architects and various other team members (contractors of all kinds). At some point, a (probably junior) engineer was tasked with designing both the access door and what is behind it (in the way of structural elements etc).
Somewhere along the way, that engineer was told that a 12′ door was sufficient and designed both the doorway and the structures behind it accordingly.
Engineers seldom make these kinds of decisions on their own. They tend to rapidly become unemployed engineers if they do – doubly so if they work for a contract engineering firm as in this case.
I agree that concerts weren’t likely to be a major concern. The acoustics of baseball stadia generally don’t lend themselves well to audio performances, though there are always exceptions. Having crowds on the field of play (common in stadium concerts) is also a bigger issue on baseball fields than some others.