As legislative hearings explore whether Rhode Islanders should help fund a new $83 million stadium for the Pawtucket Red Sox, questions about the risk for taxpayers have become a central focus.
While opponents point to the state’s poor history of public-private partnerships, highlighted by the 38 Studios bankruptcy, team owners and supporters insist this deal is different.
“We’re not trying to bring a high-risk, new venture here,” said Larry Lucchino, PawSox chairman and co-owner. “We’re simply trying to maintain and make stable a highly desirable … contributing member of the Rhode Island community.”
So, how risky is this deal for taxpayers across the state?
The state is directly responsible for $23 million. The team will pay $45 million, equaling $12 million in cash and $33 million in bonds. Pawtucket taxpayers will be responsible for the remaining $15 million.
Unlike public-private deals of the past, the deal is safeguarded by a 30-year contract with the PawSox, which team owners estimate will annually generate at least $3 million for the state and about $261,800 for the city – and potentially much more – beginning in 2020.
The team has also proven for decades it can generate revenue, and the $1.9 million it generated for the state last year would cover annual debt financing for the new stadium in Pawtucket.
But revenue projections are tied at least partly to attendance, which has been in decline. McCoy Stadium’s annual paid attendance fell 40.4 percent to 409,960 in 2017, compared with 688,421 in 2005. How that decline impacted revenue is unclear, as city officials could not immediately provide corresponding revenue fluctuation during that time period.
Lucchino, however, expects attendance to rebound at a new ballpark. Team analysts estimate paid attendance will total 587,000 in the inaugural year, 2020, followed by 569,000 in following years.
“There’s [evidence] of increasing attendance at newer, more appealing ballparks that we’ve seen in other Double-A and Triple-A ballparks,” Lucchino said.
Even if attendance doesn’t rebound, however, PawSox owners and city officials are banking on ancillary development, including a hotel, 200 apartment units and 50,000 square feet of retail space, which could result in additional annual revenue totaling $1.8 million for the state and $1.5 million for the city.
“It will be an economic catalyst for the downtown and the waterfront in Pawtucket,” Lucchino said.
But swaying public opinion on the financing could be difficult. Rhode Islanders remain suspicious about putting public money toward private ventures.
“There is simply too much distrust of government right now for the public to accept what will be perceived as a backroom deal,” said CEO Mike Stenhouse of the Rhode Island Center for Freedom and Prosperity, a free-market group in Providence calling for a statewide referendum on the financing.
