Corporation Dollars Meet Taxpayer Dimes

by Erin West

Illustration by Tristan Rodman

published October 2, 2015

A man with a PawSox baseball cap held a poster board with a bold Sharpie message: “STOP THE STADIUM MADNESS.” His neighbor, still in her work clothes, lifted another sign: “Together we did it! Thank you.” The 20-some protesters who had gathered on the Rhode Island State House steps lowered their signs while all eyes turned towards the man at the microphone. He took a second survey of those in front of him and announced, “We’ve now beaten the machine.” 


Batter up

On September 19th, the “No new stadium for Providence” Facebook group declared victory to their Internet followers and supporters. Earlier that day, Rhode Island House Speaker Nicholas Mattiello had announced that the deal to build a new Pawtucket Red Sox stadium on Providence’s riverfront was dead. This was a sudden end to months of fierce debate following a proposal in February to re-locate the PawSox from McCoy Stadium, their home in Pawtucket for over 45 years, to some of the vacant I-195 land parcels. The proposed location was a roughly five-acre empty plot on the west bank of the Providence River near the Point Street Bridge. Some of the land is state-owned, some, the property of Brown University. Of the ten investment partners who bought out the team in 2015, two in particular spearheaded the project: Boston Red Sox president Larry Luccino and a well-known Providence lawyer, Jim Skeffington, who had experience working on major Providence development projects.

Luccino and Skeffington had dreams of a luxurious, centrally-located stadium that would attract more visitors and expand the PawSox team franchise. The new structure would have three stories, cost $85 million, and be attached to a 750-car parking garage. The team owners argued that the city would gain an estimated $2 million per year from sources like sales to visitors and hotel taxes. They also claimed the new stadium would provide jobs and catalyze the opening of new businesses. Soon after the proposal was made, Rhode Island legislators joined Skeffington in praising the economic opportunity that a new stadium would bring. “The prospect of moving the team to Providence represents a significant and exciting development opportunity for our capital city,” said Providence Mayor Jorge Elorza in February. House Speaker Nicholas Mattiello and Brown University also released supportive statements at the time.

Meanwhile, many Pawtucket locals were angry about the possible loss of a much-loved tradition (their mayor called the prospect “heart-breaking and gut wrenching”). Providence residents and other Rhode Islanders joined in their frustration once more details about the stadium’s finances were uncovered. 

WPRI calculated that the cost to taxpayers of financing the new stadium would be approximately $4 million per year (compare to the $2 million in earnings the team owners estimated Providence would receive annually). The $4 million comes from what they expected the city to pay in order to lease the stadium land. In addition, the new PawSox ownership had no qualms about asking local and state government to incentivize the deal. The owners said they would expect subsidies and tax stabilization to help cover the cost of the stadium’s construction. Furthermore, they proposed paying only one dollar per year in rent for the I-195 parcel of land. Rhode Island citizens would be deprived of lost tax and rent revenue that could have gone to fund other government programs. This all while the team investors would reap revenue from ticket sales, merchandise, and naming rights. 


Foul play

This debate between sports teams ownership and city residents is not unique to Providence. By threatening to relocate beloved teams to new cities, team owners often bully local and state governments into cutting them tax breaks, as well as directly funding the construction of new stadiums. This was certainly true for the PawSox. The new stadium deal was often phrased as the only way to keep Rhode Island’s most well known sports team in the state. While $4 million a year to taxpayers may seem outrageous, in 2006, Oklahoma City fronted over $100 million to renovate an arena that allowed for the inauguration of the NBA team Oklahoma City Thunder (formally the Seattle Supersonics). Only three of the 31 NFL stadiums have been built without public funds. 

The argument presented to most governments is that new stadiums have the potential to create opportunity for economic development, revenue, and jobs. However, economists almost resoundingly agree with Providence’s “No new stadium” protesters—these sports venues rarely bring the benefit they promise. A 2008 Econ Journal Watch study concluded, “we find near unanimity in the conclusion that stadiums, arenas, and sports franchises have no consistent, positive impact on jobs, income, and tax revenues.” These stadium scams have reached such visibility recently that even comedic news commentator John Oliver dedicated his whole “Stadiums” episode to them this July.

Although not specific to Rhode Island, this model for a proposed stadium resonates with the history of the state’s politics. In 2010, Rhode Island granted $75 million in bonds to a computer and video game company, 38 Studios, that promised to bring jobs and revenue to the state. This instance was unique because Rhode Island did not simply give standard tax breaks, but rather took a gamble and actually acted as a direct investor in the company. This completely failed. Little more than two years later, the company declared bankruptcy, and the state lost millions. It is worth noting that, in perfect irony, the founder of this company was Curt Schilling—the well-known Red Sox pitcher.

A short time spent digging into this debacle will reveal back-room deals and questionable motives. The 38 Studios deal follows in a long line of corruption and dubious leadership in Rhode Island politics. Unsurprisingly, today, “the Rhode Island voter does not trust Rhode Island State leadership for any kind of decision that involves taxpayer money,” David Norton, an organizer in opposition to the new PawSox stadium, told the Independent. Mistrust of Rhode Island leadership seemed to fuel much of the stadium opposition. A few other signs on the Capitol steps that day included, “RI Taxpayers, are you paying attention? Or just paying? Wake up!” and, “Mattiello, who do you work for?”

During the Internet organizing efforts to challenge the stadium deal, a #38Stadium hashtag surfaced. Clearly, citizens see a trend of what key organizer, Sam Bell, calls “corporate welfare.” Bell told the Independent, “I’ve heard RI leaders say, what’s wrong with it? This is the way we’ve always done things. We’ve always given public money to these private developers who have come and asked for it.” But this time, Rhode Islanders like Norton, Bell, and another activist, Tim Empkie, refused to yield. “People finally stood up and said no…this is not going to be business as usual,” said Empkie.


The crowd goes wild

The weekend following the announcement of the new stadium construction, Tim Empkie, a member of Brown University’s medical school faculty, happened to be online and started following the intense, negative public reaction to the news. He joined in on commenting and sharing his opinions through social media. Soon after, Empkie went out, bought a poster board, and stood near his home on the corner of Hope and Doyle Streets with a sign that simply said, “No Stadium on the I-195 parcel.” A few days later, he waited outside a building on Dyer Street, next to the proposed parcel of land, to catch attendees of a meeting about the stadium. When Jim Skeffington exited the building, Empkie introduced himself and said, “Hi, I’m Tim Empkie, and I’m here to defeat you.” 

Skeffington replied, “You can try.”

At that same time, Empkie was in contact with Bell, who had already begun gathering a team to collect signatures for a petition opposing the stadium. Empkie fondly described this group as a “loose coalition of dedicated and enthusiastic individuals.” This original team consisted of six people, and included a graduate student, an attorney, and a real estate agent. A majority was from East Providence and met through local connections. While their ages ranged from 20s to 70s, they all had something in common: a strong commitment to battling a corporate giant.

On a Thursday afternoon, on June 25, this team gathered at the Capital building and chanted, “No stadium on parcel 4, no public money, no subsidies.” Throughout the summer, the group started an active social media campaign called “No New Stadium in Providence” and printed hundreds of bumper stickers that similarly read “No New Stadium.” They soon joined forces with Pawtucket resident, David Norton, who was at the same time launching an Internet campaign called “Keep the PawSox in Pawtucket.” Norton emphasized the role that the Internet played in connecting him with thousands of RI citizens. His online campaign gathered over 13,000 electronic and physical signatures for a general petition against moving the PawSox—which he later presented to the state legislature. “No New Stadium in Providence” followed with a Providence-specific petition. A particularly salient part of Norton’s digital efforts was posting legislators’ names online in lists that declared them for or against the stadium deal. He said he received several calls from legislators themselves in response. The results of Norton’s online efforts are encouraging when considering what technology can do to hold governments accountable. Similarly, Empkie credited technology in his organizing: “this began with isolated people just being outraged, who, through the Internet, through email, through social media, linked up.” 


Out of the park

On May 18, Jim Skeffington, then president of the PawSox, passed away. The loss of Skeffington’s powerful leadership and knowledge was an unexpected blow to the team owners still advocating for the stadium’s move. Indeed, the deal was broken a few months later when Brown University sent a letter to the PawSox owners stating that it would ask $15 million for the necessary land. This high price tag is what led Matiello to pronounce the plan dead two weeks later­: “different entities put artificially high costs on a deal, which proved to be insurmountable.”

It is difficult to determine what factored into Brown’s decision. However, it seems as though finances were not the only driving force in Brown’s price quote. In the University’s open letter, Executive Vice President, Russell Carey, said, “The decision of whether to build a stadium on the I-195 land belongs to the City, State, and, most of all, to the residents of Rhode Island.” Is it possible the University seriously considered public opinion? 

On the day that the dead deal was announced, the Providence Journal quoted team owner Larry Luccino as saying, “We were told it was not going to be a suitable site and there were too many obstacles that remained, and we…heard loud and clear what we were being told.” Were big money and legislators actually able to hear loud and clear what the people had to say? Just a few days after the deal was announced dead, House Speaker Matiello said, “I still think the original proposal was a good business model.” (He later claimed he did not word this statement correctly). Although legislators dropped the stadium deal, it seems as though some have not completely bought in to the protesters’ concerns. In addition, while it is impressive that a team of professionals from East Providence was able to organize around this specific issue, it is unclear whether Rhode Island government is as responsive to all citizen demands. Activism surrounding housing rights, for instance, has been strong for years now, yet nearly 600 properties are still vacant in Providence while 4,000 Rhode Islanders experienced homelessness in 2014.

Does the organizing stop here? Sharon Steele, an integral part of the “No New Stadium” team, stood on the Capitol steps and cautioned the victory rally crowd: “Let us not rest on this victory.” The land on which developers proposed building the new stadium has been slated for a public park for decades. So far, no major design has been put on the table by Providence government. Steele told the Independent that she is confident, however, that the opposition to the stadium pushed the desire for the park to the forefront. For Steel and many of the citizens who gathered outside the Capitol, this victory is just the beginning of a larger battle in Rhode Island politics: a battle for transparent and responsible government decisions that actually benefit those ultimately financing these projects, the citizens. Who will be represented in this battle, and how well they will be received remains to be seen.

At the very least, Tim Empkie hopes that after what happened to the stadium, “people will feel inspired to say no to politics as usual in RI.”


ERIN WEST B’18 is warming up.