STATE REPRESENTATIVE
PAUL C. CASEY

A View from the Hill

FOR IMMEDIATE RELEASE: June 7, 1999
CONTACT: Tom Nolan (617) 722-2240

SCORE ONE FOR THE TAXPAYERS

When the clock expired on the New England Patriots' season last winter, it seemed as if time had run out on their association with Massachusetts and the town of Foxborough. The levelheaded, fiscally conservative style of play by the Massachusetts House of Representatives had fallen into the shadow of the high-risk, incentive laden offensive attack of the Connecticut legislature. As the fourth quarter of the negotiation game ticked down, the Nutmeg State drew up an unprecedented gadget play in an attempt to lure the National Football franchise from its home of 30 plus years. The deal that state ultimately handed off to the Patriot's owner, Robert Kraft, included a $375 million, taxpayer funded colossal stadium as well as guaranteed payment on luxury box sales, and revenues from concessions and parking.

Fortunately, as we often see on the field, the court or the rink where the team touting flash and pizzazz does not always win, cooler heads prevailed. In the end, the courageous stance taken by the House of Representatives succeeded in keeping the Pats in Massachusetts - without compromising the public interests. The bill that was ultimately agreed to by the Senate and signed into law by the Governor vindicated every substantive principal of the House involving the use of public funds and stadium costs. The results we achieved on the Hill some three weeks ago with the assistance of the NFL and several business and civic leaders should be heralded not only for keeping the Patriots where they belong, but also for setting the standards that should guide us in any stadium deal. As the Red Sox begin to unveil their own plans for the future, we must adhere to the same principals that favor spending tax dollars on education, infrastructure and social services rather than throwing cash at multi-million, even billion, dollar private sports entities.

What the recent stadium legislation illustrates most is that states need not jeopardize their fiscal integrity in order to cater to professional sports teams. Many host communities such as Cleveland, Oakland, St. Louis and Baltimore have channeled millions upon millions of dollars into new stadiums, with the anticipation of receiving exorbitant returns. As is often the case, however, it is the already wealthy owners who profit the most, while the citizens continue to pay the price. Unfortunately, more and more smaller cities throw caution to the wind, in seeking to lure professional sports teams to their localities hoping to build credibility and attract visitors. Very often, the beneficiaries are not the cities or the taxpayers, but the wealthy owners.

Over the past year, and even before that, we heard similar arguments made in Massachusetts regarding the Patriots, and are beginning to hear the same with the Sox. The primary issue that divided the House and Senate last fall involved differences of opinion on the appropriateness of using public funds to purchase or refurbish a private stadium that would ultimately benefit the owner of that organization. In short, the House agreed to allocate significant funding for infrastructure improvements, but remained firm in its stance against using public funds to purchase the stadium land. That stance eventually prevailed last week. The legislation we recently enacted, in conjunction with the recognition by NFL leaders of the importance of the New England media market, proves that communities do not have to sacrifice their taxpayers' interests in order to stay in the market of professional sports.

Incorporated within the stadium plan are several House principals designed to protect the interests of all our taxpayers and avoid the establishment of dangerous precedents and inappropriate private sector subsidies. In short, the Act authorizes the state to issue bonds in the amount of $70 million to be used exclusively for infrastructure improvements in and around Route 1 in Foxborough and Walpole, including the construction of pedestrian bridges, underpasses and walkways and additional sewer, road and utility services. No state funds will be used for the construction or refurbishment of the stadium. There is no land purchase, lease buy-back mechanism and there will be no monies paid to the franchise.

Moreover, revenue streams are established and assessed against the private sector beneficiaries of the infrastructure expenditures in order to support one-half of the state's debt services costs. The Commonwealth will receive combined annual revenues from these sources in the amount of $1.4 million, ($1 million directly from the franchise and $400,000 from private, off-site parking). These amounts are exclusive of business and tax revenues that are generated from the Patriots, as well as the creation of jobs during the renovation phases. Currently, the Patriots generate approximately $5.5 million in sales and income taxes for the state each year, and that figure is expected to rise significantly with the rise in players' salaries. With the potential of producing well over $150 million over the life of the bonds, the expected revenues will far exceed the $70 million investment.

Behind every good offense is a good defense. This oft-quoted axiom was not forgotten during the drafting of the stadium legislation. In fact, some of the most attractive safety valves contained in the bill are the "clawback" provisions that will keep the Patriots on the hook for payments if they decide to pull a Cleveland Browns maneuver and skip town shortly after the improvements are completed. The playbook requires that before any bonds may issue, the Patriots must agree to hold and maintain the stadium for the purpose of housing the professional football team. In the unfortunate event the team decides to leave, the organization or its owner will be obligated to pay the Commonwealth back for the debt incurred by the infrastructure bonds. While the ultimate goal is to keep the franchise in Massachusetts, we have made sure to protect our taxpayers from being sacked for a loss.

Since the passage of the bill, the NFL followed through on its end by extending Mr. Kraft a loan of $141 million to cover half the costs of the stadium refurbishment. The loan was the product of a financing policy formulated by the league in March to assist those teams particularly in large television markets, and benefits not just the Patriots, but every team in the league. This is how it should be. The billion dollar leagues must be held responsible for keeping their leagues successful, which in some sense, means helping teams help the league. This job is not and should not be the responsibility of taxpayers who often do not reap the economic benefits of professional franchises, but who do reap the benefit of having quality education, health care and other public services in their communities.

The attraction of hosting a professional sports team has led many a city down the path of huge public financial obligations. Residents may secure a team to root for, but the price is often devastating in the long run. In one study, it was estimated that by the year 2000, communities in the United States will have committed more than $12 billion for the construction of new sports stadiums and arenas, with taxpayers owing about $7 billion. More often than not, unfortunately, it is these same hopeful supporters who end up losing in the long run.

I applaud Speaker Finneran and my colleagues in the House for holding firm in their resolve in the face of intense public pressure. In the end, both the public and private teams have won. The Patriots received the assistance they needed from the NFL, Foxborough and other surrounding towns will receive funding for necessary infrastructure improvements to ensure the feasibility of housing the larger complex and the taxpayers of Massachusetts will be able to cheer for their hometown team, knowing that real, day to day needs will not be jeopardized. It is these principles that must guide us in other such private sector endeavors. We must not sway from the standards set during the stadium ordeal, particularly as we begin to take the field in negotiations with the Red Sox organization.