Worcester Business Journal

wbjournal.com | December 10, 2018 | Worcester Business Journal 23 No room for error Dual-tax rate hurts Worcester V I E W P O I N T E D I T O R I A L W orcester can support five sports fran- chises. ey just have to be smart about it. With the Pawtucket Red Sox moving their home in 2021 to a new $101-million stadium in Worcester's Canal District, the four other sports franchises calling the city home will have to adapt the a new 800-pound gorilla on the scene, particular the city's other baseball team, the Worcester Bravehearts. e arrival of the Triple A Worcester Red Sox should help to grow the size and reach of the Worcester sports market. e other organizations – Worcester Railers men's hockey team, Massa- chusetts Pirates arena football team and Worcester Blades women's hockey team as well as the Brave- hearts all draw ticket sales from a fairly tight radius around the city. e new Red Sox franchise should be able to attract fans from a much wider radius, which means the new kid in town won't canni- balize the very same fanbase supporting the other teams. Plus, the hockey teams have the advantage of playing their games in baseball's off season. e Worcester Red Sox are projecting in the range of 7,000 fans per game and have already lined up $3.1 million in corporate sponsorship revenue. e other sports teams operate on smaller budgets and don't need that kind of support to make ends meet. e Bravehearts have been a real success story since their inception in 2014. ey are one of the most popular collegiate future base- ball teams in the country, averaging about 2,300 fans per game. e Blades will play their games in the Fidelity Bank Worcester Ice Center in the Canal District, so the overhead at the much smaller facility means averaging 500 fans per game would be a win for them. e Railers get more than 4,000, so there is obviously an appetite for hockey in the city. Running a small sports franchise is no dif- ferent than running a small business. You need to market the product effectively, keep an eagle eye on E very fall, the Worcester City Council debates the city's tax rates, and the last three years have increasingly pushed the burden onto commercial and industrial property owners. e Worcester Regional Chamber of Commerce continues to argue reducing the gap between com- mercial and industrial tax rates and residential tax rates will lead to a better tax system in the city. Moreover, it will continue to grow the commercial/in- dustrial workforce and tax base. Since 1984, the city council has shied a portion of the residential tax burden over to the business property tax payers. By doing so, it puts Worces- ter at a competitive disadvantage to its surrounding communities. Worcester is one the few Massa- chusetts communities using a dual-tax rate system. e Town of Auburn joined other surrounding commu- nities in their dedication to narrowing the tax rate on Nov. 13. Auburn followed suit from Fitchburg, a Gateway City like Worcester, which on Oct. 25 continued its push toward a single-tax rate. Webster, on Nov. 19, voted unanimously and eliminated the dual-tax rate and went to a single-tax rate. is leaves Worcester as the only local community who, instead of narrowing the tax gap, has increased it the past three years. As we continue to see surrounding towns and cities help their businesses grow by moving to have both the businesses and residents shoulder the tax burden equally, Worcester has unfairly voted to increase the burden on busi- nesses since 2015. is is bad economic development policy in a time when the city is seeing a resurgence of companies interested in making Worcester their future business home. is inequitable tax policy puts Worcester businesses at a disadvantage especially when Auburn, Webster and Fitch- burg all just voted to narrow their tax rate gap. In particular, it adversely impacts the manufacturing sector and com- panies with lots of inventory. It is important to remember these businesses pay twice, once on their commercial prop- erty and then again on their personal property (equipment and machinery). With the new regulations coming from the state's Grand Bargain signed over the summer, businesses are bracing for the minimum wage increase from $11 to $15 per hour over the next few years. Residents have argued they need a dis- counted tax rate to live in the city. Ironically this discounted rate for residential taxpayers has caused an erosion the commercial/industrial tax base, shiing part of the tax levy back onto the homeowners. Undoubtedly, a combination of both the wage increase and a failure to narrow the tax gap will ultimately result in businesses who don't have a need for a Worcester address moving to neighboring towns. Last year's vote to narrow of the dual-tax gap was defeated 6-4. e six councillors who voted against narrowing the gap were Moe Bergman, Khrystian King, Konnie Lukes, Candy Mero-Carlson, Gary Rosen and George Russell. Let them know they should change their minds. Alex Guardiola is the director of government affairs and public policy for the Worcester Regional Chamber of Commerce. BY ALEX GUARDIOLA Special to the Worcester Business Journal Alex Guardiola The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. WO R D F R O M T H E W E B spending, attract sponsors and set the right ticket pricing so a healthy number of fans will attend their games. Getting that mix right for a team on a tight budget is no small feat. Small sports operations have a hard time getting established and making ends meet over the long run, and Worcester has not been an easy place to make it. e city has seen minor league hockey teams come through here before – first the Worces- ter IceCats in the mid-90s, and later the renamed Worcester Sharks. ey started with attendance in the 6,000 fans per game range, but their numbers eventually dipped to below 4,000 by the time the Sharks le in 2015. e Railers appear to be doing things a little differently. ey've been able to drum up what appears to be a more sustainable excitement for minor league hockey by engaging the community at a higher level than their predecessors did. at engagement starts at the top, as owner Cliff Rucker has set the tone and is active in the city, with its nonprofit community, as an investor and develop- er, and through the depth of the team's community engagement. e Bravehearts' success has likewise been driven by owner and city native John Cree- don and his team who have been producing great summer entertainment at family-friendly prices. e Worcester Red Sox would do well to heed this same lesson. While they will start with a spanking new stadium and a tremendous level of excitement, the 10-person ownership group would be wise to select someone with equity in the organization who's going to roll up their sleeves and dig into the Greater Worcester community for the long run. Minor league sports can provide solid entertain- ment at a fair price. But can Central Massachusetts generate a sufficient fan and sponsorship base for five teams? We are rooting for them, but all five will have to be careful in how they navigate the waters and set themselves up for success. Tweets of the week "The saying in Worcester is 'Act locally, eat globally!' 71% of restaurants and food service is run by a foreign-born resident. Amazing stat! And thanks to tips from the @WBJournal story, now I have some new restaurants to check out!" - Patrick Lowe (@PatrickLowe9), Nov. 26, on WBJ's story about immigrant businesses in Worcester Facebook feedback "In that case... we should impose more tariffs." - George R Ey, Dec. 4, on a WBJ story about the the global trade war and tariffs not having an impact on the MetroWest business community "As if Framingham needs worse traffic headaches." - Michael Scully, Nov. 30, on a WBJ story about Leicester cannabis retailer Cultivate hoping to open another location in Framingham W W

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