Worcester Business Journal

wbjournal.com | February 4, 2019 | Worcester Business Journal 21 Overwhelming development in a small town Stadium deal about more than numbers V I E W P O I N T E D I T O R I A LS L et's face it, a small town of 13,000 is going to be hard pressed to handle a request to build a $100-million, 1-million-square- foot marijuana cultivation facility. e impact created by Valley Green Grow's proposal had to be the among the largest tax bonan- zas Charlton officials had ever stared down. While hindsight is always 20-20, it seems clear now the town should have been more deliberate in all of its processes when handling this behemoth proposal. Larger cities have the planning resources to handle most inquiries, and can add resources when a large, sophisticated project is going through the system, but the state should offer resources to smaller towns turn when faced with a situation like this. Valley Green Grow's proposal was initially approved by Charlton, which stood to gain more than $2 million annually in development fees and property taxes. However, when the inevitable NIM- BY resistance kicked in, the town reversed course and the Planning Board denied the site plan. Valley Green Grow now has two lawsuits pending against Charlton – one over the site plan denial and a sec- ond related to the Town Meeting proposal to ban all recreational marijuana companies. Despite saying it has a list of other communities where the $100-mil- lion facility could be sited, Valley Green Grow is digging in for what appears to be a drag-it-out legal fight, which could end in nothing being built. Volunteers who make up planning boards and boards of selectmen can oen lack experience or the know how to run the process in a seamless manner. A little informality or sloppiness related to public meeting process when everyone in town, plus some expensive lawyers, are paying attention can mean any mistake is high stakes. If formalities like meeting W hile I'm a Worcester booster and a fan of all Sox, Red, Woo and Paw, I'm also a fan of fiscal pru- dency, and the hard numbers reinforce experts' pessimism about Polar Park. However, the deal's success – or failure – transcends numbers. City leaders say Canal District stadi- um project will generate sufficient tax and rental revenue to cover taxpayers' cost and create an additional $3 mil- lion annually for the city. Worcester would own Polar Park, but the team will keep advertising, concession and naming rights revenue. Worcester anticipates revenue from property taxes (but not on the stadium itself ), local option sales taxes, hotel room taxes, parking, advertising, team rent, and up to 125 events per year at the park. Looking solely at the numbers, this ain't a good deal. Depending on how we define economic benefit, it may turn out to be a bad deal. Shortly aer the deal was announced, WBJ shared the financing details with sports management professors to evaluate city leaders' claims that the stadium development would pay for itself. Nine of the 10 economists who re- viewed the numbers doubted the claim. e sole dissenting opinion came from Smith College Economics Professor Andrew Zimbalist, a consultant Worcester paid to help seal the deal. Zimbalist's economic model showing the deal to be "better than financially neu- tral for the city under reasonable assumptions." City leaders seized upon Zimbalist's lukewarm endorse- ment to hype the project as transformative, but when the hype and crowds inevitably subside, we may discover the future home of the Pawtucket Red Sox is built on a shaky financial foundation. Ironically, Zimbalist's endorsement contradicts conclusions from his 2011 book "Sports, Jobs and Taxes: e Economic Impact of Sports Teams & Stadi- ums". He and co-author Roger Noll found: 1) Sports teams and facilities are not a source of local economic growth and employment; 2) e magnitude of the net subsidy exceeds the financial benefit of a new stadium to a team; 3) e most plausible reasons cities (like Worcester) subsidize sports teams are the intense popularity of sports among a substantial proportion of voters and businesses. It might not make sense from a profit-and-loss perspec- tive, but equating a city's or region's prominence or value with winning teams produces benefits beyond dollars and cents. Successful sports teams generate palpable civic pride, which Worcester could use more of. e redevelopment project may generate net funds to support additional city services in education, infrastruc- ture and security. ere'll be plenty of parking for residents and visitors to go to Polar Park and root, root, root for the WooSox. Kelley Square will be navigable. Let's hope the project brings Worcester positive publicity, more profits and at least a couple victory parades. Bruce Mendelsohn is the CEO of marketing firm e Hired Pen. Reach him at bruce.mendelsohn90@gmail.com. BY BRUCE MENDELSOHN Special to the Worcester Business Journal Bruce Mendelsohn The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. notices get posted a day late, usually it isn't a big deal. Yet, when a big dispute arises, these informalities create major problems, such as the case in Charlton. When Valley Green Grow initially came to Charlton with its proposal, town officials should have worked more diligently to understand everything the project entailed, both the upside and potential down- sides. Instead, the proposal was batted about, turned inside out, and le hanging out to dry as residential opposition became more organized and determined, and its various boards felt the pressure. Charlton experienced a whole lot of hand-wringing over the impact of Tree House Brewing's move into Charlton, which may have been an indicator another very large project wasn't going to make it through the system. In Lancaster, which has some 7,200 residents, a monster 40B affordable housing development was proposed around the holidays in 2017 when the town was asleep at the switch. In a town used to periodic small 40B proposals of a few units here and a few units there, Goodrich Brook Estates sailed through the early stages of its approvals with few noting its plans contained more than 550 units – an urban monster proposed for a completely rural setting. Now a well-organized citizens group is pushing to reduce it to a reasonable scale, but it's an uphill fight. Big projects in small towns shouldn't just be le to an administrator and volunteer boards with too few resources to handle them. In situations like this, the state should have programs in place to provide advice and aid on the best approaches. An agency like the Executive Office of Housing & Economic Develop- ment could allocate resources to consult with towns on the best path forward. at way, small communi- ties can better assess and negotiate with these parties, and more effectively bring economic progress. W W WO R D F R O M T H E W E B Tweets of the week "We're excited to be right around the corner from starting construction work on our redevelopment of the #Worcester County Courthouse!" - Trinity Financial (@Trinity_RE), Jan. 25, on a WBJ story about the Boston developer beginning its $53-million courthouse redevelopment in March "Time flies! It's hard to believe that it's been 6 months since the BlueHive Group was formed!" - BlueHiveGroup (@bluehivegroup), Jan 25, on a WBJ story about BlueHiveGroup creating a parent company after its mergers with Paris Marketing and Continental Woodcraft last year Facebook feedback "I love that building. Very sad but I know many people who would want their business there. Times change." - Kimberly Olsen Rickman, Jan. 26, on a WBJ story about Harvard Pilgrim Health Care closing its down- town Worcester office "North Quabbin please. It's a cannabis desert out here." - Karen Powers, Jan. 24, on a WBJ story about Leicester marijuana company Cultivate planning to expand and open more locations

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