Poli-ticks

Lies and more lies

By Arlene Violet
Posted 10/3/17

Are you as fed up as I am with the steady diet of fabrications coming out of the state house? Bloviating has become second nature. Here are just a couple of examples. PawSox stadium The owners (and, …

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Poli-ticks

Lies and more lies

Posted

Are you as fed up as I am with the steady diet of fabrications coming out of the state house? Bloviating has become second nature. Here are just a couple of examples.

PawSox stadium

The owners (and, sadly, some reporters) and legislators at the hearings keep telling the public that the PawSox owners are putting $45 million into the deal. Wrong! The billionaires are only putting in $1 million each. The remaining $33 million, which they claim is their contribution, is debt not equity. Revenue from attendance and so-called “naming rights”, which were supposed to be their lease payments, are instead supposed to pay off this third issuance of bonds. If not, you are on the hook. In total, taxpayers are at risk of having to pay $71 million of bonds plus interest and costs.

If there was a prayer that AAA baseball would be so popular that it would grow, as opposed to losing attendees, that naming rights would bring in revenue year after year for 30 years, etc., then the owners would be giving personal guarantees. They aren’t putting their personal money at risk — only yours. Any legislator who votes for this deal without at least demanding personal guarantees from owners should be run out of town.

It is also a fig leaf argument to state that the overall AAA league association would come to the rescue. Putting aside the fact that they have many legal ways to escape responsibility, nothing says that the association will still be in existence since its fortune is predicated on all teams being successful and participatory. A dozen sports teams that were in the league have gone bust, including the Los Angeles Dodgers.

Nobody in the state is qualified to vet this transaction, including the legislators, the governor or the people at the Commerce Corp. As you will see below, the Commerce Corp and the governor overstated job growth with the $40 million subsidized Wexford project.

Job numbers at Wexford

Grinning from ear to ear, our state politicians and the Commerce Corp head shoveled more than dirt at the groundbreaking ceremony on September 25. A GoLocal Prov investigation found that the job creation numbers for permanent jobs that led to the $40 million in tax breaks for the project were inflated by the Raimondo administration. The governor had repeatedly stated that 1000 new jobs would be permanently created in Rhode Island. After fact-checking her and the Commerce Corp claims, GoLocal Prov says the actual new jobs are less than 10 percent of projections. Counting tricks like saying 100 new jobs will be created by Brown University’s tenancy will actually be 15 jobs since 85 current employees will just move to the site.

If something as simple as job creation numbers are off by 90 percent, how much more difficult is it to vet the PawSox transaction, when the financial analysis would be trying for the most sophisticated CPA firm.

No lender on earth would loan money to this PawSox project. Yet, your leaders are poised to commit you to subsidizing $71 million and counting. While moaning about whether to continue your car tax break next year, or where the money is going to come from for the $2 billion projected to fix crumbling schools, they lack the guts to ask for personal guarantees. They ‘re scared of billionaires, not you.

Arlene Violet is an attorney and former Rhode Island Attorney General.

Arlene Violet

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A lifelong Portsmouth resident, Jim graduated from Portsmouth High School in 1982 and earned a journalism degree from the University of Rhode Island in 1986. He's worked two different stints at East Bay Newspapers, for a total of 18 years with the company so far. When not running all over town bringing you the news from Portsmouth, Jim listens to lots and lots and lots of music, watches obscure silent films from the '20s and usually has three books going at once. He also loves to cook crazy New Orleans dishes for his wife of 25 years, Michelle, and their two sons, Jake and Max.