For those of us who follow economic development in Connecticut, it seems odd to see the Rock Cats saga unfolding without Gov. Dannel P. Malloy.
The governor's apparatus kicks into gear every time a bakery considers expanding in Bozrah, and he's been especially active in the capital city, where he hopes to live and work for another four years.
Malloy has good reasons to remain silent. He's already under criticism from Republican challengers Tom Foley and John McKinney for what they call overreaching in state aid for private companies and projects. He's right and they're wrong in most of the examples, but the point is, he needs New Britain on Election Day and has nothing to gain by helping Hartford wrest the Double A baseball team from its happy home of two decades.
And for Hartford Mayor Pedro Segarra, this is basically an economic bar mitzvah, where he steps up and finally becomes his own man. No way did he want Malloy anywhere near the pulpit of those city hall steps on June 4, when he unfurled the scroll of his very own, $60 million plan.
Well, don't believe what you don't see.
Sooner or later, the state simply must step in. And under Malloy, it will — perhaps quietly at first, and perhaps never as the main force, but the numerous tentacles of state development will not be quelled by the move of the Metro Hartford Rock Cats. So Segarra might think he's acting on his own but, in reality, he's forcing Malloy's hand. Here's why:
•The city is broke and needs state help. Hartford can bring the stadium plan's annual cost down from the widely reported $4.3 million a year of borrowing costs in various ways — including parking revenue (up to $500,000 a year); shared naming rights (easily $225,000 a year, maybe more); and, mostly, from the property taxes generated by the newly hot Downtown North district. But at least in the early years, the cost is likely to reach at least a couple of million dollars.
•This is a regional play, not a city ballpark. Most of the fans will come from outside of Hartford, just as today, when the vast majority of Rock Cats fans come from beyond New Britain. And the long-term economic benefits will accrue to the region, not the city, if the stadium plan achieves its only real goal of bringing vibrancy to the core city.
•The state, not the city, would see the immediate financial gains. The stadium would spin off an immediate benefit of $1.7 million a year in sales and use taxes, according to the city's consultant, Brailsford & Dunlavey — all of it heading to state coffers (tickets, luxury boxes and concessions, $600,000; hotel taxes, $500,000; taxes from new activity outside the stadium, $600,000). Likewise, the state would see any income taxes from higher personal or business earnings. At the very least, the city will bargain with the state for some of that bounty in exchange for paying for the stadium.
•The state is involved, anyway, by default. A little more than half of the city's $552 million annual operating budget comes from the state, and through the Malloy-controlled Capital Region Development Authority, the state calls the shots on virtually all of the highest-profile capital projects, including the XL Center and the convention center.
•Beyond parking fees and naming rights, non-state sources of stadium-related revenue will prove elusive for Segarra. The Rock Cats will rightly object to a special ticket tax and, anyway, that would probably need state approval. The team might also object if the city tries to line up its own corporate support, as officials have suggested might happen. Finally, the so-called "private investor" deals could be tied to the city-owned property around the stadium, but not the stadium itself — because there's no cash flow that they could capture.
The Hartford move makes all the sense in the world. Having the team in a parking lot next to New Britain High School, nowhere near anything, makes for a lovely and convenient night out for families but doesn't help the region very much at all. If we want Hartford to grow into the standing of low-second-tier cities — places like Milwaukee; Sacramento, Calif.; and Columbus, Ohio — then we need this stadium plan.
Much has been said about the 660 jobs that the stadium plan would create, directly and indirectly. We all know that despite rosy studies, stadiums often don't spur an economy as promised. But first of all, in a metro area with 600,000 jobs, the added positions are far less important than the possibility of attracting people to the city. And second, because the stadium is planned for a redevelopment zone, the figure of 660 jobs is not far-fetched.
So, in short, Segarra might be coming into his own in this Rock Cats deal with the Solomon family, but Hartford is basically a ward of the state.
Yes, the city has enough borrowing power to make this happen on its own, but it's like a teenager with a part-time job declaring that she's going to spend "her own money" on a car. She'll plunk down her last dollar on those wheels — and mom and dad will have to give her that much more spending money for college.
And what happens when the insurance bill comes due?
Read The Haar Report at http://www.courant.com/haar.Copyright © 2015, CT Now