It’s Not A Hangover Until You’ve Stopped The Drinking

“We have to get over the 38 STUDIOS HANGOVER.” (ProJo 10.21.15/Caps theirs.) So said House Speaker Nicholas Mattiello at a speech to the Rhode Island Public Expenditure Council’s annual meeting Monday night adding, “A company from outside Rhode Island is not going to locate here if they pick up the newspaper every day and see stories about how bad we are.” Then stop being bad!

Evidence that our current state leadership has acquired any wisdom from the 38 Studio debacle has been impossible to detect given their response to this year’s PawSox Stadium scheme. What evidence would an out-of-state company have that our state government can be trusted to make intelligent, informed decisions?

Now that the documents from the 38 Studio lawsuit have been made public, we get to peak behind the curtain at the decision-making process of the geniuses who were running the show back then. (A huge “thank you” to all the reporters who sorted through and analyzed this massive document dump!) It certainly allows us to compare how, as Mattiello put it, “mistakes were made” in the 38 Studio debacle and how those compare to Mattiello’s own handling of the attempted raid on the public coffers by the PawSox owners. (And we still have to be vigilant. This battle is not over.)

Educated and experienced experts were completely ignored. Director of Administration Rosemary Booth Gallogly, with 35 years of experience, raised many red flags with then-Governor Carcieri concerning the viability of the 38 Studios plan and the level of risk involved (Fitzpatrick, ProJo, 10.21.15). Carcieri never even shared her memo with the EDC board.

So, did Mattiello consult and listen to the experts concerning taxpayer-funded stadiums? He could not have heard what sports economist Victor Matheson has to say on this topic, or even his own consultant (paid for by the taxpayers) Andrew Zimbalist who once told Freakonomics author Stephen Dubner, “… if the public or its political representatives are trying to make the case that a team or a facility by itself will be an important development tool, then the electorate should think twice before opening its collective wallet.”

Zimbalist in his own book “May the Best Team Win” stated, “There are very few fields of economic research that produce unanimous agreement. Yet every independent economic analysis on the impact of stadiums has found no predictable positive effect on output or employment. Some studies have concluded that there is a possible negative impact.”

Forbes Magazine and the Wall Street Journal have both come out against these boondoggles. These sources were easy enough for stadium opponents to find — does Mr. Mattiello know how to Google? Is he stubborn or ineducable? How does the Speaker make decisions when spending millions of taxpayer dollars?

And still, as recently as September when the riverfront site was taken off the table, Mattiello had this to say, “I thought that would have been a very successful location. A stadium there would have brought the community together and would have acted as a catalyst for further economic development in Providence.” Except . . . it exactly would not! Nobody believes this anymore. Even your own expert.

All our eggs in one basket. EDC board member, and experienced businessman, Karl Wadensten was the lone board member fighting the 38 Studios plan, voicing concerns “about the total monies being dedicated towards the project.” (RI Future 9.28.15). More than one businessperson and taxpayer has wondered where we might be today if $1 million had been loaned out to 75 small businesses.

And yet Mattiello unthinkingly embraced the original, enormous, PawSox proposal unquestioningly, only backing down in the face of public outrage. Either the man is a gullible fool or he stood to benefit somehow . . . or he had already started picturing himself strutting about his stadium, treating his sons’ Little League team to hot dogs, doling out tickets at the next high school reunion.

Lack of transparency. The PawSox owners expected the people of Rhode Island to give them the land, the stadium, and millions of dollars, but refused to open up their own books. What private equity firm would ever enter into such an agreement. The lack of transparency in the 38 Studios deal stems from a different circumstance — sheer incompetence. Not one person in the state leadership or on the EDC board had any business being in the gaming industry. (Gallogly expressed concerns, but was brushed aside for not telling Carcieri what he wanted to hear.) From RI Future, “Carcieri and Schilling were both clueless about everything from basic game programming to distribution models.” Schilling had no experience. (Interesting piece by Andrew Stewart in RI Future. He writes of Warren Buffet’s rule concerning the advantages of understanding what the hell you are doing.)

So pity poor Mattiello, he can’t believe we’re still talking about this! It’s spoiling all his fun. I want a stadium. I wanna be a big shot! At the meeting on Monday the Speaker spoke to the gathering about the need to move forward,”It was five years ago already!”

No it was not five years ago. It’s today in fact. It’s still in our budget! We still pay every minute for the arrogance, incompetence, and greed of the people responsible for the 38 Studios fiasco, and it was made abundantly clear during this past year that neither House leadership nor the Governor has learned one single thing from it.

 

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