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Red Sox Making Deals — for Property Around Fenway Park

Wed December 28, 2005 - Northeast Edition
CEG



BOSTON (AP) The Red Sox have been busy making deals it say will help the team for years to come.

“We just want to protect our investment,” said Janet Marie Smith, the team’s senior vice president of planning and development.

Sound baseball judgment. But she’s not talking about signing free agents. She’s referring to the team’s latest real estate acquisitions.

The Red Sox, having decided it’s staying long-term in Fenway Park, are gobbling up properties around the aging ballpark.

Not only do the acquisitions give the team’s owners a chance to expand the smallest ballpark in Major League Baseball, but it ensures the Sox are players in reshaping the neighborhood around the park.

Some see Fenway as the next hot neighborhood.

“Back Bay is full. The South End is overpriced,” said Bill Richardson, president of the Fenway Civic Association, mentioning just a couple of trendy Boston neighborhoods. “It’s only natural Fenway would be the next area.”

Observers wonder how far the team will go. Besides buying nearby buildings that can be used for office space, the Red Sox are joining forces with developers who are building a hotel and condominiums.

“It’s not a radical change in mission,” Smith said. “As we have begun investing in Fenway Park, we’ve grown interested in assuring the neighborhood will continue to be an accommodating place.”

In recent months it completed purchases of a taxi garage, a radio station headquarters, a McDonald’s restaurant, and a nightclub.

One goal is to move offices out of cramped Fenway Park to allow for construction of additional seating. By next year, capacity will be approximately 40,000, up 10 percent since the current owners bought the team in 2002.

It also successfully fought a proposal that would have placed two 40-story residential towers over the Massachusetts Turnpike between the famed Citgo sign and the fabled Green Monster — not exactly the backdrop it would like for Fenway Park and its fans.

“In many ways we got dragged into the real estate business,” Smith said. “We’re not inherently interested in real estate except to protect and preserve Fenway Park.”

The proposed condo towers “would have completely destroyed the views that are so much a part of the Fenway postcard.”

Now, it’s working with the developer on a scaled-down version of the project, though the team doesn’t expect to have a financial interest in it.

John E. Rosenthal said he and the Red Sox will work on building 130 residential units around two proposed parking garages on the site originally planned for his two towers. Instead, he’ll move his proposed towers — and downsize them to 17 and 20 stories — a few blocks to the west, out of Fenway’s view.

“They’re making all the right moves,” said Rosenthal, president of Meredith Management Corp. “They’re buying real estate they can afford and that’s available and trying to cooperate with developers like me who they can’t outright control, but who they can cooperate with. They’re just doing what makes sense, and what any smart business would do.”

Principal Owner John Henry led a group that paid $660 million for the team, its ballpark and its TV network in 2002. The team estimated it is spending more than $100 million in renovations to the 94-year-old ballpark.

The Fenway neighborhood’s emergence is partly due to the team’s decision to stay put, rather than seek to build a new stadium as the prior owners did.

“The Red Sox decision to stay has jump-started a lot of redevelopment in the area, and broke the logjam for my development,” Rosenthal said.

The team’s lobbying efforts on Beacon Hill appear to be paying off. The state Senate has voted to spend $55 million to improve transit and infrastructure in the Fenway neighborhood, which includes the Longwood Medical area, where more than 80,000 people work.

Andrew Zimbalist, a Smith College economist who specializes in professional sports issues, said the Red Sox “ultimately decided there’s money to be made.” Buying property gives them more leverage to seek publicly funded infrastructure improvements, he said.

Smith won’t comment on how much the Red Sox have spent so far. The team has structured the deals so that prices are not listed in public documents at the Suffolk County Registry of Deeds, keeping prospective sellers in the dark about how much the team is willing to spend.

The combined assessed value of the recently purchased taxi garage, radio station building, McDonald’s, and nightclub is approximately $5.8 million, according to the city of Boston Assessing Department. Market value, however, typically is much higher than the assessed value in Boston, and the team had to outbid the auto repair shop to buy the Town Taxi on Ipswich Street.

Smith said the team is not trying to build a real estate empire. The combined size of the recent purchases is 80,000 sq. ft.

“This isn’t like Harvard buying up Boston,” she said. “We don’t have a budget, but our tolerance is low, and so are our limits. We aren’t looking to do more than we’ve already done.”