I spoke with Nurse several times last week about how the Rays deal fell apart (temporarily), and he echoes many of the same sentiments this week. An excerpt:
Ironically, the issue that caused the most heartburn for the council is, as a result of the significant rebirth of downtown, the value of the 85-acre Tropicana Field site. The use agreement originally assumed that a hotel would be built next to the Trop and the parties would split the revenue. That made sense under those circumstances. Now, however, with the Rays wanting to look at other locations in the bay area, it is the city's responsibility to try to manage transition in a manner that generates a net positive number of jobs and revenue as quickly as practical.
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If the Rays come back to the city with an agreement to leave town and terminate their use of the Trop early, it seems grossly unfair to force the city to split the redevelopment revenue from this site. The Trop site is the largest piece of urban land potentially available for redevelopment in Central Florida. It may be worth up to $100 million. The alternative to splitting the development revenue is to wait until the Rays vacate the site. This is clearly not an attractive option.
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If the Rays come back with a termination agreement to stay in St. Petersburg if a new stadium is built, then the revenue from the sale and redevelopment of the Trop will form the foundation to fund the new facility. I believe most people would accept that. This is the best option for our community, and should be our initial focus.
The reason the redevelopment issue comes up now is that it amounts to tens of millions of dollars from the potential sale or lease of the land. Also, this is the last opportunity for the City Council to raise this issue. The memorandum of understanding that the mayor and the Rays presented to council requires us to approve a future termination agreement as long as the Rays accept the termination fee. It was speak up now, or accept it later.
Council members have spoken since the meeting, wishing the mayor and the Rays a relaxing holiday. Then, please sit down and bring back an agreement that the Rays, the mayor and the City Council can approve.
Play ball!
None of this explains away the fact that section 4, subsection 4A, and subsection 4D of the MOU state that the City will only be paid if the Rays play somewhere "other than the DOME in Pinellas or Hillsborough." If the Rays play in Hillsborough, the schedule of compensation does not apply. So they go to Tampa for free. This deal was "something for nothing." That explains the Rays' terseness while trying to push the deal through before anyone had closely read it. Subsection 5A requires the City Council to approve basically any Termination Amendment that the Rays and Mayor subsequently throw together. Section 7 states that all of the relevant provisions survive the 12/31/17 "termination" of the MOU. So the MOU is not actually restricted to 3 years. It is indefinite. So in review: (1) No payment if the Rays go to Tampa, (2) No council power to reject the termination deal, (3) MOU is operative indefinitely (not restricted to 3 years). This is an interesting combination of the Rays being very, very clever at what they do and the City of St. Petersburg being very bad at what it does. A fool and his money are soon parted, particularly when Wall Street people are involved. Tip of the hat to General Counsel Higgins and his legal team for getting this trojan horse as far as they did. It would have been interesting to see this deal approved and signed. The consideration running to the City is illusory. The appearance of compensation (given the way the deal was presented by the Mayor and the marginally literate local press) is a sham. Thus, the MOU could have been challenged as unenforceable. Note that the parties call this document a MOU, rather than a contract or a contract amendment. The city badly needs someone who (a) has a law degree and (b) can read and interpret contracts. Someone should email the MOU to the Mayor's first-year Contracts professor. He almost gave away the farm and his shirt without even knowing it. A law degree is fun, because you can often be the only person in the room (city?) who knows what is actually going on.
ReplyDelete1) I won't take offense by the "marginally literate local press" comment!
Delete2) The city's lead attorney has been the only reason the Rays are still at the Dome - he negotiated the original deal - but he admitted he did the best he could given the mayor's direction on this MOU - he still didn't love it.
Of course, another fun aspect of this is the fact that the City Council came so close to approving a deal that would have let the Rays go to Tampa without compensating the City. Nurse stumbled upon a tangential nugget that saved the day by accident. Back patting for Nurse, back patting for Silverman's magnanimity. They are all acting so sensibly. Don't congratulate someone who whiffed on a purse snatching.
ReplyDeleteThis document itself and the presentation of the document by the Rays, the Mayor, and the local newspaper will have a major role in future litigation. Given the similar farces in Miami and suburban Atlanta, the litigation could have an impact well beyond the Rays and Tampa Bay. This bad-faith trash-law is an embarrassment to the sport and to the city. The existence of the MOU is powerful ammo. Don't let the door hit them on the way out. "Yes, Your Honor, based on our negotiations the City expected to be paid if we went to Tampa. However, Your Honor, the document as drafted does not require the Club to pay the City for a move to Tampa." It will be fascinating to watch a deep-pocketed firm run with this. Somewhere in all of this, there's a hook to "commerce among the several states." As if there was any doubt, this bad deal might finally show that in the 92 years since Justice Holmes' declaration that baseball is merely an exhibition, baseball has become a business. The plain business meaning of this one-sided business document is quite clear.
ReplyDeleteIs there a link to the Use Agreement and the MOU so we can read it? Seems that lots of people (journalist, analyst, editorialists, ...) are talking about it but never read it.
ReplyDeleteI would love to be able to read those.
Yes: http://shadowofthestadium.blogspot.com/2014/12/breaking-rays-st-pete-agree-to-deal-to.html
DeleteThere is nothing more American than the pretense of expertise and the offering of uninformed opinion. Everyone does it. But not everyone does it as a career. I stayed at a Holiday Inn Express last night, so here is my editorial/article/blog post in support of the proposed Rays deal.
ReplyDelete