Getting Out Of The Trop Lease Might Be Easy For The Rays…Or Not
New Stadium, The Trop September 24th. 2009, 2:05pmStephen Nohlgren of the St. Pete Times spoke to several people, including St. Pete Mayoral candidates about whether or not the Tampa Bay Rays can get out of their lease and move to another city.
One of the biggest sticking points may be how a judge interprets the lease and whether the Rays are a tenant or a business partner.
Most leases call for rent payments over a specified term. If tenants leave early, courts usually award the landlord whatever money is owed for the full term…City officials are quick to stress that the Trop contract is a not a lease and little rent is paid…The contract is a “use agreement,” they say. The Rays got a stadium in 1996 under original owner Vince Naimoli. In return, he and any successors pledged to play there for 30 years.
Some think the lease is “ironclad.” Others think a judge “could refuse to enforce key provisions,” or even refuse to enforce the 17-18 years that remain on the Trop’s lease.
Then-city attorney Michael Davis warned St. Petersburg council members that injunctive relief was not a guarantee when they approved the 1995 contract. “It is largely within the discretion of the court,” Davis said at the time. “There is no certainty that you will obtain it.”
Nohlgren goes on to argue that even if the city of St. Pete could fight an attempt by the Rays to leave, they may not want to, noting that a buyout may be a better option.
Can St. Pete keep the Rays from moving across the bay or farther? The answer to that right now is a gigantic “maybe.” But if a fight erupts and it does get to that point, and a new stadium is not built, stopping a move would only delay the inevitable.
New stadium for Rays? What the lease has to say [St. Pete Times]
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One of the reasons the team was sold so cheaply to the Sternberg group ($65M for their controlling stake) is the lease and the facility it is tied to. It is not favorable for them to threaten to move the team (one lesson the City leaders learned after being on the other side of that for so long). If they tried to move without the City’s blessing, they are going into a circuit court with an elected judge making the initial ruling, and then to an appelate court with elected judges and then a state supreme court with elected judges.
I find it hard to fathom that any elected judge is going to rule in favor of out-of-state owners taking a business out of the area and (most likely) the state. It is not going to happen.
So everybody can relax and try to figure out what the best option is. I think in this case the City may be saving the Rays from themselves — had the Al Lang plan gone through, the Rays were going to put themselves on the hook for $100M of the debt service ($8M a year for 30 years), or about 12% of their payroll (they pay about $2-3M under the current lease, maybe less). They are better off spending that on players, letting the Trop age and the franchise mature and then see where they should be playing their games for the next 30 years. It is too soon to tell.
In the interim, look for Stu to take a run at his beloved Mets (the Wilpons have been crippled by the Madoff fraud) and he’ll spin the Rays off to a new set of owners.
great analysis Gus, for the most part I disagree with whatever you say about personnel decisions, but you are dead on here (minus the last paragraph). The Rays have to find a way to placate the city of St. Pete while making their product more available to the wider population of the area and downtown St. Pete does not fit that mold.
I’m not sure Stu has the cash to go make a run for the Mets, but I’m sure that is what he’d love to try and do (along with any other man raised in the NYC area born after 1960 who grew up a Met fan). But of all the current baseball owners, he fits the profile (and John Henry ended up owning the Red Sox by first buying the Marlins, so it is not unprecedented).
As to personel, I’d note that Kazmir continues to give the Angels quality starts in 2009 (starts the Rays may have been able to use in a playoff push and starts that would have increased his trade value in the off-season).
What kills me is that the Florida Marlins can get a stadium. YES!!! THE FLORIDA MARLINS!! The owner of the Marlins is one of the dopiest owners in MLB. The Marlins payroll is lower than the Rays and they have less money than the Rays. If Florida can manage to get a new stadium, so can Tampa Bay. The Rays need to get out of St. Petersburg and play downtown Tampa. Whatever happen to the Rays playing 3 games at Orlando once a year?
Try not to look at the Marlins situation. The city of Miami is notorious for political malfunctions. That stadium deal is really bad for the city. They are contributing an enormous amount, and relinquishing the right to just about any revenue generated by the stadium. The estimates on cost are already astronomical, and if history is a gauge, the final bill will be record setting. I love baseball, but I don’t want the city or the county to bankrupt itself trying to retain this team. Also, the Marlins had been aggresively pursuing a stadium deal for 10 years. The Rays have only thrown a line in the water. The two situations aren’t comparable.
Also, nobody really knows how much money any of these teams or owners have as these private enterprises have no duty to report financial data to the public.
But in the case of the Marlins it was basically 3 city commissioners, and 8 county commissioners who handed these owners a sweetheart deal.
Nice analysis, Nate.
Franchises are, indeed, private businesses that don’t need to report financial data to the public. But perhaps those franchises that want publicly subsidized stadiums should be required to open their books to their “investors” — e.g. the area’s taxpayers. I can’t exactly apply for a government welfare program but refuse to disclose my income to see if I merit public aid. Why should business be different?
Delayed reaction by me. I think your point about private companies being required to have some transparency if they want a public handout has a lot of merit.
One more thing. The other baseball owners would freak out if the Rays opened their books
7,000 fans a game at Disney means they are never coming back to Central Florida, now or forever.
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