On June 15, 2009, the Redevelopment Commission met to transact regular business.
One of the items on the agenda, was the Naming Rights Agreement for Parkview Field. Â As you may remember, this agreement spells out the distribution of the annual payments ($300,000) by Parkview Health for the naming rights to call the ballpark, Parkview Field. Â Half goes to the City to be placed in the Capital Maintenance and Improvement Fund for the ballpark, while the other half goes to Hardball Capital, aka the TinCaps.
Commissioner Casey Cox presented the Commission with a Memorandum entitled, “Memorandum on the Renegotiation of Hotel/Stadium License Agreement in light of Parkview Naming Rights royalty distribution”.
In this memo, Casey proposed that:
- since The Harrison’s construction deadline passed on June 1st without any progress made towards starting construction, the City sould keep and
- the Stadium License Agreement with Hardball Capital provides for liquidated damages of $5,000 per day for a 90 day period for a total of $450,000 (This is after 180 days have passed after the initial breach)
- and that a Default Notice had been sent to Hardball Capital on June 2, 2009
the Naming Rights Agreement should be revised to pay $105,000 to Hardball and $195,000 annually to the Capital Maintenance and Improvement Fund. Â This would amount to $45,000 annually or the provided for liquidated damages of $450,000 over the life of the Naming Rights Agreement. Â Casey, in his memo, Â wrote that the revision would:
- Uphold the Redevelopment Commission’s fiduciary responsibility to abide byÂ the basic understanding of the parties contractual obligations;
- Allow the City to forbear from further enforcing the Agreement againstÂ BRE/Hardball while retaining the cash value of liquidated damages provided forÂ under the Agreements;
- Provide a reliable basis for receiving the new cash-flow directly from namingÂ rights while avoiding the legal process to force receipt of such sums;
- Provide the City with otherwise unanticipated revenue for abiding by itsÂ contractual obligation while not being punitive to BRE/Hardball.
Casey suggested holding the Naming Rights Agreement to allow for the language to be drafted and the Commissioners to have an opportunity to deliberate on the suggestion.
Redevelopment Executive Director Greg Leatherman pointed out that Parkview Health has not made the first payment. Â As soon as the Naming Rights Agreement would be approved, the first payment would be received.
Redevelopment Counsel John Wernet stated that it would be better to have this agreement finalized and then go back and renegotiate at a later date. Â He stated the City has that ability to do so. Â Part of the issue in not approving this agreement is that the agreement has already been specified in other agreements that have already been executed.
After a short debate, it was decided to vote approval on the Naming Rights Agreement, reserving the right to renegotiate at a later date.
I later asked Casey if it would have been best to hold the agreement as I didn’t necessarily agree with the decision, he responded,
I too am a little uneasy about passing it with that distribution in the agreement, but I’m happy that the point was made and it appears that this will be on the table as we move forward in dealing with the breach. For the first time since the deals were struck, we would be talking about cash flow back to the City that was previously unanticipated.