A new-ballpark lease between the city of St. Paul and the St. Paul Saints (independent; American Association) calls for an expected rent of $600,000 annually, with profit-sharing in the mix.
Though the final details still need to be ironed out, there is a framework in place to be presented to the St. Paul City Council next Wednesday. From the Pioneer Press:
The plan includes a new idea for St. Paul professional sports teams: a profit-sharing agreement that gives the city anywhere from 5 percent to 10 percent of a team’s net annual revenue, though the team gets to keep the first $500,000….
The Saints will contribute $11 million toward ballpark construction, most of it through 25 years of rents that will go toward paying off $8.5 million in bonds issued on the team’s behalf by the St. Paul Port Authority. The final bond terms have yet to be determined by the Port Authority, “which will then finalize what the rent payment will be,” Meyer said.
The Saints also will contribute $1.5 million in cash, said City Finance Director Todd Hurley. The team has yet to decide how it plans to contribute the final $1 million. “They have until October 21 to notify us whether they’re going to upsize the bonds — which means upsizing their rents — or bring additional cash or equipment to make up for the $1 million,” Hurley said. “Their rent in general is right around $600,000.”
Profit-sharing isn’t used much in professional sports: for starters, they require teams to open up their books, and as we all know sports owners are a notoriously secretive bunch. But they’re also lacking for one other reason: it’s virtually impossible for municipalities to budget when the incoming figure is not known. It sounds like St. Paul is getting around this by not targeting profit-sharing for bond repayment, but rather to reimburse the city for funds spent on the ballpark as well as future capital expenditures — an item usually covered separately in a ballpark lease via fixed payments.
The new ballpark is expected to open for the 2015 season.
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