The decision by Frank McCourt to hang onto the parking lots and land surrounding Dodger Stadium is already complicating the sale of the team and caused one high-profile group to withdraw from the bidding process.
Developer Rick Caruso and former Dodgers manager Joe Torre decided to pass on bidding for the Los Angeles Dodgers and Dodger Stadium after discovering that McCourt intended to keep the lots, per the Los Angeles Times, as well as enforce an existing contract where the Dodgers lease the lots for $14 million annually. That MLB signed off on this provision is interesting and a little sloppy: it severely diminishes the value of the total package while at the same time takes out the only asset in the packages with any true upside. Indeed, having the ability to develop the land surrounding the ballpark is what interested Caruso — and McCourt, way back when — in the Dodgers package: it’s a very attractive parcel of land for future development in the heart of Los Angeles. While there’s certainly some upside in restoring the Dodger brand and bringing fans back to Dodger Stadium, it’s safe to say there’s considerably more upside in the development rights to Chavez Ravine.
And McCourt’s decision will certainly impact the sale price. McCourt and MLB were both anticipating a sale would be worth $1.5 billion, but at least one offer was reduced by at least $300 million after the bidders discovered the lots were not part of the deal. And we’re guessing any potential sale will come after a renegotiation of the $14-million annual rent for the parking lots.
The whole sales process has been in flux. Peter O’Malley has withdrawn from the proceedings as well, but has offered to help any new owner in the transition process after a sale. And while 11 groups were initially approved by MLB to be part of the bidding, at least two have dropped out, with two more showing considerably less interest in recent weeks.
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