The St. Louis Cardinals would pay the city of Memphis $300,000 a year for 17 years to use AutoZone Park, and the major league franchise’s front office would operate AutoZone Park for the city through a limited liability corporation owned by the St. Louis Cardinals during that time.
The Cardinals and the LLC would bear any operating costs of the franchise and ballpark, as well as deficits in either.
Those were among the details included in Tuesday’s full debut of the proposal that would involve the city of Memphis buying the ballpark for $20 million and committing another $5 million for improvements at the ballpark. The Cardinals would buy the Memphis Redbirds franchise in a complex deal among six parties, and the Cardinals would put up $15 million for its share of ballpark improvements.
The City Council recessed its meeting this week without voting on the agreement that would see the city buy AutoZone Park. The council resumes the meeting Monday.
(Daily News File/Lance Murphey)
The council recessed its Tuesday, Dec. 3, meeting without voting on the agreement. The council resumes the meeting Monday, Dec. 9, with the ballpark deal the only item left on the agenda.
The 17-year term of the agreement comes with two five-year options.
Revenue bonds to finance the city’s purchase of the ballpark would be issued through the Center City Revenue Finance Corp. They would be paid off with the $300,000 annual rent from the Cardinals; a state sales tax rebate on ticket sales, concessions and other items, including sponsorships; and annual payment-in-lieu-of-taxes payments on the adjoining Moore building and the park’s parking garage.
If the sales tax rebate stream doesn’t meet its annual level, the Cardinals agree to chip in up to $100,000 toward the goal.
The total source of funds toward the debt service on the bonds next year is estimated at $1.7 million, with projections that the funding will increase over the years.
The ballpark and the team are owned by the equity firm Fundamental Advisors after the Memphis Redbirds Foundation defaulted on bonds in 2009.
Cardinals general manager John Mozeliak said without the deal, Fundamental Advisors could foreclose on the ballpark and the franchise and sell them at auction – possibly with parts of the ballpark being sold in pieces and the franchise moved to another city.
And he said the year-end deadline for the deal is real and driven by Fundamental Advisors.
The city’s bond counsel on the matter, Tyree Daniels of Raymond James, said a delay much past Monday’s meeting would “present us huge problems … in terms of selling the debt and closing by (Dec.) 31.”
“After the second week of December, it’s going to cost the city more and more to issue bonds,” Daniels added, saying investors will start to close their books on 2013 by then.
The Cardinals organization has considered buying the Redbirds for six years, according to Mozeliak, and has had concerns about the way the Memphis franchise was being marketed and operated.
“We do feel this has been an underachieving team for the last decade,” he said. “We want the vibe at AutoZone Park to be reinvented. On any given night over several years, it’s been missing that.”
Meanwhile, the Shelby County Commission, which owns some of the land on which the ballpark is built, will be asked to sign off on the deal later this month.