VOL. 129 | NO. 6 | Thursday, January 9, 2014
Council Approves Ballpark Deal, Changes Coming
By Bill Dries
When AutoZone Park opens for another season of Redbirds baseball, you probably won’t notice anything different about the ballpark itself, though it will be owned by the city and the Redbirds will be owned by the St. Louis Cardinals.
But John Mozeliak, the general manager of the Cardinals, says there will be an immediate difference in the presentation of the ballpark experience and the marketing of the Redbirds.
“I would imagine that you are going to see very little change as far as any new construction at this point, just because of the fact that we don’t have any time,” Mozeliak said after Tuesday’s vote by the Memphis City Council to approve the city buying AutoZone Park for $19.5 million and putting up $4.5 million toward ballpark improvements.
John Mozeliak, general manager of the St. Louis Cardinals, speaks to a gathering at a rally in the AutoZone Park plaza just before the City Council voted Tuesday.
(Daily News/Andrew J. Breig)
The deal includes the St. Louis Cardinals buying the Memphis Redbirds franchise and entering into a 17-year lease with the city of Memphis at $300,000 a year.
The Cardinals also put up the bulk of the money – $15.5 million – for the ballpark improvements.
“We’re still going to be very aggressive in trying to promote corporate sponsorship,” Mozeliak added. “In terms of seeing immediate change, our goal is to help rebrand this ballpark and we are going to do it right away.”
The first indication of what that could be like came at a noon rally on council day in the AutoZone Park plaza.
Mozeliak was the featured speaker in below-freezing temperatures. The several hundred people who rallied in the plaza then marched to City Hall, arriving at just about the time that the Wharton administration began giving council members documents that outlined the final version of the deal.
The rally was organized over a 48-hour period, with the Cardinals front office heavily involved.
The Redbirds and Cardinals contributed hot chocolate and food, Redbirds baseball caps and red knit caps, signs and foam fingers.
Mozeliak has described the Redbirds and their Memphis home as “underperforming.”
That underperformance was what caused the Redbirds Foundation to default in 2009 on the bonds used to build the stadium and equity firm Fundamental Advisors to effectively become the owner.
The current state of sales tax revenues generated by a franchise that sells 500,000 tickets a season prompted many doubts among council members and two delays last month in a final vote on the deal. Those sales tax revenues are the largest revenue stream for paying off the bonds that will finance the city buying the ballpark and contributing to improvements.
That meant Mozeliak’s task going into Tuesday’s council session was to again try to convince the council that the Cardinals are not buying the team to do what it has been doing financially for some time.
Mozeliak said the Cardinals plan to grow ticket sales incrementally over several years, eventually adding 100,000 a season to reach approximately 600,000.
“Our job is to make money, to make a profit at this ballpark,” he said. “We certainly aren’t coming down here trying to run losses.”
Mozeliak’s appeal to council members worked.
The deal garnered the support of some council members who had been critical of it last month, including council chairman Jim Strickland.
Strickland said the financing numbers as explained in the last week work for him, although there remains some risk.
“I believe there is little risk if we purchase the team, and it’s a much higher risk of failure of Major League Baseball in Memphis if we don’t.”
Strickland, like other council members, met privately with Cardinals executives and Memphis Mayor A C Wharton Jr. around and after the New Year’s holiday in an intensive effort to save the deal.
Wharton insisted in December that the council had to approve the deal by the end of the year in order for it to happen. It was just the beginning of a process Wharton described Tuesday as “grueling.”
“No Thanksgiving, no Christmas and no New Year’s,” he said. “If you look at the paper trail on this, there wasn’t a day that somebody, somewhere wasn’t emailing and working on this transaction. And then, of course, you got the pension and all of this stuff lurking in the background.”
Strickland said Tuesday that he came to support the deal because his view of sales tax rebate figures changed. The projections show growth over the 20 years of the bonds to be issued by the Center City Revenue Finance Corp.
That growth could include surplus sales tax rebate revenue from prior fiscal years to compensate in years when the revenue stream doesn’t meet expectations.
AutoZone Inc. also agreed to put up $100,000 annually over 10 years if sales tax rebate revenues don’t meet projections to help pay the debt. The Cardinals had already agreed to an additional $100,000 a year as a backstop if sales tax rebate revenue doesn’t meet projections.