Orioles request lease parity Letter triggers clause seeking deal that's equal to Ravens'

September 28, 1996|By Jon Morgan | Jon Morgan,SUN STAFF

The Orioles are asking the state for millions of dollars in rent credits, stadium loans and improvements to Oriole Park as part of what the team claims is its legal right to parity with the Ravens.

By triggering the "parity clause" of the team's lease, Orioles officials have begun what is sure to be a long and complicated process of comparing the terms of the deals the Maryland Stadium Authority has bestowed on its two major-league tenants.

The matter will ultimately be resolved through negotiations or binding arbitration. The Orioles, already one of the richest teams in sports, want at least partial agreement before next season.

In a 13-page letter dated Sept. 13, Orioles attorney Alan M. Rifkin said: "The Orioles seek not to benefit any individual, but rather, to benefit Orioles fans by maintaining the high standard of quality they have come to expect at Oriole Park."

Also, enhancing Oriole Park will increase its economic contributions to the city and state, he said.

In an interview yesterday, Rifkin said: "The Orioles haven't sought all they could but those things we felt were most germane to the operation of the facilities."

Stadium authority chairman John Moag said: "We are reviewing the letter. We obviously have some disagreements, but there is a specific process for resolving this. "

Both the Orioles' lease, signed in 1992, and the Ravens' memorandum of understanding, signed Oct. 27, are considered among the most team-friendly in the industry and have catapulted the value of both franchises to the top of their respective leagues.

However, the Orioles contend that some aspects of the deal that Angelos lured the football team from Cleveland are superior. The Orioles' lease guarantees them "fairly comparable" -- but not identical -- lease terms that take into consideration differences in the economics of baseball and football.

The Orioles and stadium authority disagree even on such fundamental issues as the dates that must be compared and the buildings that are covered.

The Orioles want concessions to be retroactive to the signing of their lease, in 1992, and to include credits against future rent equal to the savings the Ravens get from the cut-rate terms being charged during their two seasons at Memorial Stadium. The Orioles also want some credit for the millions of dollars the state has spent fixing Memorial Stadium for temporary use by the Ravens.

Stadium authority officials have said the parity clause only applies to the Ravens' downtown stadium, set to open in 1998, and the full lease that is still to be negotiated for that facility.

Among the concessions sought by the Orioles:

The Orioles' rent is calculated as a percentage of revenues. In lieu of rent, the Ravens will reimburse the state for the cost of operating the stadium. The Orioles want to adopt the Ravens' terms, even though the baseball team now pays several million dollars less in rent every year than it costs to run Oriole Park.

Orioles representatives have said they think running Oriole Park might be done more efficiently. Moag has indicated he may support this change.

At least part of the Ravens' stadium will be built in a federal "empowerment zone" and state enterprise zone, which accrue tax benefits for the team if it employs residents of the zone. The Orioles want the state to provide a credit against their rent equal to the savings the Ravens achieve.

The Ravens will have the right, when their new stadium is opened in 1998, to book non-NFL events such as concerts, take a management fee and split the profits with the state. The Orioles want the same ability, and Moag has said he is willing to go along.

Both teams are required to contribute to their stadium construction costs, with the money targeted toward the finishing of sky boxes.

The Orioles' lease specifies a $9 million contribution, advanced by the state and being paid back with interest. The Ravens' deal, modified by legislation this spring, calls for a $24 million contribution, but leaves the terms of payment up to negotiations. The Orioles want terms at least as good, as well as $15 million in additional loans for Oriole Park improvements.

The Orioles are asking for an unspecified increase in the number of sky boxes, now at 72, to bring it closer -- but not up to -- the projected 108 that will be in the Ravens' stadium.

The stadium authority has asserted that the lease calls for a parity of lease terms, not stadiums.

Pub Date: 9/28/96

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