Orioles-authority dispute now in arbitrators' hands

$50M in rent credits, fee are at issue in parity case


May 03, 2001|By Jay Apperson | Jay Apperson,SPECIAL TO THE SUN

WASHINGTON - The question of whether the Orioles should receive more than $50 million in rent credits and the right to sell the name of the baseball stadium at Camden Yards was placed yesterday into the hands of a panel of arbitrators.

"We've taken our best swing and now it's up to the panel," David E. Kendall, a lawyer for the Orioles, said after closing arguments in the team's "parity" case against its landlord.

Yesterday's proceedings capped legal wrangling between the team and the Maryland Stadium Authority that began shortly after Baltimore landed a professional football team in 1995.

The Orioles' lawyers contended the rent credits are mandated by terms in the 1992 lease that guaranteed the team a "fairly comparable" deal to any given to a football team. They also disputed the stadium authority's claim that the Ravens paid $10 million for the rights to sell the name of their stadium, and said they should get similar rights for free.

"This is really a case about promises," Kendall told the arbitrators. "There are at least 11 areas where the Orioles are entitled to relief because of the promises originally made to the Orioles, which induced them to stay in Baltimore."

But lawyers for the stadium authority, arguing their side of what could be a key issue in the case, said the lease does not allow the Orioles to pick and choose from among terms. They argued that the agreements should be compared in their entirety, saying the Orioles' deal is as good as the one given the Ravens - and is in some ways better.

"At the end of the day, we think the Orioles' claims must be denied - each and every one," said George Beall, a lawyer for the stadium authority.

Arbitrators did not set a firm timetable for ruling. They kept open the possibility of asking the two sides for additional information. Once the arbitrators decide to formally close the "record" in the case, the panel, which is headed by former FBI and CIA chief William H. Webster, will have 30 days to render a binding decision.

At stake are millions of dollars in rent proceeds that the Orioles normally pay to the stadium authority. Beall told the arbitrators their decision "could be of monumental significance to the agency."

The Orioles are seeking rent credits of more than $52 million, including:

$26.4 million, the value that the team has placed on its costs in building concession stands at Oriole Park. The team says it is due this money because the Ravens were not required to pay for building concession stands at PSINet Stadium.

$12.8 million for the rent the team paid in its final two seasons at Memorial Stadium, adjusted to account for value of money over time. The team says it is entitled to the credit because the Ravens played rent-free at Memorial Stadium while the football stadium was being built.

$8.2 million, representing the estimated value of the Ravens' rent-free training facility in Owings Mills. The Orioles say they are due this compensation because the state does not provide them with a similar, off-site training facility.

$5 million the team says it has overpaid on private suites at Oriole Park. The Orioles argue they were unfairly required to pay interest on the $9.1 million the team paid for construction of the luxury boxes, while the Ravens received what amounted to a no-interest loan for construction costs.

In addition to the rent credits, the Orioles are asking for the right to profit from non-baseball events at the stadium, for more luxury boxes at Oriole Park and for the right to sell the stadium's name - even though they reiterated that they do not intend to do so.

Orioles lawyers repeated the argument, made throughout testimony in the case last fall and in legal briefs, that the $10 million reportedly paid by the Ravens for naming rights actually went toward the team's share of stadium construction costs.

The stadium authority insisted that the naming rights were in exchange for the Ravens' agreement to make upfront payments on construction costs, and for making an additional $10 million payment. The stadium authority said each team paid roughly $24 million toward construction of its stadium, when $10 million of the Ravens' payments are counted toward the purchase of naming rights.

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