Authority loses more in O's deal

$600,000 in fees, interest lift $10 million settlement


October 24, 2001|By Jon Morgan | Jon Morgan,SUN STAFF

Making the $10 million investment in Camden Yards required to satisfy an Orioles grievance will cost the Maryland Stadium Authority an additional $600,000 in fees and interest, and possibly more.

The authority yesterday approved and sent to the Board of Public Works a financing plan for meeting the terms of an arbitration decision. If the board, which is scheduled to hear the matter today, approves the plan, the authority's outstanding debt will rise to $233.9 million - just shy of its $235 million statutory limit.

The authority built and operates Oriole Park and PSINet Stadium.

The Orioles, claiming the authority violated its lease by negotiating more generous terms with the Ravens, won in July a partial victory before arbitrators. The panel ordered the state agency to give the baseball team the right to sell the stadium's name to a commercial sponsor and to deposit $10 million into a stadium improvement fund, among other things.

To make the $10 million payment by the Dec. 1 deadline - more than a month before the state legislature convenes its annual, 90-day session - the authority will sell $10.25 million in short-term notes. The idea is to give the General Assembly a chance to find the money in the state budget that will be written early next year or to sell bonds to pay the noteholders.

Issuing the notes will cost about $250,000 in fees and the interest will total $366,473 at a 5 percent coupon rate. If the bonds proposed in the financing plan are issued, another $5.6 million in interest will be paid by the time they are retired in 2014.

Stadium authority executive director Richard W. Slosson said lawmakers asked for the temporary funding measure to give them time to find the $10 million, possibly by trimming other items from the authority's budget, diverting lottery funds, or by a mix of appropriations and bonds.

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