Stadium deal is taking shape

Aberdeen explores sale to Ripken with fee in lieu of taxes

March 28, 2007|By Justin Fenton | Justin Fenton,Sun reporter

The outlines of a possible deal between Cal Ripken Jr. and his hometown of Aberdeen on the sale of Ripken Stadium began to emerge yesterday, one in which the retired ballplayer's company could take possession of the stadium but avoid paying annual property taxes.

The city owns the 6,000-seat minor league baseball stadium and rents it to Ripken for his Aberdeen IronBirds games. If Ripken purchases the stadium and the land it occupies, he would also acquire tens of thousands of dollars in annual property taxes on top of the millions still owed on the stadium debt.

Aberdeen Mayor S. Fred Simmons said the city has a "tacit agreement" with Ripken to seek out an alternate fee in lieu of those taxes. The main sticking point, he said, involves determining any snags involved with passing on millions in debt payments on public bonds to the private group.

"The [property taxes] the stadium would bring in will probably be negotiated," Simmons said. "If in fact the Ripkens do take the stadium, it's very possible that one of the remedies could be a payment in lieu of taxes ... so they can pay the debt off and still keep some black ink."

A spokesman for Ripken Baseball said that there have been "broad talks" with Aberdeen about the outlines of a possible deal.

"They've encouraged the city to have those discussions and come back with specifics about the state's response and see where it goes," Ripken spokesman John Maroon said.

Yesterday, Gov. Martin O'Malley offered his support in facilitating a deal, adding that the state itself is "not interested" in purchasing the facility.

"If there are details the state needs to be involved with in order to make a private deal work, we'll work with Mayor Simmons and the city to accomplish that goal," said O'Malley spokesman Rick Abbruzzese.

Simmons said he only needs the state to help facilitate a deal with Ripken.

"All he [O'Malley] has to do is help us arrange the finances so we can be successful in turning things over to the Ripkens," Simmons said.

As The Sun reported Sunday, the $18 million stadium has become an annual drain on the small city's budget, prompting Simmons to seek out potential buyers. He has received at least two unsolicited private inquiries but said he wants to strike a deal with Ripken, whose company manages the IronBirds and pays the city a fee to host non-baseball events.

Aberdeen's best hope to shed the money-losing stadium venture is persuading a private investor or government agency to acquire the facility - something experts say will be difficult to do.

Unless the original agreement with the team is significantly restructured, a private investor would likely face the same operating losses that now cost Aberdeen hundreds of thousands of dollars a year. And a public agency - such as the Maryland Stadium Authority - would have to persuade a larger group of taxpayers to cover losses at the stadium.

Experts have said that the city likely must offer significant incentives to sweeten the deal for Ripken. In California, for example, stadiums are sometimes funded through land-use entitlements, said John Moag, a former chairman of the Maryland Stadium Authority who heads an investment banking firm that specializes in sports.

Harford officials, meanwhile, want to make sure Ripken stays on the hook for the state's $6 million share and could draft a bill this session requiring the repayment. Del. Barry Glassman, a Republican, said he was troubled by the idea of a private company using state funds to build a stadium and then purchasing the facility.

Another Harford delegate, Democrat Mary-Dulany James, said officials are working to find out whether there are restrictions on the money approved by the state under former Gov. Parris N. Glendening.

"The state grants money to subsidize schools, hospitals, stadiums, museums," James said. "If all of them were free to simply flip it to a for-profit entity, then we would have never granted money to it in the first instance."

justin.fenton@baltsun.com

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