Here to stay? Rays non-relocation document for new stadium not public yet

Mayor Ken Welch said St. Petersburg and the Tampa Bay Rays were “engaged” when he chose the Rays and their development partner Hines 14 months ago to redevelop Tropicana Field into the Historic Gas Plant District.

The St. Petersburg City Council since has approved more than $1 million on outside attorneys to negotiate agreements with Pinellas County and the team. The council and County Commission will vote on the plan, which includes 12 separate agreements reviewed by the Tampa Bay Times.

But the document that would keep the team committed to St. Petersburg — a prenuptial agreement of sorts — isn’t in the publicly available pile yet. It would prescribe the financial penalty if the Rays break things off with the city before the deal expires in 30 years.

Two weeks after the Tampa Bay Times inquired about the agreement, the city said this critical document is being drafted by outside counsel and isn’t subject to public disclosure yet.

Mayor Ken Welch said a non-relocation agreement is “central” to the larger deal and that the city would not move forward without a “strong” one. It is mentioned in passing references multiple times in drafts of the overall stadium operating agreement.

Committing to playing games in St. Petersburg for the duration of the lease is at the root of the stadium saga.

In the sports law world, St. Petersburg is known for having an ironclad agreement that kept the Rays from “directly or indirectly” initiating negotiations to use any facility other than the Trop for games. It’s why former Mayor Rick Kriseman had to get City Council approval to let the Rays look at potential future stadium sites in Tampa in recent years. That prior agreement expires in 2027, which is why they’re back at the negotiating table with the team seeking a new stadium.

Asked if the new binder would be as strong as the one in place, Welch said he would not make a comparison.

“I am feeling good about the process,” he said. “So if it takes a few weeks longer to get a successful group of agreements in place that council will approve, then I’m good with it. I think we’re still on a good track.”

When the Rays announced a tentative deal in September, they unveiled a logo that read “Here to Stay.” That logo has been immortalized on websites and giveaway T-shirts to garner public support.

“It might be true that these things are still being negotiated but if it’s that important to lawmakers, I’m assuming they would’ve pushed for it right out of the gate,” said Geoffrey Propheter, an assistant professor at the University of Colorado Denver whose research delves into the economics of sporting arenas. “If it’s a year later and it hasn’t (been drafted), it doesn’t mean it’s not important, it just means it’s not as important as other elements.”

The first thing

Former City Attorney John Wolfe, the architect of the 1995 agreement in place today, said the paragraph that barred both the city and the team from dealing with anyone else was in place from the start of negotiations.

For that, Wolfe said, he gave up the city’s cut of parking revenues, a box suite and control over renovations.

“They had a list of what they wanted, I had a list of what I wanted. I wanted that in the agreement,” Wolfe told the Times. “So I would just give in on certain other things and they stayed away on what I wanted.”

Wolfe said he rolled that paragraph over from a non-compete clause the city signed with then-team owner Vince Naimoli before he even owned a franchise. The city agreed not to court another franchise, and Naimoli agreed not to flirt with other cities. “It was fortunate it did stay there,” Wolfe said.

He said while the agreement helped secure bonds to pay for the stadium, he had a more important goal. Wolfe said he wanted the team to stay in town for the length of the contract.

The 1995 agreement was brokered between Wolfe and John Higgins, who still is the Rays’ general counsel and senior vice president of administration.

“I was paid less than $100,000 a year for negotiating that,” Wolfe said. “It was a simpler time.”

Wolfe said he has confidence in the city attorneys whom he hired that are working on the deal.

“It might not have been written but I’m sure it’s been discussed,” he said. “You don’t have to write certain things down to negotiate.”

The 1995 agreement didn’t specify the financial penalty for leaving town, which means a court or a jury would decide an amount. That may not be the case this time, said attorney Martin Greenberg. The agreement stated that a violation “will result in irreparable harm and damages that are not readily calculable.”

Greenberg is the founder of the National Sports Law Institute at Marquette University Law School and wrote about the Rays’ and St. Petersburg’s current stadium agreement in a law review article on non-relocation agreements in Major League Baseball. He said a new non-relocation agreement could be as ironclad as the current one but with agreed-upon liquidated damages that shrink the longer the team stays in the stadium. That could take time to negotiate.

“I’m surprised it isn’t completed. It’s probably one of the most important provisions in the lease, but I guarantee you will get one,” he said. “What may be taking some time is coming to an agreement upon defining what those liquidated damages are and what the team would pay to essentially break the lease.”

Welch said he consulted with Wolfe and former longtime City Administrator Rick Mussett before he took office in January 2022. They spoke about how the Rays have half of the development rights on the property through 2027. That means if Welch stuck with an earlier deal Kriseman brokered with Midtown Development, the Rays would walk away with half of whatever was built around Tropicana Field.

“I did listen to the advice of my elders,” Welch said.

Important for bonds?

Greenberg said a non-relocation agreement could be part of the financing package and used as collateral for bonds covering the city’s share of stadium construction costs.

St. Petersburg’s plan is to finance its $287.5 million contribution to the stadium and $130 million commitment for roads in the surrounding development, as well as the demolition of Tropicana Field, through tax-exempt bonds. The city also plans to issue bonds on behalf of Pinellas County for its $312.5 million share for the stadium and the $50 million pledged by the Rays for things like roads and sewers.

“It may be important to bondholders that are issuing money and expected to be paid back,” said J.C. Bradbury, an economist at Kennesaw State University whose research has found that publicly subsidized sports venues are not sound investments.

Matthew Mitten, a law professor at Marquette University’s Law School and executive director of the National Sports Law Institute, said a non-relocation agreement is an important protection for the host city, but the timing of when the document is drafted is less important.

“There really just needs to be some appropriate protections in there to protect the whole city’s interest,” he said.