Saints, St. Paul hammer out ballpark lease agreement

St. Paul and the Saints baseball team finalized a lease for the downtown ballpark that assigns most of the operating and maintenance expenses to the Saints, while giving the city a cut of the team's annual proceeds and a percentage of the sale price should it be sold before 2020.

The development and use agreements, which the City Council will be asked to ratify Wednesday, spell out the respective responsibilities and obligations for the city and the team regarding the $63 million ballpark expected to begin construction in early 2014.

Team owners Marvin Goldklang, Bill Murray and Mike Veeck also need to sign off on the lease.

The city will own the ballpark, 82 percent of which will be paid for with public money from the state and the city, while the minor-league Saints will run the facility year-round and use it for 70 games a season.

"We feel strongly that the city's project and legal team did a great job … for the city's taxpayers," said Brad Meyer, a spokesman for the St. Paul Parks and Recreation Department. The agreements, he said, "represent a definite win-win-win for everyone involved."

The Saints' $11 million share of the ballpark's construction consists of $8.5 million in regular rent payments to the city and $2.5 million in cash. But the team will pay the lion's share of the ballpark's operating and maintenance costs, estimated at $5 million a year.

Under the agreements, the Saints will pay up to $1,000 per game for traffic control around the ballpark and insure all team games and events. The team will contribute $92,500 annually to a capital maintenance account to cover future improvements and ballpark needs.

The team will be required to issue an annual report to the city detailing its annual net revenues, and to cut St. Paul a check should they go beyond $500,000. The Saints would pay the city 5 percent of revenues between $500,000 and $1.5 million, 7.5 percent up to $2.5 million, and 10 percent of proceeds over $2.5 million.

Anything the team gets over $500,000 in naming rights also would go to St. Paul. The city would use the revenues to pay down the $6 million internal loan it made in July to help close an $8.8 million funding gap.

The lease also gives the city a hedge should the Saints be sold in the next seven years. A team sale before the first pitch is thrown in May 2015 would guarantee the city 10 percent of the sales price; that cut would drop each year until May 2020, when the team could be sold without penalty.

On the other side of the ledger, St. Paul will be required to contribute $50,000 each year for ballpark operations and maintenance. In the ballpark's first three years the city also would pay groundskeeping costs of $75,000 annually to ensure the field turf is properly developed and maintained.

Meyer announced that the city made its first dent Thursday in drawing down its own $6 million loan: a $1 million redevelopment grant from the state Department of Employment and Economic Development that will be used to help clean up some of the polluted soil at the ballpark site.

Demolition on the site, delayed for more than two weeks last month after a worker was killed by falling concrete, is expected to wrap up in mid-November, Meyer said. Design drawings also should be ready next month.

One of the remaining details to be settled — how much Ryan Companies would pay for cost overruns — won't be settled until early next year, he said.