Aberdeen City Council members hope to have an agreement in place “sooner rather than later” for management of Ripken Stadium for this year and beyond, the city’s mayor said.
That could be as early as the next city council meeting on Feb. 12, Mayor Patrick McGrady said, but what the city ultimately votes on will be significantly different in one key area – how the city will receive revenue.
At its meeting scheduled for Jan. 8, the council had been planning to consider an agreement with Huntley Sports Group to assume management of non-baseball events at the stadium owned by the city and home to the Aberdeen IronBirds, the minor league baseball team whose majority owners are Cal Ripken Jr. and Bill Ripken.
The meeting was postponed because of weather, however, and the agreement was then pulled from the agenda of the rescheduled meeting Jan. 11 because of issues with regard to the IRS regulations when it comes to municipal debt obligations, McGrady said.
After Monday’s regular council meeting, council members met privately with the city’s attorney, bond counsel and a representative of Huntley Sports Group and requested from the bond counsel a plan to move forward and draft an agreement, he said.
“The council has instructed all of the lawyers to work toward an agreement the council will be able to approve sooner rather than later,” McGrady said. “There’s an understanding tme is running out in terms of 2018 and we’re trying to find a solution that will work for all parties.”
The city’s bond lawyer, who reviews its tax obligations, raised concerns over the city’s compliance with IRS safe harbor provisions for municipal debt obligations and tax ramifications, McGrady said.
“We’re making sure that the contracts that are in place, that the actions of the city in the past and the proposed action of the city in the future do not cause violations of federal tax law that could cause the city to be fined,” he said.
Because the stadium was built using tax exempt municipal bonds, violations could include a private entity being the sole user of the project, McGrady said, by way of an example.
At the Jan. 11 meeting, the council asked for further direction on how to be in compliance with the law. On Monday, council members asked for more specifics, which include re-working the draft agreement they had been ready to consider.
“The document was not ready for public consumption,” McGrady said. “The document that will ultimately come out will be substantially different.”
One of the most significant changes will be that, under safe harbor provisions, a manager can not be paid a percentage of the revenue, McGrady said. Such provisions, which were recently revised by the Internal Revenue Service, address private uses of facilities, like Ripken Stadium, that were financed with tax-exempt bonds.
As part of the original draft agreement with the city, Huntley Sports Group would have managed non-baseball events for a $10 annual fee and 50 percent of the company’s net income each year — the remainder of the net income would have gone to the city.
The changes are necessary because the city is “trying to be in compliance with the safe harbor provisions,” McGrady said. “We have a road map to deal with it, but I can’t share anything else because I don’t know what it’s going to look like.”
He said the council asked to have an agreement to work from, if not before the next council meeting, then by that day.
“The council was prepared to have an agreement done a month ago and we’re tyring to make sure we’re covering our bases,” the mayor said.
It’s possible, he said, the council could vote on the agreement Feb. 12, but only if the agreement they’re considering is legal and if the council has had the chance to look it over.
“If it’s prepared, reviewed and it’s something productive, yes, everybody wants to see action on this,” McGrady said. “Huntley Sports Group, the city is very much looking forward to working with Tufton Professional Baseball on events at the stadium as soon as possible.”
On Jan. 1, the city assumed all management of non-baseball events and McGrady said those that had been scheduled are continuing. The church continues to meet at the stadium weekly and events such as Home Runs for the Homeless and the Army military surplus show are going on as scheduled.
Any new event requests are being forwarded to Huntley Sports Group, so once an agreement is in place, the company can resume booking events.
‘Productive and optimistic’
In the 10 days between council meetings Jan. 11 and Monday, Huntley CEO Athan Sunderland told the council, he has met with representatives from Tufton Baseball and the Ripken family to discuss Huntley’s management of the stadium.
“I am pleased to report that the meeting was both productive and optimistic,” Sunderland wrote in a letter to the city, the Ripkens and Aberdeen residents that he read at Monday’s meeting. “We concluded that Huntley Sports Group’s potential involvement was seen as collaborative and positive, not adversarial.”
A representative for the Ripken and Tufton said the meeting was a good one.
“It was a positive and very informal meeting in an effort to get to know each other and exchange ideas on a myriad of subjects,” John Maroon said, reiterating the IronBirds are committed to Aberdeen.
Some of the issues facing the city, the Ripkens and Huntley are “imperfect issues that require unique solutions,” Sunderland said. “We challenge us all to redefine the path ahead not as ‘obstacles to overcome,’ but rather as ‘situations in need of solutions.’”
His firm will not try to bully its way through obstacles, instead it will look at situations objectively and offer “pragmatic, realistic and sustainable solutions,” he said.
Huntley will focus on what solutions provide maximum benefit to the stadium’s operations as a home to the IronBirds and the economic engine of Aberdeen; allow for the Ripken familiy to continue operations and investment in Aberdeen; and mitigate risks to the city and provide simultaneous opportunity to advance Aberdeen’s financial well-being, Sunderland said.
After meeting with the city and the Ripkens, Sunderland said he is confident everyone wants the same thing: “A healthy and happy Aberdeen, a successful stadium, a successful government, a successful baseball team and a chance to write the next chapter of Aberdeen’s future as a community that bonded together to lead the collective team through a situation in need of a solution.”
A representative of Tufton and the Ripkens was not available to comment Wednesday.
This story will be updated.