Cal Ripken files suit against Aberdeen claiming breach of contract on minor league ballpark

Claiming conduct by the City of Aberdeen in recent years has made operating Ripken Stadium “unbearably difficult,” the company that owns the Aberdeen IronBirds has filed suit accusing the city of not living up to the terms of an agreement made nearly 20 years ago.

Tufton Professional Baseball LLC, owned by Orioles great and Aberdeen native Cal Ripken Jr. and his family, filed the complaint against the City of Aberdeen on Wednesday in Harford County Circuit Court.

Tufton had given the city until close of business Tuesday to respond to a letter it sent last week stating that Ripken’s company should take over management of nonbaseball events at the stadium because the city had not fulfilled its obligations to upgrade the city-owned ballpark.

The suit claims the city has recouped its initial investment into the stadium project — the debt service on $3 million — per a concession agreement entered into Dec. 7, 2000. Once the city has recouped its investment, the lawsuit says, management of the majority of events at the stadium — baseball and nonbaseball — becomes the responsibility of Tufton, based upon the original agreement between the two parties.

The suit also claims Aberdeen has not fulfilled its obligations to undertake and pay for capital maintenance and improvements at the stadium, as is also outlined in the concession agreement.

The suit takes to task Aberdeen Mayor Patrick McGrady, specifically, and the Aberdeen City Council, saying they have been difficult to work with in recent years.

“It is regrettable that after months of negotiations concerning the City’s obligations under our agreement, the City has failed to meet those obligations and instead has sought to impose conditions, risks and costs not included in the agreement. Contracts are meant to be honored. Tufton has done its part. The City needs to do the same. We are now compelled to ask the courts to step in,” John Maroon, a spokesman for Tufton and the Ripkens, said in a statement Wednesday.

The mayor and City Council members held a closed meeting following Monday’s regular City Council meeting, but McGrady would not disclose the subject of the meeting.

“The city and Tufton continue to be in discussion about the demands they made in the letter,” McGrady said Wednesday.

As of 5 p.m. Wednesday, the city had not been served with the suit, he said.

Deal is a deal

“The case is about a protection of a simple principle: contracts are meant to be honored — a deal is a deal whether between two businesses or a business and a local government,” the suit states.

Elected officials and government leaders may change, but the law doesn’t allow contracts to be enforced subject to the “political whims” of those elected officials or administrations, according to the suit.

“Local governments are held to their contractual obligations just like private citizens. Otherwise, the private sector could not rely on the enforcement of governmental contracts and, in turn, many services provided by the government would come to a grinding halt. Reliability and predictability are at the bedrock of every contract and that should be the case here,” the suit claims.

In the suit, Tufton is requesting that the Aberdeen mayor and council live up to the agreement signed 18 years ago — “at the time enthusiastically” — to bring the stadium and minor league baseball to Aberdeen.

The court action is necessary, according to the suit, because numerous attempts to negotiate with the city, including a mediation session in September, have been unsuccessful.

The agreement expires on Dec. 31, 2022, but Tufton has a right to renew it for an additional 20 years, according to the suit.

Operation of the stadium was running smoothly until shortly after McGrady was elected mayor in Aberdeen in November 2015, according to the suit.

“Over the last three (3) years, Mayor McGrady, his administration, and the City Council have taken increasingly aggressive steps to frustrate Tufton’s rights under the Concession Agreement; threaten and bully Tufton into either changing the Concession Agreement or buying Ripken Stadium; and disclaim the City’s longstanding obligation to perform Capital Maintenance on Ripken Stadium under the Concession Agreement,” the suit says. “The City’s conduct under the influence of Mayor McGrady has forced this litigation so that Tufton can protect its rights and ensure Ripken Stadium remains the safe, first-class facility that has brought so much economic benefit to Aberdeen.”

Stadium management

According to the concession agreement, Tufton would operate the IronBirds, a Baltimore Orioles affiliate that would play in Ripken Stadium, and manage the stadium for all baseball events, plus 15 additional days each year. The city would manage all nonbaseball events, except for Tufton’s 15 days.

That management arrangement would expire, according to the suit, when the city recouped its initial investment of $3 million, plus the debt service, and Tufton would assume management for all baseball events and all nonbaseball events, except for 15 days each year allotted to the City of Aberdeen.

Tufton says Aberdeen recouped its investment in 2017, and it notified the city of the recoupment date, but did not pursue oversight of the additional dates in hopes of resolving differences with the city “that ultimately proved unproductive,” according to the suit.

The city disagrees, however, and says it has not met that threshold yet, the suit says.

In the letter sent to the city last week, dated Oct. 3, Tufton said it will exercise its post-recoupment date rights, according to the concession agreement.

Debt service on the stadium per the concession agreement, according to the suit, is $4,485,415. As of the filing of the suit, the city has received $4,635,004 — $149,000 over the debt service amount.

The $4.6 million came from proceeds of the sale of about 54 acres, for $2.1 million to New Town Commercial Enterprises LLC, $347,062; admission and amusement taxes, $2,645,446; parking revenue, profit from city events and concession revenue, $682,129; and other funds received by the city, including state bond funds and hotel tax directly attributable to guests of the IronBirds, $960,367, according to the suit.

While the city had management rights for nonbaseball events, it entered into licensing agreements with Tufton that Tufton would oversee the city events and pay the city either a percentage of the gross revenue or a flat fee, according to the suit. Between 2012 and 2017, Tufton paid the city $650,000 under those arrangements.

“In 2017, the City declined to extend its licensing agreement with Tufton for the City Events after Tufton refused to renegotiate material provisions of the Concession Agreement,” according to the suit, and the city contracted with Huntley Sports Group LLC.

The city hired Huntley on a one-year contact in February; however, few nonbaseball events have taken place at the stadium since then, which Huntley’s president and some city officials have blamed on the lateness of the deal and alleged intransigence from Tufton. Huntley’s founder and CEO Athan Sunderland asked the city in July to extend the agreement through 2019.

Earlier in 2017, the city hired SMG World Wide Entertainment and Venue Management Corp. to negotiate a new license agreement with Tufton for 2018 and beyond.

“SMG’s negotiations were hostile. In one of the first sessions, SMG’s lead negotiator presented Tufton with a proposal and stated ‘We strongly encourage you to take this deal because the Mayor has a nuclear weapon he wants to throw your way if you don’t,’” according to the suit.

Aberdeen ultimately dismissed SMG and continued to negotiate the licensing agreement with Tufton, but the city demanded that extending the agreement would require Tufton to assume financial responsibility for capital maintenance.

Capital maintenance

“The city’s refusal to perform capital maintenance is jeopardizing the quality and safety of the stadium — for baseball, city events and community activities,” according to the suit.

Under the concession agreement, Tufton is responsible for year-round, noncapital maintenance, which is “all work … reasonably necessary for cleaning and routine upkeep of any property, structures, surfaces, facilities, fixtures, equipment or furnishings, or any other component of the Site, in order to preserve such items in their existing condition, ordinary wear and tear expected,” according to the suit.

The city’s responsibility — completing and financing — is for capital maintenance, “the repair or replacement of all structures, systems (including mechanical, electrical and those related to utilities, such as, but not limited to, HVAC, water, sewer and electrical) and capital improvements when needed or required to keep the Site, including the Stadium, in compliance with applicable laws, rules or regulations.”

The suit cites an example: Tufton is responsible for cutting the grass on the stadium playing field, the city is responsible for replacing the playing field.

According to an outside study commissioned by the Ripken Stadium Management Board in 2006, the field should have been replaced by 2016. It has not been done. The management board was established by the city after the stadium was built to oversee the facility’s operations and to be the de facto manager; however, a previous city administration abolished the board under the belief it was no longer necessary with Tufton being in charge of nonbaseball events, as well as the IronBirds’ use of the facility.

The study cited in the lawsuit also said the concourse walk along the first base line between the upper and lower levels of the stadium was settling and would need to be raised, ideally in 2007.

“The city has failed to commence and complete either of the aforesaid capital maintenance projects,” the suit says.

In 2016, Aberdeen hired Duffield Associates Inc. to prepare a Capital Improvement Program Report to summarize conditions and recommend capital maintenance and improvements at the stadium and the site.

The report contained a 10-year maintenance plan of 51 projects, totaling $3.2 million, according to the suit.

The items listed in the Duffield Report were also contained in a November 2017 report prepared by an Aberdeen city engineer “after a claimed visual inspection of the stadium,” according to the suit. Tufton claims the engineer never inspected the stadium, but rather used information in the 2016 Duffield Report. The 2017 report included 12 items of “concern” for the city, with costs totaling more than $400,000, and six items of “concern” for Tufton.

As of Wednesday, when the suit was filed, the city had completed one of the projects in the 2017 report — spending $10,000 on a project to rewire the parking lot.

On April 19, 2018, Tufton sent the city a letter about its refusal to comply with the capital maintenance projects that were either past due, needed to be done before the 2019 baseball season or had been performed by Tufton and were due for reimbursement (such as $14,284.62 Tufton spent to replace the safety netting at the field, as required by Minor League Baseball).

Aberdeen disputes that some of the 17 projects are its responsibility, because they are “baseball” projects, while Tufton claims there is no baseball exception to capital maintenance obligations.

In the suit, Tufton is asking the court to determine that the concession agreement between Tufton and the city be enforced and the city be required to complete and pay for the necessary capital projects within certain time frames; that Tufton has the right to renew its concession agreement, which expires Dec. 31, 2022, for another 20 years; and that the city has met its recoupment date and management of all but 15 days of the stadium revert to Tufton.

Neither Tufton or city officials had any further comment Thursday.

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