A new rent agreement between North Little Rock and the Arkansas Travelers Baseball Club Inc. needed Mayor Joe Smith’s vote Monday night to gain approval after some City Council members balked over one specific change.
The new agreement outlines a $230,000 annual rent payment over the next 10 years for the Travelers to lease the city-owned Dickey-Stephens Park.
The rent will pay off a refinanced loan note to cover a $6 million construction overrun for the $40.4 million ballpark, which opened in 2007, and relieve North Little Rock from using any city funds to pay that debt. Tax revenue, the donated land and private contributions contributed to the ballpark’s construction.
Smith took the proposal to the council after working out details with Russ Meeks, the president of the baseball club. The agreement, which was announced two weeks ago, does away with the original formula for the Travelers to pay rent based on the team’s net revenue each season.
Smith had to vote to pass the legislation when Aldermen Debi Ross, Beth White and Linda Robinson voted no and Maurice Taylor abstained. The mayor’s vote is needed only in cases to obtain the necessary fifth vote for approval.
The hang-up was over a change to allow the Travelers the authority to make “discretionary capital improvements,” a rewording of the original lease agreement from 2007. Taylor and Robinson said they weren’t comfortable with such changes because they didn’t have a copy of the original agreement.
Ross made a motion to amend the proposal to delete the new wording regarding discretionary capital improvements and also to delete the similar section of the original agreement. The original lease required the city and the team to agree on such improvements, except when the improvements don’t exceed 75 percent of the basic rent paid by the team. In those cases, the team could use its sole discretion.
Ross’ amendment failed 4-3, with Taylor abstaining.Aldermen Steve Baxter, Bruce Foutch, Charlie Hight and Murry Witcher voted against the amendment. With the discretionary clause remaining in the new rent agreement, the vote was 4-3 to approve it, with Smith then adding the fifth, needed yes vote.
“I’d hate to see any changes be made without the approval of the landlord,” Ross said before the vote, adding that the city’s taxpayers are the landlords because the city used tax revenue to build the ballpark.
The city built Dickey-Stephens Park using the greater part of the revenue from a 1 percent, voter-approved city sales tax that lasted two years and expired in September 2007.
“I just want to make sure we keep the integrity of the ballpark,” Ross said.
Taylor said he needed to see the original lease agreement “if we’re going to delete entire sections.”
Robinson agreed, saying that being able to compare the suggested changes against the original lease would allow the council to “make an intelligent vote here.”
Smith offered to hold the legislation for one more meeting to give aldermen time for such a review.
“These guys are our partners,” Smith said, referring to the Travelers’ organization. “If y’all want to study a 40-page contract from seven years back, I don’t have a problem with it.”
Other aldermen, though, said it was unnecessary to wait.
“We don’t need to be overseeing every capital improvement they make,” Witcher said, speaking against Ross’ amendment. “It doesn’t make sense for us to be involved with their day-to-day operations.”
Foutch agreed, saying that the Travelers were “going to be doing what’s best for the team and the ballpark.”
North Little Rock’s Public Building Authority, which owns the ballpark, plans to refinance the $1.85 million balance left on a 2011 loan and has asked for bid proposals for the lowest interest rate. The refinancing will set a fixed payment for the Travelers, starting next year. The city will then use that money to pay on the 10-year note.
After the 10 years, The Travelers will pay the city $115,000 annually for two years to cover the remaining 12 years left on the ballpark lease. The original lease agreement required the baseball club to pay a “basic rent” and an “additional rent” to the city that would pay off the construction debt, but the team wasn’t responsible for any interest or fees on the loans taken out by the city to cover the overrun.
Arkansas, Pages 11 on 04/15/2014