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  1. #1
    MauiRam's Avatar
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    How Rams could get out of St. Louis dome lease

    How Rams could get out of St. Louis dome lease
    BY JIM THOMAS
    ST. LOUIS POST-DISPATCH
    08/02/2009

    Proud, yet realistic, the late Sen. Thomas F. Eagleton astutely summed things up when the new $300 million Trans World Dome opened in downtown St. Louis in 1995.

    "It's state of the art," Eagleton said. Then he paused for effect and added . . . "until the next one is built." Truer words were never spoken.

    But no one not Eagleton, not Rams executive John Shaw, not the St. Louis Convention and Visitors Commission, not the 31 other NFL club owners could have predicted what would happen next.
    The Rams wouldn't have moved to St. Louis from Southern California without the existence of the TWA Dome and its lucrative lease. The franchise's move to the Midwest led to a second wave of relocation in the NFL, and sparked an unprecedented boom in stadium construction throughout the league.

    And if the Rams could move from the nation's second-largest market to a mid-level market in the Midwest, it could happen anywhere. Owners wanted to keep up with the revenue stream that a new stadium produced; cities worried about losing their team if they didn't have a new stadium.

    One new stadium after another sprung up around the league. Jerry Jones' new $1.12 billion playpen in suburban Dallas opens next month. In 2010, when the New York Giants and Jets move into a $1.6 billion stadium, 22 of the 31 other NFL teams will be playing in new or massively renovated stadiums that were built after the St. Louis dome opened in '95.

    All of this might be of only marginal interest to the Rams and to St. Louis were it not for the "first tier" provisions of the relocation and lease agreement negotiated between the Rams and the CVC in 1994 and '95. The first-tier provisions were the work of Shaw and are the envy of just about every other team owner in the NFL.

    While many St. Louis football fans fret about the impending sale of the Rams by owner Chip Rosenbloom, the first-tier provisions in the stadium lease are just as ominous. In a doomsday scenario, if the Rams and the CVC can't reach agreement on first-tier requirements, the Rams could be free to leave St. Louis after the 2014 season.

    So what are the first-tier provisions and the mechanisms that could lead to the departure of the Rams? The Post-Dispatch

    obtained a copy of the 1,700-page lease and relocation agreement from the CVC and with the help of a local attorney sorted out the first-tier language.

    The lease requires that the dome now known as the Edward Jones Dome be considered among the top 25 percent of stadiums (or top eight buildings) in the NFL.

    The dome was to be "measured" for first-tier status every 10 years by March 1, 2005, and March 1, 2015, although the '05 measurement didn't really take place.

    So how do you measure first-tier status?

    The lease language on this topic is exhaustive but, at the same time, vague. No less than 15 first-tier components are listed, everything from luxury boxes to club seats, lighting to scoreboards. ... regular stadium seating, concession areas, common areas (such as concourses and restrooms), electronic and telecommunications equipment, the playing surface, and the locker and training rooms.

    One of the 15 components is simply "physical structure of the facilities."

    How do you measure that?

    It should be noted that with a couple of exceptions, none of the provisions for luxury boxes, club seats, or stadium seats deals with the number of seats or suites. It's not as if the 66,000-seat dome suddenly has to be converted to 75,000 seats, or 130 suites, or 10,000 club seats, to meet first-tier standards.

    But are the seats cushioned? Are they 6 inches wider with more leg space in first-tier stadiums? Are the concourses wider? The lighting better? The scoreboards more high tech? These are areas that can be measured.

    If the CVC, which runs the dome, were held to strict first-tier standards, how much would it take for the stadium to become a top eight facility by 2015?

    "Massive amounts of money," said a longtime NFL team executive, speaking on the condition of anonymity. "I'd say 10 to 20 times what they're putting into the dome right now."

    That was a reference to the $30 million in improvements which include new scoreboards that have been added to the stadium this offseason. So using the executive's math, we're talking about $300 million to $600 million. Those are tough numbers, maybe impossible numbers, in the current economy.

    Twice postponed, the 2005 "measurement" for first-tier status never took place. The $30 million in improvements was a compromise of sorts, in no way regarded as meeting first-tier requirements.

    The next scheduled deadline for first-tier status is March 1, 2015. But the process that could lead to the Rams getting out of the lease and potentially relocating starts much sooner in just 2 years:

    On or before Feb. 1, 2012, the CVC must deliver a preliminary plan for first-tier improvements. The overall plan must include a financial plan, as well as the source of those funds.

    The Rams then have until March 1, 2012, to notify the CVC if they approve or disapprove of those plans.

    At that point, the Rams have until May 1, 2012, to submit an alternate plan, with the CVC then given until June 1, 2012, to accept or reject the Rams' alternate plan.

    If the CVC rejects the Rams' alternate plan, the matter goes to arbitration on June 15, 2012. The arbitration must be completed by the end of 2012.

    If the CVC agrees with the arbitrator's decision, the stadium gets its renovations and there's a happy ending. But what if the CVC simply can't afford the renovations called for by the arbitrator?

    If that's the case, the lease states: "The Rams shall be entitled to negotiate and execute a lease with any person or entity and to relocate from the (dome) after the 2015 First Tier Measuring Date." In other words, after March 1, 2015.

    The stadium lease would then convert to a year-to-year lease, with the Rams free to move after the 2014 season.


  2. #2
    jmk321's Avatar
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    Re: How Rams could get out of St. Louis dome lease

    I feel bad for the lawyer that had to read the 1,700 page lease agreement.

  3. #3
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    Re: How Rams could get out of St. Louis dome lease

    Quote Originally Posted by jmk321 View Post
    I feel bad for the lawyer that had to read the 1,700 page lease agreement.
    Isn't that what they signed on for?
    RnD

    GO RAMS!!

  4. #4
    tomahawk247's Avatar
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    Re: How Rams could get out of St. Louis dome lease

    I doubt the lawyer was doing it for free, so he probably picked up at least $1000 in fees just for the time it took to read it

  5. #5
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    Re: How Rams could get out of St. Louis dome lease

    Quote Originally Posted by tomahawk247 View Post
    I doubt the lawyer was doing it for free, so he probably picked up at least $1000 in fees just for the time it took to read it
    I'm guessing you are significantly below the reality in your estimate. A phone call is $100.

    I don't know why people hang onto the idea that the Rams and this lease mean much. When the Rams came everyone knew the lease wasn't a long term binding agreement. The reality is that it gives the Rams the ability to break the lease and write up a new one. Instead of building a new $800 million stadium, they will just give the Rams a larger guaranteed profit. Now it's $20 million, it would be cheaper to boost that to $30 million and waive all lease payments. Poof, it might cost St. Louis $8 million per year but the interest on a new dome would be far higher than that.

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    KoaKoi is offline Registered User
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    Re: How Rams could get out of St. Louis dome lease

    the lawyer didn't have to read all 1700 pages. just the stuff re 1st tier. But $1000 still won't get you very far... that's maybe 3-5 billable hours worth of fees. Having seen what some of the big commercial leases look like, I doubt that'd be enough time to prep a synopsis for the newspaper. Not sure how many pages it was, but I'd have probably charged a full day's worth (8 hours). multiply that by whatever rate the legal minds in st. louis charge and that'd be a bit closer to the actual.

    now if the paper had hired a law firm to do it, instead of a solo, foggetaboutit

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