Alderman Meyer posted the details of the agreement that is being discussed with the new potential owners of the Swing over at SoLo. Hopefully this wasn't confidential information, but I guess it certainly isn't anymore...
I'll summarize it in a couple words: Its crap.
Here's the important section:
"...Our anticipated proposal will have a net acquisition cost to RBI of approximately $7 million... While we are willing to pay top market for the franchise and assets, we cannot layer on top of that the nearly $4.5 million in lease obligations presently imposed by the agreements in place between the Club and the City. So, as we discussed 10 days ago, we cannot overpay 7th Inning Stretch for the assets and franchise it currently holds, nor can we commit to the City to retire a heavy debt burden going forward.
Instead, we will propose that the all existing debt be retired, save for $1 million that would be restructured as payments going forward under a new lease.
Basically the reason the team can't make money is because the city is mean and making them actually pay for having a shiny new stadium. I'm sure that's true, but that was part of the deal they signed up for.
The question I have, is whether the debt is truly retired, and is entirely dumped on the taxpayers, or whether Kevin would have to pay it off out of the 7 mil that he'd get from the new owners. He had better have to.
If Kevin Krause ends up sitting around with millions of dollars in his bank account while the city eats the renovation costs, I might just stop liking Mr. Malin. This is Kevin's failure, not the city's, so until he moves into a $75,000 (or less) house and has no savings, I'd say he still owes the city money.
My initial reaction is that the city should turn this deal down, unless the renovation costs are paid for out of the $7 million price tag. This is a bad deal for Kevin, as he wouldn't get the money back he put into the team, but that's what happens when you fail at something.
"Baseball was made for kids, and grown-ups only screw it up." ~Bob Lemon
14 comments:
I'd certainly be for that deal...
I wonder if I'd get any response if I ask Malin about the details of this, considering that they haven't been too forthcoming with details yet.
That is not the way I read it. I think the new owners are asking that the taxpayers forgive a ton of debt. More importantly, the taxpayers have to take 1 million that they are owed at 0% interest for 20 years! Boy, I wish my bank would give me that kind of deal.
Next, the taxpayers really pound dirt on the rent. Right now, we get 140k per year, and that goes down to a lousy 16k per year. So, the taxpayers lose $2,480,000.00 over the term of the lease!!! Plus, we pick up all kinds of maintenance expense that Krause pays right now. Finally, we do have Krause on the hook and he has a Daddy that is one of the wealthiest men in the state, so we will be getting paid everything due us right now. Why would we take this deal?? What is in it for us?
I believe it was 16k per quarter, but that's still cheap rent.
There's no upside for the city if all but a million of the debt is totally forgiven, whereas the cheap rent is more than averaged out by having the renovations paid off out of Kevin's sale price, if that's the case.
Time will tell.
If these people can turn it around with bigger crowds, and the year round part sounds like maybe a concert venue, then does't the city make money on sales tax? If nothing else local business would pick up after a game. These guys seem more organized than the city leaders.
Krause seemed a lot better than Holtzman too, and look at us now.
Rent would be 16K per season!
You're right, it was the $1 million in renovation payment that would be in quarterly installments.
$16,500 a year for a baseball stadium... it doesn't take very many market rate apartments in this building to equal that number. Like 2.
First of all, this is a classic case of the taxpayers being asked to take "stupid" pills. We get $140k + per year now, and Krause WILL pay what he owes us in repairs. We might have to take him to court, but he will pay, and he will get the hint once we start playing tough. Why in the world would we EVER go from 140k per year down to 16k per year AND agree to take on utility expenses and garbage clean up on top of all that? What the hell is in it for us? It is not like we can't get Krause to pay. He is just being cagey with us to see what he can get away with. I guarantee you, once we force the issue, the man will pay up. Can you say Krause has deep pockets?
Finally, the worse thing that could happen is that Krause does not pay and we get a judgment against him and kick him out, at the same time placing a UCC lien on everything he has. I would eat my shirt if that happened; I am that sure that Krause will pay up! But if it did happen, after I finished my shirt eating stunt, we would have a nice new stadium to sell along with a UCC lien on the Swing's assets and the naming rights etc. We would certainly not end up any worse off than the deal being proposed right now, but my guess is that we would be much better off. All this is needless speculation anyway; just get tough and watch how fast Krause pays. Bottom line: If it ain't broken, don't fix it.
Thanks to the "Attorney" for the explanation. Now here's hoping that everyone else who feels as though they are experts on contract law-inlcuding media outlets!-will take a good remedial reading course at Scott. My goodness, I've never seen such a load of non-critical reading skills since substitute teaching 3rd grade. Also-no comments on Gartner's partners? Does one name in particular look familiar? Why do you think City folks are wetting their pants and talking to the media as if it's already a done deal? It's not just Gartner's juice. By the way-Gartner looked for a sweetheart baseball deal in Dubuque last year and couldn't get the giveaways he wanted.
"Does one name in particular look familiar?"
Who are you talking about??
Ever been to a surgeon named mike.
Ah, thanks to the 3rd grade subsitute teacher! We all know we should take that advice over somebody with a law degree.
To 9:58 AM- check the spelling, it is NOT the heart doctor that practices in Davenport.
You wonder why city leaders are spreading their arms on this deal. If I am not mistaken, Mr. Gartner played a critical role in the Vision Iowa grant process.
I have respect for the man for returning to the Midwest for his golden years, and do not seriously question his integrity. I am sure he is putting his best proposal as take it or leave it.
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