Goldeyes owner eyes new stadium lease pitch from city By: Aldo Santin Posted: 11:58 AM CDT Monday, Oct. 28, 2019 Last Modified: 5:43 PM CDT Monday, Oct. 28, 2019 Updates

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This article was published 27/10/2019 (1840 days ago), so information in it may no longer be current.

After threatening to play hardball in negotiations with former Winnipeg mayor Sam Katz over the renewal of the lease on the Shaw Park site, a council committee has opted to throw a change-up.

However, it’s uncertain if the Winnipeg Goldeyes owner will take a swing and accept the latest offer, or use it as a starting point for further concessions.

“We’ll start doing some number-crunching and see what makes sense, and whether it works or not,” Katz told reporters Monday.

Councillors on the property and development committee dramatically moved key city hall negotiating positions: reducing the administration’s proposed annual lease rate to $50,000 from $150,000 (based on $10,000 per month on a five-month independent league baseball season) and asking for a 10 per cent share of revenues from two nearby city-owned parking lots (instead of the original position of reclaiming both).

The committee instructed the administration to resume negotiations with Katz using the new terms as a starting point, with a status report due in 120 days or sooner, if the situation warrants.

The City of Winnipeg owns the property the ballpark was built on. Council agreed to in 1998 to give Katz a 25-year lease (which expires in 2023) in exchange for payments of $1 per year, with the baseball team paying property and business taxes, and utility and maintenance costs. (Katz was mayor of Winnipeg from 2004 to 2014.)

Council has a policy that leases with for-profit organizations and businesses should be based on market values. The land is considered prime real estate — in the heart of downtown, adjacent to the Red River — and would be worth considerably more than $1 annually, if developed for commercial purposes.

The lease is held by Riverside Park Management, a non-profit holding company set up by Katz in 1997, which, in turn, sublets the property to the Goldeyes minor-pro baseball team.

The administration had also proposed to take back control of two city-owned parking lots (that generate about $375,000 in annual revenue for the Goldeyes) included in the original lease, end the rebate on entertainment tax revenue collected for every ticket, and ensure all team sponsorship revenue for the facility is redirected to city coffers.

Katz said the team needs a long-term lease on the park to be able to secure financing for an updated scoreboard/video screen and other on-field improvements.

He told the councillors the original terms would have driven the Goldeyes out of the ballpark: “If you want us out of business, just tell us that. I’m a big boy.”

In the end, the committee directed the administration to maintain the existing entertainment tax rebate, end any attempt to redirect sponsorship funds, and maintain the same arrangement for the payment of business and property taxes.

The compromise terms had been proposed by Coun. Kevin Klein and supported in a 3-1 vote, by Couns. Janice Lukes and Brian Mayes.

Coun. Sherri Rollins said she couldn’t support the terms, explaining the committee had not provided an explanation as to why it would settle for a set of terms so divergent from the administration’s position.

“I think we owe taxpayers an explanation on what they’re buying with this financial package, which is now richer than the framework that was in the administrative report,” Rollins said.

Mayes and Klein said they didn’t want the lease negotiations to force Katz to fold the ball team, which would leave the city to operate the stadium with little likelihood of finding a replacement tenant.

While city officials insisted the site is more valuable as a development property without the ballpark, Klein said any profit would be offset with demolition costs and an environmental cleanup (the land had formerly been a Winnipeg Hydro works yards and unofficial dump site).

“I don’t think it’s a bad trade to say we’d like to keep (the ball team) going,” Mayes said. “Maybe in 20 years we’ll need the land, but we don’t right now.”

In addressing the committee, Katz brought along a package of cancelled cheques, which he said show he’s paid $5.116 million in property and business taxes since the ballpark opened in 1999.

Katz said he understood the city’s desire to change the terms for a new lease, but argued it had to be fair to the team that has been its tenant for 20 years, and should be comparable to what had been negotiated between other minor-league teams and their local municipality.

“You go into business, you take a risk,” Katz told reporters. “Sometimes you win, sometimes you lose. The key thing is to make sure you win more than you lose, that way you can be successful.”

Katz said his only objective is to arrive at an economic deal that ensures the team remains financially viable for the time when his now-seven-year-old son might want to take over the team.

“Hopefully, we’ll be able to move this forward,” Katz said. “The committee was trying to come up with a balancing act of what they thought would be fair and reasonable, which is exactly what we were looking at.”

aldo.santin@freepress.mb.ca