Phone lines hummed between St. Louis, New York City, and Memphis on Monday night after the Memphis City Council entered a counter offer on AutoZone Park that was $7.5 million lower than the original asking price.
The counter offer sparked a round of new negotiations between the St. Louis Cardinals (who want to buy the Memphis Redbirds), Fundamental Advisors (the New York-based private equity firm that owns the debt on the park), and city officials who asked the council for $25 million to buy the park.
Council members said they'd take up the purchase issue again during their next meeting on Tuesday, December 17th. Mayor A C Wharton said after Monday's council vote he'd be in contact with the deal's stakeholders no later than Tuesday morning to plot a course forward.
"I cannot speak for the Cardinals or for Fundamental Advisors, but we're going to give it our best shot," Wharton said. "Again, they're big boys, and they have to make their decisions, but we believe it's a good deal, and we're going to keep pushing."
The original deal asked the city to issue $25 million in debt — about $20 million to buy the park and about $5 million to improve the park. The council's counter offer reduced the purchase price to $15 million and the funds for park improvements to $2.5 million. Also, any excess city funds generated at the park would go exclusively to stadium improvements, up to $2.5 million.
The terms of the new deal came from council member Jim Strickland, who said his plan saves $600,000 per year in debt payments. And doing that, he said, would protect taxpayers from ever paying for the park directly out of the city budget.
"The resolution they want you to vote on says they expect to go in the city coffers every year to pay for it," Strickland said. "The taxpayers are at risk."
Before the council approved the counter offer, they were presented an offer from the team of stakeholders who hope to get the deal done by year's end. That new deal shaved $500,000 off the original asking price of $20 million and $500,000 off the $5 million request for capital improvements.
The original deal included $100,000 in financial backstops from the Cardinals to meet any gaps in the revenue projections to help the city pay the debt. The new deal brought to council included an additional backstop of $100,000 from AutoZone Corp.
But with all the assurances that the city wouldn't have to pay for losses, council member Lee Harris questioned who would make money from the deal.
"The largest investor in this deal is the city of Memphis, but no part of this conversation is about how the city expects to make a profit off the deal," Harris said. "At best, we're trying to avoid loss."
Many council members expressed a desire Monday to get the deal done. Janis Fullilove said she was "excited at the thought of this project." But some expressed frustration with the mayor and his team for the way the deal was presented to them.
"[Last] Tuesday, less than an hour before the vote, we got this ream of information [filled with] leases, bond issues, and term sheets, and you honestly expected that we would do it again and vote for this," Conrad said, dropping a heavy binder filled with the purchase details. "I think the arrogance is offensive. It shows a lack of respect, and it's hurting our city."