Maryland approves Ravens lease extension in exchange for $600m in renovation cash, details still hazier than one would like when $600m is at stake

As expected, the Maryland Board of Public Works — aka outgoing governor Larry Hogan, outgoing comptroller Peter Franchot, and treasurer Dereck Davis — voted unanimously yesterday to approve a 15-year lease extension for the Baltimore Ravens under which the team will continue to pay no rent, and will get access to a $600 million–plus state fund for stadium upgrades. When news of this first emerged earlier this week, we asked exactly how the Ravens would be allowed to tap that slush fund, whether they could use it to offset their maintenance and operating costs, and what this would mean for the owners of the Orioles, who are seeking their own lease extension and similarly sized slush fund, among other things. So let’s take a look at the actual meeting minutes and see what they say:

The General Assembly passed House Bill 896 (enacted as Chapter 60, Acts of 2022) which among other things, increased the [Maryland Stadium] Authority’s bond issuing authority for sports facilities at Camden Yards to $1.2 billion, to be evenly split between the baseball and football stadiums and facilities directly related to the use or operation of each. The new law requires the Comptroller to distribute up to $90 million annually to the Authority for payment of debt service on bonds for the stadiums (up to $45 million per year for debt service for each stadium).

Okay, most of this we knew: The state already approved the extra $600 million apiece for the Ravens and the Orioles. If the annual payments from the state are capped at $90 million, that would seem to limit the size of the slush funds — which otherwise can be replenished with new bond sales as the old ones are paid down — but then, the MSA has other money on hand, so maybe it actually wouldn’t.

Amended § 10-644 of the Economic Development Article of the Code requires as a condition precedent to issuing bonds for either stadium, that the Authority shall have negotiated a lease or a renewal or extension of a lease, approved by the Board of Public Works, that will not terminate prior to the maturity date or payoff of any bonds issued for the stadium.

Aka “nobody gets any money until they sign a lease extension.”

In no event shall the term expire before the maturity date of any bonds issued.

So, all of the stadium bonds will need to be short-term ones, no longer than 15 years, and likely a good bit less if the Ravens owners don’t decide on $600 million in renovations immediately? Or the Ravens will be tied to Baltimore for longer if the MSA decides to sell longer-term bonds? This language is not entirely helpful, and since the minutes don’t include the actual lease language, it’s hard to say for sure what this means.

Capital works projects that will be eligible for use of bond proceeds are described.

Funds for emergency repairs and certain capital works at the stadium are established, with required contributions specified.

Likewise, these would be good descriptions to actually include in the minutes, not just point to with a “see other document not included.” In particular, it would be nice to know who will be contributing what to the “funds for emergency repairs,” since repairs are one of the few things that the Ravens ownership are normally required by their lease to pay for.

The Ravens may not relocate. In the event of a relocation default, the Authority shall have the right to pursue all legal remedies, including but not limited to recovery of liquidated damages tied to the amount of any outstanding bonds.

That second sentence does not, in fact, mean “the Ravens may not relocate,” but rather “if the Ravens move in the next 15 years, they’ll have to at least repay the remaining bond debt.” That sounds like a big penalty now, but if the team wants to move in, say, year 13 or 14 — or just threaten to in order to get more public money — covering a couple of years of bond payments isn’t likely to be a huge obstacle.

I’ve reached out to the MSA to see if it’s possible to get the actual lease language, and will report back here if it turns up and answers any of these burning questions. I’m also going to be on Baltimore’s WNST today at 10 am ET, if you feel like tuning in to hear us discuss the known unknowns.

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One comment on “Maryland approves Ravens lease extension in exchange for $600m in renovation cash, details still hazier than one would like when $600m is at stake

  1. I just asked the MSA for the lease language and received a reply that said “This email acknowledges receipt of your public information act request.” So this could take a minute.

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