Orioles’ development deal could cost state $100m+ in lost stadium and warehouse rent

The Baltimore Sun ran a long FAQ on the Orioles‘ not-actually-a-new-lease-deal on Tuesday, covering a lot of the same ground we did here on Monday. However, there were a couple new twists:

• Absolving the Orioles owners from paying rent on the stadium in exchange for the team taking on operating and management costs — the same deal as the Ravens currently have — is hard to calculate the exact costs of, because the team’s rent currently fluctuates year to year: “The baseball team’s stadium rent is tied to a formula reflecting the team’s attendance and other factors,” writes the Sun, and between COVID and the Orioles being godawful, “the rent paid by the Orioles had been relatively low.” But with the O’s now fielding a young, winning team, they “would benefit from stopping paying rent while they are drawing larger crowds.”
• The team’s new development deal for land around Camden Yards — which pretty much just amounts to the historic B&O warehouse alongside the stadium, the air rights over Camden Station, a small parking lot to the north of the station and a small plaza between the south end of the warehouse and the stadium’s Lot A — would mean the state would no longer receive rent from the warehouse, something that currently amounts to “several million dollars a year.”

Neither of those reports is too specific about the actual numbers, so let’s see what we can find out. On the stadium rent front, Marquette University’s sports lease database reveals that the formula is indeed extremely complex, amounting to 7% of net ticket revenues, 7.5% of concession revenues (with a whole ton of exceptions, including “four and one-sixth percent (4-1/6%) of concession revenues from catering provided in the Private Suites” and “two and one-half percent (2-½%) of concession revenues from the sale of specialty novelties”), 50% of net parking revenues, 25% of net ballpark ad revenues, 10% of suite revenues, and 7.5% of club seat revenues. (Marquette doesn’t bother to define “net” of what, here.) Without a more detailed look into the O’s finances — which the Maryland Stadium Authority may have for purposes of making these calculations, feel free to file some FOIL requests, journalists out there — there’s no way to know exactly how much team owner John Angelos might save from being absolved from paying a share of revenues to the state while taking on about $3.2 million a year in maintenance and operating cost; given that the O’s paid $4.7 million in rent in 2022 even while barely drawing flies, though, Angelos’s savings are likely to be at least a few million dollars a year.

As for lost warehouse rent, the MSA financial report has that as well: The state took in $3.7 million from renting out space there in 2022, again a number that’s likely to rise in the future.

Even if we make a conservative estimate of future lost combined stadium and warehouse rent of about $7 million a year, that’s still present value of $100 million, pushing the total taxpayer price tag above $700 million. Plus we still don’t know what the development rights are actually worth that the team owners will only be paying a little under $1 million a year for, or any property tax breaks that may come with leasing the land from the state rather than owning it. It’s not impossible that this entire deal could end up costing Maryland taxpayers more than $1 billion, and it’s very likely to be close to that; enjoy having a winning team for all it’s worth, O’s fans, because the better the team is, the more this deal will end up costing you in tax dollars.