September 7, 2013

Portland Pirates sue Civic Center over lease dispute

The lawsuit further chills relations between the local hockey team and the arena's officials.

By Jessica Hall jhall@pressherald.com
Staff Writer

PORTLAND — The Portland Pirates on Friday filed a lawsuit against the Cumberland County Civic Center after both sides faced off over a disputed five-year lease agreement for the hockey team.

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Brian Petrovek, managing owner of the Portland Pirates, listens at a press conference at Verrill Dana LLC in Portland on Friday, Sept. 6, 2013.

Jill Brady / Staff Photographer

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In this 2010 file photo, Dan Bailey of Yarmouth waves the Jolly Roger during a game between the Portland Pirates and Manchester Monarchs at the Cumberland County Civic Center. The Cumberland County Civic Center's trustees and the owner of the Portland Pirates are headed to court after failing to reach an agreement on a lease that would keep the American Hockey League team playing at the arena for at least five more years.

Gregory Rec / Staff Photographer

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Pirates officials said the two sides disagreed over revenue sharing for concession sales and advertising revenue. Civic center officials, however, said the scope of the disagreements was much more broad and included issues such as whether the team could have a say in the management of the arena.

The lawsuit, filed in Superior Court, escalated the already tense relationship between the civic center and its main tenant. In 2010, during long and contentious lease negotiations, the team threatened to leave for Albany, N.Y., before ultimately signing an extension in Portland.

The lawsuit was filed "to get the home ice back for the Pirates, its fans and the public," said Harold Friedman, an attorney with Verrill Dana LLP in Portland who is representing the Pirates.

In the lawsuit, the team seeks to prevent the arena from breaking an unsigned, one-page resolution reached in April that called for the team to share in concession sales and advertising revenue for the first time.

The Pirates, who began playing in 1993, also said they wanted a preliminary injunction to prevent the civic center from giving away dates slated for home hockey games in the 2013-2014 season. The American Hockey League team is starting its season in Lewiston's Colisee until a planned $34 million renovation of the civic center is completed in January.

The civic center said that the April agreement was only a framework for final negotiations and that any formal agreement must be approved by the board of trustees. The Pirates, meanwhile, asserted in the suit that the unsigned agreement is enforceable.

When asked on Friday whether the April 17 agreement had been signed by both parties, Friedman did not answer directly. He said only that the pact was "legally an enforceable agreement."

"It is clear that the parties reached a binding agreement. The civic center's unjustified refusal to acknowledge those terms, and its insistence that the Pirates execute a written document that contained terms materially at odds with the parties' agreement, is a patent and material breach of contract," the Pirates assert in the suit.

The Pirates have asked the court for an expedited hearing to consider the case. Friedman said the Pirates requested court action by Sept. 13.

Neal Pratt, chairman of the civic center trustees, disputes the idea that the agreement is legally binding.

"If we had an 'agreement' back in April, what have we been negotiating over for the past five months?" he asked. "The resolution authorized continued good-faith negotiations with the Pirates with the goal of reaching a final agreement."

At issue is what share of concessions and advertising revenue the Pirates are due. In the April resolution, the two sides tentatively agreed that the Pirates would get 57.5 percent of net food and beverage sales, something that Pirates managing owner Brian Petrovek had sought for years. Under the previous lease, the Pirates received no revenue from concessions.

The 57.5 percent would have worked out to about $8,000 a game, under a formula that assumed 3,250 fans spending $9 each and subtracted the cost of concessions, food preparation and state sales tax, Petrovek said earlier this week. He appeared at the news conference Friday that was called to discuss the lawsuit, but did not speak or answer questions.

Civic center officials dispute the Pirates' financial claims about the value of the initial revenue-sharing pact but did not provide an alternative figure.

"Our analysis disagreed completely with their analysis," Pratt said. "All we can do is crunch our own numbers and be responsible to the taxpayers."

The Portland Press Herald has filed a Freedom of Access request for concession revenue from previous years, which the civic center would not provide.

One issue with the April agreement centered on the team's proposed share of liquor revenue. State liquor officials said that, under state law, the Pirates couldn't share the revenue from alcoholic beverages because the team is not the liquor licensee.

After further negotiations, the trustees last month gave the Pirates an alternative arrangement in a final, 33-page lease offer that included 65 percent of food and non-alcoholic beverage sales. Petrovek rejected that offer, saying the 65 percent would not offset the team's loss of alcohol sales, which he said could exceed the total revenue from food sales.

Under other terms of the proposed contract, the Pirates were slated to get revenue from selling some of the on-ice space and splitting advertising sales from most of the rest of the arena.

The Pirates would pay the civic center $1,000 a game, instead of the $2,500 they paid previously. Under the previous lease, the Pirates received a $2,000-per-game rebate because of projected operating losses for each game.

The new lease also would cap at $6,000 the amount the team needs to pay civic center workers on game nights.

Pratt said that instead of acknowledging the civic center's offer, the team sent the trustees a series of proposed changes to the lease contract.

The civic center then set a deadline of Aug. 29 for the team to sign the contract. The team did not sign the lease.

The board held a meeting on Wednesday and made another effort to reach out to the team, giving it until 5 p.m. Friday to sign the final offer, Pratt said. Instead, the Pirates filed the lawsuit Friday afternoon.

"I find this whole situation very disappointing. It gives one a sense of desperation on the team's part. They may be trying to leverage the public opinion to get us back at the negotiating table," Pratt said. "This isn't just about money. The Pirates are trying to frame this as being about one issue and it's not. The Pirates wanted to have influence over management over the civic center. There were issues over the merchandising and locker rooms -- it's not just about one final issue."

If the Pirates fail to resolve its dispute with the civic center, playing the entire season in Lewiston is an option, Friedman said.

The Lewiston Colisee did not immediately return calls seeking comment.

"The team is prepared to do what is has to survive. The first choice is to get the home ice advantage in Portland at the civic center," Friedman said.

In order for the Pirates to get a preliminary injunction from the court, the team must establish the likelihood of the success of its arguments. It also must establish that it will suffer irreparable harm and that its injury outweighs any harm to the civic center.

The Pirates also have to answer to the American Hockey League, Friedman said. The Pirates gave dates to the league to schedule games based on the expectation that the team would be playing at the civic center, Friedman said.

"There are great concerns by the AHL on where they'll be playing," Friedman said.

The Pirates' National Hockey League affiliate, the Phoenix Coyotes, also has "grave concerns" about whether the Portland team will be in its home arena, Friedman said.

"If the Pirates are unable to return to their home ice after the renovations are done, there is a very real possibility that the Coyotes will terminate its relationship with the Pirates," the Pirates asserted in the lawsuit. "The Pirates would then be unable to stay in business."

Neither the AHL nor the Phoenix Coyotes returned calls seeking comment on Friday.

The Portland Pirates began playing at the civic center as a member of the American Hockey League during the 1993-94 season. The team was an affiliate of the Washington Capitals of the National Hockey League and in that first season won the Calder Cup, its first and only league championship.

Jessica Hall can be contacted at 791-6316 or at:

jhall@pressherald.com

 

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Additional Photos

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Harold Friedman, second from right, of Verrill Dana LLP in Portland gives a news conference regarding a Portland Pirates lawsuit Friday. Joining Friedman are, from far left, Brett Leland and John Giffume, also with Verrill Dana, and John Petrovek, far right, part-owner of the Portland Pirates.

Jill Brady / Staff Photographer

  


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Today's poll: Pirates

Do you agree with the Portland Pirates decision to sue the Cumberland County Civic Center?

Yes

No

View Results