September 11, 2013

Civic Center: Pirates 'manufactured' lease crisis

On the eve of the bid for a resolution, trustees file a response to the Portland team’s claims on a lease’s validity.

By Edward D. Murphy emurphy@pressherald.com
Staff Writer

PORTLAND — Lawyers for the Portland Pirates and the Cumberland County Civic Center will face off in court Wednesday morning over whether a valid lease exists for the hockey team to play in the arena this winter.

click image to enlarge

Neal Pratt, chairman of the Cumberland County Civic Center trustees, in a 2013 file photo. The civic center and Portland Pirates have begun firing salvos in court at each other, as the two sides struggle to reach a new lease agreement.

Gordon Chibroski / Staff Photographer

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In this 2011 file photo, Portland Pirates CEO Brian Petrovek announces the Phoenix Coyotes as the Portland Pirates' new parent club at the Cumberland County Civic Center.

Tim Greenway

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The two sides will appear in Cumberland County Business Court to seek an agreement in the Pirates' request for an injunction to force the civic center to let the team play there once a $34 million renovation of the building is completed in January.

The Pirates sued the civic center last week, claiming that a five-year lease agreement that the two sides announced in April is valid.

In a response filed in court Tuesday, the civic center's board of trustees said the two sides agreed only on the broad outlines of a lease in April, and that the board explicitly said more negotiations were needed.

The trustees' response also says that no documents were signed, and that a resolution passed by the board at the time said a final agreement would be subject to another vote by the trustees.

"The Pirates made a legal and tactical decision in the negotiating process that they do not now like the consequences of," the trustees say in the response. "The Pirates have manufactured this 'crisis.'"

The Pirates contend that the agreement announced in April constitutes a valid lease. The civic center responded that that is "demonstrably false," citing emails and lease proposals that were exchanged throughout the summer as evidence that the deal was not final in April.

Courts don't recognize "agreements to agree," the trustees say in the filing, and the civic center should not be required "to perform under the terms of an alleged lease agreement that was never reached."

The filing says that hours after the board approved a resolution outlining the "bullet points" of the deal in April, the managing owner of the Pirates appeared to suggest that he knew the terms weren't complete.

The board passed a resolution on the major points of the agreement April 17. A few hours later, Brian Petrovek, the Pirates' managing owner, said in an email that he planned to begin selling season tickets for 2013-14, "but understand the deal needs to be finalized and signed accordingly in the near future."

Petrovek did not return calls for comment Tuesday. Harold J. Friedman, the lawyer for the Pirates, and Dave Barry, who is handling the lawsuit for the civic center, declined to comment.

Jamie Schwartz, the civic center trustees' lawyer, responded to Petrovek's email, saying that Petrovek could use his own judgment about the two sides' ability to reach the final agreement, and that any steps Petrovek took would be "at your and the Pirates' sole risk."

The loose ends that remained after the announcement in April unraveled further, and the two sides exchanged lease proposals regularly throughout the summer. The civic center sent Petrovek a final offer on Aug. 27 and said he had to sign the lease within 48 hours.

Neither Schwartz nor Neal Pratt, the chairman of the civic center's trustees, returned calls for comment Tuesday.

At issue is revenue from concessions and advertising.

The deal in April called for the Pirates to get 57.5 percent of all concession revenue, but the civic center was told by state authorities in June that the Pirates couldn't share revenue from alcoholic beverages because the team is not on the arena's liquor license.

Under the previous lease, the team received no revenue from concessions.

The civic center later offered 65 percent of the revenue from sales of food and non-alcoholic beverages. Petrovek rejected it, saying it would not make up for the lost revenue from alcohol sales.

According to the civic center's figures for 2012-13, the 65 percent formula means significantly less money for the Pirates.

Based on those figures, the Pirates would have gotten about $10,000 per game under the formula that covered all concession sales.

Under the 65 percent formula, including only food and non-alcoholic beverages, the Pirates would get less than $6,600 a game.

In the papers filed Tuesday, the civic center's lawyer called the proposals "equivalent."

The two sides also are at odds over advertising revenue, specifically from "sub-naming" rights for portions of the civic center, such as the ice and luxury suites.

The Pirates claim the deal's provision to give the team half of the "above-the-ice" advertising revenue includes money for the sub-naming rights. The civic center contends the revenue from those and other naming rights belongs to the civic center exclusively.

It's unclear how much money is at stake in that part of the dispute. The civic center has not sold sub-naming rights in the past.

Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald.com

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