The Billings City Council approved a Ballpark Management, Operation & Use Agreement with the Billings Pioneer Baseball Club, doing business as the Billings Mustangs, in 2008, as what became Dehler Park was preparing to open.  The contract is due to expire on Dec. 31, 2017, with options for the ball club to extend it for additional 10-year periods.  The Mustangs organization was purchased in 2014 by Main Street Baseball, LLC., and the new owners asked to renegotiate the contract in late 2015, leading to extensive contract negotiations.  The attached contract was edited slightly by the Billings Parks, Recreation and Cemetery Board on Nov. 16, 2016, and recommended by a 4-1 vote to the City Council for approval.

The proposed agreement differs from its predecessor in the following, significant ways:
1)  Gives Main Street Baseball the opportunity to sell naming rights to the field. They may also sell scoreboard advertising and ballpark naming right when the current agreements expire. The City of Billings Ballpark Permanent Fund will receive 15% of the net revenue from the sales to enhance or replace the score board in the case of the scoreboard revenue, and to provide major maintenance to the ball park in the case of the field and park naming rights.
2)  Increases the ball club's fixed rental payment from $30,000 to $60,000 annually.  The rent will be deposited in the City of Billings Ballpark Permanent Fund to offset capital repairs of more than $25,000 that will be needed at the ball park as it ages.  Expenditures from the permanent fund will continue to be approved by the City Council upon the recommendation of a Facility Review Committee consisting of one representative each from the City Parks Department, the Parks Board and the Ball Club.
3)  Creates a $30,000, City-funded maintenance account, combined with a $5,000 Ball Club account, to handle non-capital repairs.  The agreement authorizes the City Administrator or the Administrator's designee to authorize such repairs in keeping with the City's Purchasing Policies and Procedures.
4)  Authorizes the Ball Club, at its own expense, to make improvements including an enclosed, glass Great Room; a children's play area with zip line; seating, service and concession area upgrades;  and additional improvements recommended by the Facility Review Committee and approved by the City Council.   
5)  Ensures the Ball Club will play in Dehler Park for the duration of the contract, as long as the park meets Minor League Baseball Facility Standards, and that the City will not attempt to sell Dehler Park during the term of the contract.
6)   Provides both the City and the Ball Club with the opportunity to schedule events at the park, with each receiving revenue from their own events.
7)   Provides a dispute resolution process.

Eliminated from the prior contract are provisions that give the City the opportunity to review all Mustangs contracts with other business entities, that require the City to review Mustangs' finances annually (an alternative process is provided), and that require a baseball camp.

The Mustangs organization asked that the contract be approved before winter baseball meetings during the week of Dec. 5.

City Council may:

• Approve the agreement as presented,
• Modify the contract, sending it back to the table for further negotiations or;
• Disapprove the contract, which also would require new negotiations.

Renegotiating would likely result in a delay in the increased payments m naming rights revenue and the Dehler Park improvements outlined in the proposed contract.
 

If the agreement is approved, the City would need to budget $30,000 annually in the Parks and Recreation Fund for repairs.  Such a clause was included in the Cobb Field agreements, but not paid for many years, contributing to the decline of the old stadium.  The additional cost would be offset by a $30,000 increase in the Mustangs' rent, although that money will go into the City of Billings Ballpark Permanent Fund, offsetting contributions that otherwise might have been necessary in the future.

The exact amount of revenue that would come to the Permanent Fund from the sale of naming rights is unknown.  Using the Dehler Park naming rights as an example, the $1 million donation would have added $150,000 to the Permanent Fund account.  However, the Ball Club believes it can raise more revenue than in the past from such naming rights.

 

Staff recommends that the City Council approve the proposed agreement.