Out of Sounds

UPDATE 5:54 p.m. Tuesday, 27 March -- Nashville Sounds throw a curveball to get yet more time. Development partner could be looking for a new teammate

Email | Print By Richard Lawson

UPDATE: The Nashville Sounds threw another curveball this afternoon. At the final hour, the team did what it said it wasn't going to do. It signed the Metro Council amendment to the memorandum of understanding to extend the deadline for completing financing on a new downtown ballpark without having a joint development agreement with Struever Bros., Eccles & Rouse.

The Sounds pulled a last minute move last Friday with filing a resolution to get on the agenda for the April 3 meeting when everyone thought the deal was dead then.

On April 3, the council will consider the amendment. But Councilman Mike Jameson, who is sponsoring the amendment, has said he'll vote against it without the joint development agreement. That typically means other council members will follow suit and reject the extension.

And guess what? That agreement doesn't look like it's happening anyway. Struever Bros. issued a statement saying it made a best and final offer today and the Sounds rejected it.

"Within this proposed joint development agreement, SBER offered a clear path forward to get the project back on track by offering to share design expense and construction risk that under terms of the memorandum of understanding approved by Metro in February 2006 belong exclusively to the Sounds," Priscilla Carroll, the developer's general counsel said in the statement. "SBER is for an extension of this project by the Council, but only if an extension will result in the project becoming a reality. The fact remains that the Sounds must accept a fair and reasonable offer to help them with the obligations of the MOU."

Even if the agreement was signed, the Sounds could be dealing with a hostile council, making passage difficult.

As originally reported:

There may have been no joy in Mudville when mighty Casey struck out, but he wasn't in Nashville when the Sounds deal went South.

The Nashville Sounds have whiffed on a deal to go downtown after much anticipation that locals would while away summer afternoons on the riverfront hearing wood meet twine wrapped tightly in leather.

But the team's development partner is feeling a bit like Ray Kinsella ("if you build it, they will come"). It says it wants to build a ballpark so another minor league baseball team will come.

If Mayor Bill Purcell holds the Sounds in default -- as he has threatened -- of the memorandum of understanding signed a year ago, the team's development partner Struever Bros., Eccles & Rouse intends to move forward under the MOU and search for a team to replace the Sounds if issues can't be worked out. The developer already has relationships with professional baseball teams, notably the Baltimore Orioles and the Boston Red Sox.

It would be a challenge to get another team and Struever Bros. would prefer to have the Sounds play in the ballpark but is prepared to search if necessary. To help in that cause, the developer may need an amendment to the MOU that allows for at least a Double-A team, not Triple-A as stipulated.

Neither the Sounds nor Struever Bros. have budged on a joint development agreement to restructure the deal to build a new $43-million ballpark downtown. As a result, blame has been flying from every direction. As it stands, the developer appears to have Metro on its side.

Purcell said Friday he would hold the team in default of the MOU if the Sounds don't agree by 4 p.m. tomorrow to extend the deadline for completing financing to Oct. 31.

The team won't sign the amendment without the joint development agreement.

Glenn Yaeger, the Sounds general manager, however, hasn't given up hope for a downtown ballpark if the deal dissolves. This afternoon, he said from his spring break vacation in Arizona while taking in some baseball spring training games, that the team won't give up trying to get a new ballpark downtown, just not with Struever Bros. as the development partner.

"The only remedy we have is to let this expire," Yaeger said of the MOU.

Yaeger tossed a knock down pitch at Struever Bros. this afternoon, which prompted the developer to start talking publicly about what it would do if the city pushed the Sounds into default. He has been blaming Struever Bros. for the troubles with the deal moving forward, saying the developer hasn't performed under the MOU. But Yaeger went farther yesterday. He said the developer hasn't responded to requests to show a commitment to the project, "one they've been unwilling to do for 14 months."

Yaeger said the developer's fee is one point of contention. If Struever Bros. becomes master developer as proposed, it takes over how the $43 million is spent on the ballpark. He said $10 million covers "soft costs" with the first $2 million going to Struever Bros. as a development fee. Yaeger said the team wants Struever Bros. to reinvest that into the project. "To us, that's a commitment to the project," he said as San Francisco Giant Barry Bonds was striking out in the background.

The team also wants Struever Bros. to cover the cost of getting construction documents to the level needed to determine a guaranteed maximum price. Those costs would be reimbursed at closing, he said, but noted that the developer has balked at that notion.

Interestingly, it's the lack of complete construction documents and a guaranteed maximum price that could put the Sounds in default. Struever Bros. and Metro's position is those documents were supposed to be completed long ago. The Sounds' lenders wanted them as a condition for loaning $23 million for the ballpark.

Yaeger has countered that the design process was stopped when it appeared that Struever Bros. wasn't able to put together its $20-million share of the money for the ballpark and never disclosed who its equity partner was on the planned $225-million adjacent development. "We knew Struever Bros. wasn't going to able to hit the Dec. 31 deadline," Yaeger said. "We've been asking the city since July to step in."

By default, the Sounds actually get another 45 days to make it right if Purcell proceeds to push the team into default. That isn't believed to be enough time to pull together construction documents to get a guaranteed maximum price. After the 45 days, Struever Bros. gets 90 days to find a developer for the ballpark, which could be itself and bring another team.

The length of time pushes the process nearly to a new mayor and a new council, which it could change the environment entirely for a downtown ballpark. Or, depending on the status of Struever Bros., could mean the Sounds come back and ask a new mayor and a new council to float city bonds to build the ballpark, something Purcell wouldn't do.