Tuesday, December 6, 2016

Shucking & jiving over the Shuckers

Is yet another crony capitalist deal about to blow up in Mississippi? Our favorite reporter, Anita Lee of the Sun-Herald, reported that the city of Biloxi sued Biloxi Baseball and Overtime Sports over a deal that has apparently soured:

The honeymoon is over after two seasons of minor league baseball, with the city filing a lawsuit Monday in Chancery Court against Biloxi Baseball and Overtime Sports Management, owners of the Biloxi Shuckers.

The city says in the lawsuit that it has been unable to determine how much Biloxi Baseball owes the city for rent, advertising and ticket sales under a stadium lease because Biloxi Baseball and Overtime Sports has failed to account for its sales.

Biloxi Baseball has paid the city $146,450 in rent through Oct. 1, claiming it is due a discount of $153,550 under the terms of the lease. The city denies the discount, or “offset” is owed.

The city says Biloxi Baseball has failed, despite requests from the city, to account for ticket sales, video-board advertising and other advertising for which the city is supposed to receive compensation under the lease.... Rest of article.

The lawsuit is posted below.  The lawsuit makes several allegations and demands:

 17. Pursuant  to the Video Board  Agreement, Overtime  guaranteed  payment to  the City of at least $50 ,000 in advertising revenues per year in exchange for  which  the City assigned its field naming rights under the Sublease to Overtime "as long as the compensation required  hereunder  is paid  to the City."   No compensation  has  thus far been  paid to the  City under the Video Board Agreement....

20. On June 5, 2015, the City and Biloxi Baseball made a joint application to the Mississippi Development Authority ("MDA") for the Mississippi Tourism Rebate Program to defray the costs of constructing the Stadium. In that application, Biloxi Baseball represented to MDA that its expenses in acquiring and relocating its Minor League Baseball  team  and  in tenant improvements to the Stadium  exceeded  $20,000,000. To date,  the  City's  consultant who was hired to manage the application has been able to confirm with Biloxi  Baseball's  auditor approximately $16 ,500 ,000 of investment eligible under the Program....

22. Biloxi Baseball has not certified and accounted for its ticket sales since the commencement of the Sublease, nor has it accounted for its efforts made to sell advertising on the video scoreboards, its advertising revenues or the making of required specified improvements, thereby preventing the City from determining amounts owed by Biloxi Baseball under the Amended Sublease . As a result of  Biloxi Baseball's  actions  and/or  inactions,  the City has been unable to verify the amounts that it is owed and therefore seeks the equitable remedy of an accounting of ticket sales, Base Rent and Additional Rent due, improvements made pursuant to the First Amendment, efforts made to sell advertising, advertising revenues owed and any other amounts owed under the Amended Sublease.

23.   Biloxi Baseball  has not provided  information  sufficient  to support $20,000,000  in eligible investment under the Mississippi Tourism Rebate Program. As a result of Biloxi Baseball's actions and/or inactions, the City has been unable to reap the full benefits of the Mississippi Tourism Rebate Program and therefore seeks the equitable remedy of  an accounting  of  all  costs  incurred  by  Biloxi  Baseball  in  acquiring  and  relocating  its  Minor Baseball team and in tenant improvements to the Stadium.

25 (Biloxi made the same allegations against Overtime) 25. Overtime has not certified and accounted for its ticket sales since the commencement of the Sublease,  nor has it accounted  for its revenue received to date  pursuant to its sub-assignment of the field naming rights.....

28.    This Court should issue its declaratory  judgment that Defendant Biloxi Baseball  is currently obligated to pay the shortfall in Base Rent owing under the Amended Sublease through October 1, 2016 in the amount of $153,550, net only of such liquidated damages as Biloxi Baseball may prove  itself  to be entitled at the trial of this cause,  but    in any event such set-off is not to exceed $100,000....

 This is not the first time serious questions have been raised about the methods used to bring the Shuckers to Mississippi.  Steve Wilson reported a year ago in Watchdog.org:

The city’s hopes that fans would line up — like at the end of the movie — for its taxpayer-funded minor league baseball stadium didn’t materialize. MGM Park averaged 3,459 fans in 46 home games, 541 fans per game short of the 4,000 average envisaged by a study commissioned by the city.


 The team, under its original lease with the city, was to pay $150,000 each year in rent plus a $2 surcharge on every ticket sold up to 231,250. The city, in a deal reached with the team, gave up that surcharge for the first two years of the 20-year lease in exchange for not having to pay additional fines of $10,000 per missed game if the stadium wasn’t open by June 1....

 In 2013, Mississippi Gov. Phil Bryant announced plans to award $15 million in oil spill funds to the stadium, projected to cost $36 million. Biloxi voted to borrow $21 million in bonds to pick up the rest of the tab for the park.... Article.

 Stay tuned, folks.  It looks like we are going to have a courthouse conflict. 

 Kingfish note: The city sold $21 million in bonds to build the stadium.  The professional service fees for the bond transaction are:

$21,000: Mississippi Development Bank (Issuer)
$12,000: Balch & Bingham (Issuer's counsel)
$60,000: Government Consultants, Inc. (Financial advisor)
$4,000: Hancock Bank (Trustee)
$74,500: Page Mannino, Peresich, & McDermott (bond counsel)
$52,500: Butler Snow (Disclosure counsel)
$5,000: Michael Collins (City Counsel)
$16,000: S&P Rating Serrvice
$500: Spence Flatguard (State bond attorney)


Note: The lawsuit is only 9 pages.  The other 80 pages are comprised of exhibits.  





29 comments:

Anonymous said...

I would've gone with "Lawsuit? Aw, Shucks!" as a headline, but this is good.

Anonymous said...

When will these cities learn that these scam artists are just professionals in suits. Don't think so? Not only the Team owner is one but look how many thieves in suits got fees paid to them.

Anonymous said...

Despite the problems which will get hammered out one way or the other it is a nice ballpark and their team has been very competitive both seasons. Not much to complain about if you are a fan.

Anonymous said...

"Shucking and Jivini" certainly is appropriate, although "Getting Shucked" gets to the allegations of the Complaint.

Anonymous said...

The Beau Rivage will probably end up getting the stadium at no cost since it was built on land owned by the casino. Another scam on the taxpayers.

Anonymous said...

Just another satisfied customer of the Yates family

Anonymous said...

Put a sewer rat in a suit, and it's still a sewer rat. Only it's wearing a suit. Are we incapable of learning that?!

Ghost of Pete Hallat said...

Criminal enterprise owns highway 90 from one side of Mississippi to the other and everything on either side of it.

Anonymous said...

Stadium construction became the scam of the day for the 21st century but it's popularity among the well-heeled hustlers will wane and they'll find a new way to scam the gullible public. After all, you can only build so many ballparks. But, it's still going strong (see Atlanta) and has been very good to a number of lawyers, construction companies and "owners", and it's cost the taxpayers far more than they will ever know. Fortunately for them the taxpayers only care about money wasted on education, welfare, and dependent children, not sports stadiums.

Anonymous said...

This is the price cities i.e. taxpayers pay when dealing with professional sports at any level. The smoke and mirrors deployed to make everything seem peachy is the envy of the entertainment world.

Anonymous said...

8:18am. Are you saying this is yet another Yates' project?

Anonymous said...

It's amazing how Lord Snow weasels its way into all these crony deals. Would love to know the back story of Governent Consultents Inc?? I would imagine a Barbour is involved somehow.

Anonymous said...

Yes this was a Yates project similiar to the Pearl stadium

Anonymous said...

Steve Holly owns the financial advisory firm

Anonymous said...

The main attorney for the City of Biloxi was pushing this as a good deal for the city when the average taxpayer knew this was a sketchy deal at best.

Those for the new stadium framed the question as being for or against baseball. Who isn't for baseball?

The issue was really who should pay for the deal and take the risk. For a City that was already having budget issues it shouldn't have been the taxpayer. Now the city and its residents are on the hook for 20 million for a stadium that will not generate enough revenue to cover expenses.

It only gets worse from here folks.

Anonymous said...

Those speaking of Yates and their dealings, I wish you could read their subcontractor agreement. No way in hell anyone with a brain and some dignity would sign that thing. Basically, if decide they want to, they can, they'll drag you out in court for minuscule reasoning's with their in house atty's until you cant take it anymore, then make a low ball offer to buy your business completely out.

Anonymous said...

4:18 speaks THE absolute truth! I know for a fact. Dig deeper and see if Bill Yates offered to finance th Stadium on the coast as he did for Pearl. Does anyone ever vacation at the big development at Fort Morgan? He got it lock stick and Barrell the same exact way.

Anonymous said...

"lock stick and Barrell"

?????

Anonymous said...

Yates = little Napoleon.
Those same house attorneys will also eat you for lunch if their construction project has faults. He will not make it right.

Anonymous said...

Seems to be a trend. Could have been $70 million like this money pit.
http://www.al.com/news/mobile/index.ssf/2016/11/mobiles_gulfquest_museum_opene.html

Ghost of Rudy... said...

There's been a mistake made here folks. This all happened in Madison County, not on the Gulf Coast.

Anonymous said...

@ 8:02

"Getting shucked"

LMAO !!!!!!!!!!!!!!!!

PittPanther said...

Holy crap, 5:37pm. Did you read the comments in that article? Those people hate Mobile more than you guys hate Jackson!

Anonymous said...

Can someone post the CUSIP# for the bonds?

Anonymous said...

We don't 'hate' Jackson, Pitt. It's Pennsylvania that sucks.

Anonymous said...

Only in Texas!

https://www.texasobserver.org/rationale-for-texas-largest-corporate-welfare-program-was-a-typographical-error/

What if Texas blew billions of dollars because someone misread an obscure business report 15 years ago?

“The unavoidable conclusion,” according to the report, “is that the case for passing the largest economic development incentive program in the State’s history may have been based on the fear incited by a magazine’s typographical error.”

MISSION ACCOMPLISHED!!!

Anonymous said...

2:38 Wrong. Yates doesn't have anything to do with the ownership or financing of Biloxi stadium. Yates only built it.

Anonymous said...

I believe 2:02 is correct in the lack of ownership of Biloxi versus ownership of Pearl. However, I would be willing to bet Yates sure as hell used every connection at the City of Biloxi and MDA to push it on through.

Anonymous said...

So... In this scam, lawyers got paid $144,5000? Just to get it up and running. What's the tab now?

Should Miss. tax internet sales?

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