The future of the Fresno Grizzlies is as bright as the five o’clock sun. On Monday afternoon, the city council voted to amend the lease at Chukchansi Park. The city hopes this spurs more revitalization downtown. The Grizzlies hopes this clears the way for the long-awaited sale of the team.
The proposed new owners of the team will be Ray and Michael Baker, a father-son duo from the Denver area and Jim Coufos, a retired investment banker living in Southern California. All have investments in other minor league teams.
The Bakers share a stake in the Grand Junction Rockies (affiliate of the Colorado Rockies). They are minority partners with the Monfort Investment Group, whose family members own the Major League Rockies. Coufos is a partner in the Billings Mustangs (affiliate of Cincinnati). Both minor league teams are members of the Rookie-level Pioneer League. So, rival owners in one league are partners in another.
During Monday’s debate, city manager Bruce Rudd said this deal ensures the Grizzlies will stay in Fresno for the foreseeable future. “Given the cost (of liquidated damages), we don’t believe this team is going anywhere any time soon.”
That is because if the team moves before 2032, they would be on the hook to the city for the remainder of the stadium’s bond debt. It starts at more than $44 million, and gradually decreased by about $3 million each year.
While the council voted unanimously 7-0 to change the lease, it did give councilwoman Esmeralda Soria some concern. “This is our asset. I know that from the work you guys have being doing over the last five years, you guys have been trying to get the best deal. But it still gives me a little heartburn.”
The rent, which was $1.5 million when the stadium first opened in 2002, was cut in half in 2009 under a deal orchestrated by then councilman and now Mayor Lee Brand. Monday’s vote will cut the rent to $500,000.
“We have this stadium. It’s a great asset for the community. Our job is to make the best situation we can from a financial point of view to cost as little as we can to the taxpayers. At same time, (we need to) maintain this amenity, this $40 million asset in top condition; offer a top-flight Triple A experience to the public,” Brand told the media after the vote. “Hopefully, their success will be our success. They get more people in. They’ve got things like new concession agreements, and other things to be successful on. These guys have demonstrated their ability to be successful in business. I would expect it to continue in Fresno.”
Derek Franks is the general manager of the Grizzlies. He is appreciative of City Hall’s efforts. “I really applaud the city. This wasn’t done overnight. This was a lot of time. We’ve worked with this group for many, many months. The city worked on this deal for at least six months, very carefully went over every detail. I really applaud Mayor Brand and his team for coming up with a deal that works for both sides. It is really going to solidify baseball in Fresno for the long term,” Franks said.
Both the city and the new ownership will share repair costs. Both parties, along with the current ownership group, will establish a repair fund starting at $5.25 million. The breakdown of contributions are: City of Fresno, $3 million; current owners $1.25 million; and new owners $1 million.
Then, the team and the city will contribute $300,000 into the fund each year starting in 2020. That amount will increase annually by 2%.
Mayor Brand looks forward to the Bakers owning the team. “I have a really good feeling. They have demonstrated their net worth and ability financially to make this thing go on. My understanding is that it is a cash transaction, which means there is no financing.”
The amended lease calls for the new owners to put up a $1 million line of credit (good for two years of rent, Brand notes), that would act as a de facto rental deposit.
Councilman Garry Bredefeld voted to approve the lease. He also was on the council in 2000 that initially approved the stadium project. He hopes this continues to be the catalyst of downtown improvement.
“Bitwise Industries, technology companies…the CEO of Bitwise said they wouldn’t have invested $7 million in their building if the stadium hadn’t been there. So, it’s all happening. The downtown stadium was the stimulus for that. We just want to continue to make sure it stays a jewel in our downtown,” Bredefeld said.
Even with a new ownership group, Franks, just like the Grizzlies, is committed to staying in Fresno. “My desire is to stay with this club and see it through and make it a success. We needed to sell the club for that to happen,” Franks said.
Another aspect of the contract is an obligation to hold community events on non-game days. To avoid a sliding scale of financial penalties (up to $100,000), the team would need to hold either a) 100 events, b) draw at least 10,000 attendees or c) donate $100,000. Community events are defined as youth league ball games, providing space for board meetings of non-profit groups or hosting fundraisers. The team would foot the costs of any such event.
Despite losing money the past few years, the new lease has a profit sharing agreement. If the team’s net cash flow is greater than $500,000, they would share 20% with the city (up to $300,000).
The deal to sell the team still must be completed and approved by the Pacific Coast League. PCL President Branch Rickey told GV Wire last week that he expects that to happen. The time table could be anywhere from 30-90 days.
What are your thoughts? Leave your comments below.
Contact David Taub
Phone: 559-492-4037 / e-mail
This story was not subject to the approval of Granville Homes.
Want these stories delivered directly to your e-mail inbox? Subscribe today.