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Tuesday, February 28, 2012

Parking Lot Viewed as McCourt Bargaining Chip




     By Ross Newhan

     Frank McCourt has the right to retain the Dodger Stadium parking lot as part of his agreement to sell the team---but he won't.

    That, at least, is the thinking of several people involved in the bankruptcy bidding but unable to speak publicly because of their confidentiality agreement with Blackstone Advisory Partners.

    There are seven groups left in the bidding process but "it is my guess that not one (of those groups) will agree to submit a final bid if McCourt is adamant about retaining the parking lot," said one of the people with whom I talked.

    "No one wants McCourt to remain involved," this person continued, "and  there is too much money and there are too many options involved in ownership of the lot to give that up as a McCourt tenant.

    "Right now I see him using it as a bargaining chip, but he's not going to get the sales price that he wants--if he gets any at all--if he is serious about keeping the lot."

    One group thought to be among the potential favorites--Joe Torre and Rick Caruso--have already dropped out because they have been led to believe that McCourt intends to keep the lot. In a letter to Major League Baseball they have said that they will immediately jump in again if that changes. However, the process is moving on and it may be too late for anyone to jump back in once McCourt's final intent is clear.

   The principal financial backers in each group are currently in the process of meeting with baseball's ownership committee and executive council.

   As previously reported here and elsewhere, McCourt divided the Dodgers and the parking lot into separate entities in 2005, with the approval of MLB. The entity that controls the parking lot is not in bankruptcy, even though the Dodgers are. The sale agreement between McCourt and MLB specifically permits him to retain the lot--and construct parking structures if he chooses.

  The new owners of the Dodgers would inherit a lease for the parking lots at $14 million per year--with increases starting in 2015--and a separate loan that McCourt has said requires the team to play at Dodger Stadium until at least 2030.

  The sale agreement with MLB calls for McCourt to select a winner from five groups that pass MLB's scrutiny by April 1 and complete the transaction by April 30, when he owes Jamie McCourt a divorce settlement of $131 million.

   "There are a lot of factors involved with the lots, including potential development and the future possibility of a stadium in the new downtown area," said another person associated with one of the bidding groups, most of the seven believed to have submitted conditional bids in the second round of bidding--one bid based on McCourt retaining the lots and one not.

    "I think there will be political pressure on McCourt to include the lots, and I think there could be legal pressure from his creditors if he doesn't get top dollar for the team," the person continued..

    "We will learn a lot more over the next few weeks."

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