Rawhide argue city’s call for court ruling

VISALIA – The Visalia Rawhide is taking its turn at the plate in its court contest against the city of Visalia over needed ballpark renovations.

On Feb. 6, First Pitch Entertainment, which owns the minor league baseball team, filed its response to the city’s complaint and a cross complaint against the city, which owns the stadium, in a legal pitching duel to see who will pay for millions in player improvements to bring Valley Strong Ballpark into compliance with Major League Baseball’s new facility rules. In its complaint filed on Dec. 22, the city argued that it was only responsible for up to $200,000 per year in stadium improvements under the terms of stadium lease.

Section 2 of the lease, which was effective as of Jan. 1, 2020, states the city, throughout the 10-year contract ending in 2029, “shall provide a facility on the Premises that complies with all aspects of Major League Rule 58, establishing ‘standards for Minor League Playing Facilities’ or as the same may be amended during the Term.”

FPE contends Section 2 is also clear the city’s annual contribution of $200,000 is explicitly for “discretionary alterations and improvements to the Premises that improve the fan experience,” defined in Section 13(b), and have nothing to do with MLB-mandated compliance issues for playing facilities.

FPE’s attorneys, Mccormick, Barstow, Sheppard, Wayte & Carruth, LLP, state Section 2 of the lease is “an unambiguous provision.” The document goes on to state, “Among the important Lease provisions was the City’s obligation to bear financial responsibility for maintaining facility standards, including the CITY’s on-going obligation to ensure that [the] Stadium, which is owned by the City, is in compliance, at all times, with MLB Facility Standards.”

Much of the lawsuit comes down to Major League Rule 58, which establishes standards for Minor League playing facilities. The list of standards range from seating capacity to security posts and from parking to bullpens. Major League Baseball amended the standards in 2021 with its Rule 27 after the Rawhide signed its 10-year lease with the city. The new rule uses a point system matrix to determine if stadiums are in compliance with benchmarks beginning with the start of 2023 in April. According to BaseballAmerica.com, teams are deducted at least one point for any aspect of the stadium that does not meet the new facility standards and are only allowed to have a 10-point deduction by April 1, 2025. Deductions are scored on items such as surveillance cameras, field lighting, bullpen mounds, outfield walls, visitor lockers and even internet access.

Two separate audits, one paid for by FPE and another by MLB, identified various projects required to bring the stadium into compliance with the new facilities rule, including expansion of clubhouses for home and visiting teams, expansion and renovation of associated training, office and player dining facilities, and improved lighting on the field and a new outfield fence.

“Not only did the MLB audit conclude that Rawhide Stadium was deficient, but also issued 202 non-compliance demerits,” FPE stated in its response. “A failure to remedy these demerits could ultimately result in serious fines and a loss of the team.”

It wasn’t until six months after the audits were complete that the city agreed to meet with the Rawhide, according to court documents. Just before the 2021 season was set to begin, the first since the team’s California League Championship in 2019, FPE provided the city with the final list of facility standards newly approved by MLB. Two weeks after its first meeting, the city followed up with a Zoom call in which city manager Leslie Caviglia was “steadfast” in her position to cap any city-funded improvements at $200,000 per year adding that FPE could sue if it still “felt the City was obligated to pay more money towards the Facility Standards improvements.”

“Despite the clear-cut obligation in Section 2, when it came time for the City to fulfill its obligation to bring the stadium into compliance with MLB-mandated improvements designed to increase player well-being and safety, the City refused, trying to change its written agreement with a local business because the City did not like the Lease,” the cross complaint states.

In July 2022, FPE submitted a mediation demand to the city in the hopes that formal mediation would allow both parties to come to the table in good faith and negotiate a solution. The city formally ended those negotiations when it filed its complaint against the FPE on Dec. 22.

WALK-OFF SLAM

In reality, talks ended long before the city filed its complaint. Before the city went into mediation last July, FPE claims city manager Leslie Caviglia said she is willing to lose the team to make the city’s point over the lease.

“Even when confronted with the reality that the City could lose the Rawhide team, the City Manager indicated that the loss, though not ideal, was acceptable to the City,” the cross complaint reads.

FPE contends not only that the city has the responsibility and means to pay for the improvements, a cost between $7 and $11 million, but it would lose far more than that in economic activity if Visalia were to lose the team over stadium compliance issues.

“The City is attempting to, in bad faith, renegotiate a lease the City willingly and knowingly entered into simply because the City does not want to pay for required stadium renovations, despite having the financial means and the obligation to do so,” FPE contends.

An updated Economic Impact Study performed by a nationally recognized expert, estimated the Rawhide contributes over $4.6 million dollars annually to the local Visalia economy through direct operations and indirect, third-party expenditures and $75,000 annually in local tax revenue. The economic activity generated by the team supports an estimated 68 full and part time jobs and $1.6 million annually in wages and benefits associated with those jobs. In contrast, an empty stadium would still cost the city approximately $300,000 in yearly maintenance-related costs with no economic benefit to the city and the community.

“The loss of the Rawhide team would have a significant impact on jobs and economic activity in the Visalia community,” court documents state.

If the city were to move ahead with improvements, FPE contends the construction would generate a one-time influx of $2.1 million in indirect spending and $5.7 million in direct spending. That’s in addition to the $4.6 million the team generates each year.

FPE also contends the city would lose out on the team’s contributions to local causes. Since buying the team from the Seidler-O’Mally families in 2019, Elliott Sigal, who co-owns the Rawhide with his son Sam Sigal, have donated $25,000 per year to organizations such as Food Link of Tulare County, Visalia Rescue Mission, the Boys & Girls Clubs of the Sequoias, and Kaweah Health Medical Center. Rawhide staff have volunteered their time at the ballpark to assist in delivering food to the elderly and at-risk populations. Even though the team suffered significant financial losses in 2020, when the season was canceled, and 2021, in the midst of the pandemic, the Sigal Family gave a donation that catalyzed the Healthy Harvest Program of Tulare County to assist in testing and quarantine of affected farm workers.

“While the City Manager claims she does not care about losing the Rawhide team, should the Rawhide team lose its affiliate status, not only would the local community lose millions in funds generated by the ballpark, but it would also lose a piece of longstanding Visalia history,” FPE states.

CALLED OUT ON BALK

FPE also responded to the city’s allegations it was neither aware of MLB’s new facility standards nor that the team had signed a new professional baseball agreement (PBA) with the league. On Dec. 22, 2020, prior to the effective date of the 10-year lease and before signing the new PBA, the  Sigal’s corresponded with then city manager Randy Groom about anticipated amendments to MLB facility standards for Minor League affiliate ballparks and the need for compliance.

“FPE wanted to keep the dialogue open with the City so that the parties could be ready to discuss any compliance changes included in the licensing agreements being implemented by the MLB,” FPE wrote in its court documents. “In fact, [FPE] specifically raised the possibility that the MLB could require changes to the lighting and clubhouse at Rawhide Stadium as part of the new MiLB licensing agreements.”

In addition to Elliott’s communications with Groom, Sam Sigal, FPE’s President, talked to then assistant city manager Leslie Caviglia on multiple occasions in December 2020 about the potential for changes to stadium standards.

“To say that the City was not informed prior to the MLB adopting revised licensing agreements and amending its Facility Standards is simply untrue,” FPE states.

Lastly, the cross complaint addresses the city’s claims it has spent $12 million in the decade leading up to FPE’s purchase of the team in 2019. The city did spearhead a major renovation in 2009 when the team rebranded from the Visalia Oaks to the Visalia Rawhide. The improvements included fully reconstructed dugouts, new lighting, improved field conditions, and other improvements intended to achieve compliance with MLB standards. FPE says most of the improvements made in 2009 were almost exclusively for fan improvements such as the Hall of Fame Club and other fan areas, and that “some of the player facilities date back to the 1970s or earlier and have significant deferred maintenance issues.” FPE said the city-owned stadium has compromised player facilities for decades.

“A judicial determination is necessary and appropriate at this time in order to determine the respective rights and duties of the parties under the Lease,” the cross complaint concludes.