City, Rawhide head to trial over ballpark upgrades

(Rigo Moran)

City of Visalia and Visalia Rawhide baseball team will go to trial on Oct. 16 to decide who pays for millions in stadium renovations mandated by MLB for player safety

VISALIA – A lawsuit over ballpark renovations is now up to a judge after the city of Visalia and Visalia Rawhide baseball team were unable to play ball in mediation.

The two sides met for a final inning of mediation on Sept. 1, but were unable to come to any agreement, sending the case to trial beginning on Oct. 16. Judge David Mathias will umpire the civil suit in Department 1 of the Tulare County Superior Court in Visalia.

The city, which owns Valley Strong Ballpark, and the minor league team, which leases the stadium from the city, are locked in a legal battle over who is financially responsible for millions in facility renovations being mandated by Major League Baseball (MLB) for player well-being and safety.

In its complaint filed on Dec. 22, 2022, Herr, Pederson and Berglund in Visalia argued that the city 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.”

First Pitch Entertainment, LLC (FPE), the ownership group of the Visalia Rawhide, 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.”

3 strikes against stadium

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 for player safety 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.

FPE said MLB scored Valley Strong Ballpark deficient for its clubhouse/locker room, field lighting and left field wall, which the city estimated would cost between $7 million and $11 million to renovate, repair or replace. FPE contends not only that the city has the responsibility and means to pay for the improvements, 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.

A report by BaseballAmerica.com earlier this year shows some stadiums needing upwards of $86 million to bring their ballparks into compliance. Teams not in compliance with the first benchmarks by April 2024 will be fined by Minor League Baseball. Failure to meet all of the standards by 2025 could result in Major League Baseball revoking the team’s license and possibly transferring that license to another city, according to BaseballAmerica.com.

“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.

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The city goes on to claim the team entered into this new agreement with Minor League Baseball without the city’s knowledge “contrary to the express terms of the Lease.”

“The City is not a party to FPE’s [Player Development Licensing Agreement] with MLB,” the city states.

FPE responded to the city’s allegations saying it had made the city aware of the possibility of a new professional baseball agreement (PBA) with MLB prior to signing its current lease. On Dec. 22, 2020, prior to the effective date of the 10-year lease and before signing the new PBA, the Sigal family, which owns FPE and the Visalia Rawhide, corresponded with the 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 Sigal’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.

Opening Day Dispute

The city also claims it was only obligated to comply with Major League Facility Standards at the time the lease was signed and that any improvements beyond that are capped at $200,000. “[I]f additional renovations are necessary during the Term, then Lessor shall be responsible for the cost of those renovations, up to the Annual Contribution of $200,000 described in Section 13(b) per year during the Term,” according to the lease.

“The Lease is clear that City’s financial obligations to support major renovations and additions based on MLB’s changes to the Facility Standard are unambiguously capped at a maximum sum per year,” the city states in the court documents. “Any liability for maintaining or improving the Ballpark over and above those limits lies squarely with [First Pitch Entertainment] or MLB, or some other person that is not City.”

The team claims these changes were mandatory and non-negotiable to remain part of Minor League Baseball. The basic terms of the lease state that the city “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,” a 10-year lease through 2029.

FPE says remaining a Minor League Baseball team is necessary to fulfill its obligations under the contract with the city. According to the lease, “[First Pitch Entertainment] agrees to use the Premises exclusively in connection with the operation of a minor league baseball facility” and “at all times use the Premises for the purpose of operating a California League professional baseball team.”

“At issue is the City’s contractual responsibility to correct compliance violations for player conditions required by Major League Baseball,” Sam Sigal said in a statement released in May. “Failure to comply risks MLB revoking the Rawhide’s franchise and Visalia losing baseball. The Rawhide has led the effort to resolve this issue for nearly two years.”

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