City of Visalia asks courts to settle contract dispute with the Minor League Team’s ownership over major renovations mandated by Major League Baseball
VISALIA – The City of Visalia has taken the first swing in a battle over ballpark renovations with the Visalia Rawhide.
The city filed a complaint in Tulare County Superior Court against the Minor League Baseball team on Dec. 21. The complaint is over whose responsibility it is to pay for millions in improvements needed to bring Valley Strong Ballpark into compliance with new standards issued by Major League Baseball for its Minor League affiliates. In essence, this is a landlord-tenant disagreement with the city leasing the stadium to the Rawhide. The city claims the bill will be in the ballpark of $10 million and that direct negotiation and mediation efforts have failed after nearly two years of talks.
“Rather than waiting to be sued and spending substantial sums on protracted litigation, [Visalia] seeks a speedy judicial declaration of the respective rights and obligations of the parties to the Lease,” Attorney Leonard Herr, of Herr Peterson & Burglund, stated in the city’s complaint.
The city has owned the stadium since it was constructed in 1946 and says it has spent “tens of millions of dollars over the years maintaining the Ballpark for the use and enjoyment of the community” and $12 million in the decade prior to the current ownership purchasing the team. A major renovation in 2009, when the team rebranded from the Visalia Oaks to the current Visalia Rawhide, included fully reconstructed dugouts, new lighting, improved field conditions, and other improvements intended to achieve compliance with MLB standards.
Elliott Sigal, a retired physician and medical researcher, and his son, Sam Sigal, bought the Rawhide just a few months after the team won its first California League Championship in 40 years. Sam is president of First Pitch Entertainment (FPE) LLC, the corporation which owns the Rawhide, and now makes his permanent home in Visalia.
Both parties are operating under a lease agreement which took effect on Jan. 1, 2020 after FPE purchased the minor league team from the former ownership group led by Tom Seidler, part of the Seidler-O’Malley family which owns a portion of the San Diego Padres and formerly owned a portion of the Brooklyn/Los Angeles Dodgers for a half century. The lease is nearly identical to the one that Seidlers’s Top of the Third, Inc. was working under in 2019 when they sold the team. In fact, it is the Seidler’s contract the city included as part of its complaint and not the one signed by the Sigals.
At the time of the current lease, FPE acknowledged that “the Ballpark was in an acceptable state of compliance with standards for facilities as established by Minor League Baseball.” In 2020, the Rawhide agreed to a new set of facility standards as part of a new Player Development Licensing Agreement with Minor League Baseball.
Among the list of improvements is to renovate or replace stadium lighting fixtures, which the city claims it had already replaced to meet MLB standards in the last five years. An appendix in the city’s court filing shows two lighting fixtures and poles were replaced following the 2012 season and several more in the outfield after the 2014 season but two more along the baseline were “to be replaced by Musco at the end of 2016 season, but work was deferred to a future date” and were never completed. A facility survey conducted by Gould Evans Associates for the Minor League Commissioner’s Office shows that as of 2018, the ballpark’s infield lighting was more than 25 years old, “continue to underperform and are less than that required” in the contract between the Major and Minor leagues, known as a Professional Baseball Agreement. “The lighting in its current state is not acceptable,” the report stated.
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.
Last year, Major League Baseball hired consulting firm Ewing Cole to perform a facilities audit of all Minor League ballparks to determine compliance with the new standards. In a September 2021 audit report, Valley Strong Ballpark was assessed 206 penalty points, suggesting a 38% failure rate, according to court documents.
While the city says the Rawhide’s improvements will be between $7 and $11 million, 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 will be fined by Minor League Baseball. Failure to meet the standards by 2025 could result in Major League Baseball taking away the team’s license and possibly transferring that license to another city, according to BaseballAmerica.com.
The city claims the team entered into the 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.
Rawhide President Sam Sigal emphatically denied the claim the city was unaware of the rule change and FPE’s acceptance of the new mandatory facility requirements.
“The city of Visalia’s hasty suit against the Visalia Rawhide is riddled with inaccuracies,” Sigal said in a released statement. “The Rawhide looks forward to correcting the record in the near future and having its day in court.”
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 document. “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.”
While FPE has yet to file its response to the complaint, the team contends 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.
“At issue is the City’s contractual responsibility to correct compliance violations for player conditions required by Major League Baseball,” Sigal said in FPE’s statement. “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.”
FPE claims these changes were mandatory and non-negotiable to remain part of Minor League Baseball, which 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.”
The city’s complaint is asking the judge to declare that the city’s monetary obligations for improvements are limited to $200,000 per year and that FPE, Visalia Rawhide, pay for the city’s attorney’s fees and legal costs.