Orioles lease deal hits roadblock on cusp of public announcement

In a dramatic turn of events Friday, Maryland Gov. Wes Moore put a halt on a new lease for the Baltimore Orioles after a top lawmaker raised objections.

The Orioles and Moore had reached a complex agreement on a lease that had a goal of keeping the Orioles playing at Camden Yards for 30 or more years, though the lease would have given the team an option to exit after 10 years. They also landed on terms that would set a path for the Orioles to redevelop parts of the Camden Yards property.

The governor’s team began briefing key politicians Friday morning ahead of a planned public announcement but ran into opposition from Senate President Bill Ferguson.

“Fundamentally, I believe that the long-term lease for the use of the ballpark should not be conditioned on whether or not a private owner receives a 99-year ground lease to develop land owned by Maryland taxpayers,” Ferguson, a Democrat whose district includes the ballpark, told The Baltimore Banner. “This is more relevant today, as recent news has heightened uncertainties about the future ownership of the team.”

A report this week that David Rubenstein of the Carlyle Group was interested in buying the Orioles added to Ferguson’s concern, according to Moore administration officials. Orioles Chairman and CEO John Angelos called Moore on Thursday night to reiterate that the Angelos family has no plans to sell their majority stake in the team.

The Moore administration plans to work with Ferguson in hopes of getting the deal back on track. “The Administration hears and understands Senate President Ferguson’s concerns, and the governor has made it clear he wants to work in partnership and move forward together,” Moore spokesman David Turner said in a statement Friday.

The deal that had been reached would have set out a framework for the Orioles to launch an ambitious redevelopment around the ballpark — but the initial deal would have guaranteed only 10 years. It gave the Orioles four years to solidify development plans with the state, which would have unlocked $600 million promised in taxpayer-financed upgrades and extended the lease to 30 years. If those development plans fell through, the Orioles would have had the option to end the lease after 10 years.

The new agreement was set for a speedy track for approval, with votes that would have been scheduled before the Maryland Stadium Authority’s board of directors and the state Board of Public Works next week.

Now that’s not going to happen, according to senior Moore administration officials. The governor’s team is working to figure out what it needs to do to keep the Orioles at Camden Yards past Jan. 1 as discussions continue.

“We will advance some lease to keep us in compliance,” a senior administration official said.

Having the ability to redevelop part of Camden Yards has been a priority for Angelos, who envisions a “live-work-play” destination.

Initially, the Orioles would have continued the current terms of their lease, under which they pay rent on a sliding scale.

The agreement would have defined a process to grant the team a 99-year ground lease on the iconic B&O Warehouse, the vacant Camden Station building and an adjacent strip of parking for potential redevelopment. The agreement that was to be announced Friday set a deadline of May 1 for the two sides to work out details of the ground lease arrangement.

The Orioles were supposed to then have four years to draw up their plans for the redevelopment project and win approval from a series of entities, including the Maryland Historical Trust and a panel of state lawmakers. A person with knowledge of the deal said the four years were meant to serve as a transitional period in which the Orioles could conduct surveys and gather input from the community and key partners that will shape the development project.

“Four years is ample time for them to get their plan together,” a senior administration official said.

An approved development plan would have allowed the Orioles to switch the terms of the lease to be similar to what the Ravens have at nearby M&T Bank Stadium. The Orioles would pay no rent upfront but would take on more maintenance costs.

Without a development deal, the Orioles would have had two options: Convert to a 10-year lease under the same rent-paying terms with multiple extension options, or continue with a 30-year lease term. The 30-year lease could have maintained the rent-paying scenario or had the team take on maintenance instead.

Either way, senior administration officials said, the plan called for the Orioles to remain in Baltimore for a minimum of 10 more years and more likely for 30. The proposed lease also stipulated that the team cannot relocate. Should a change in ownership occur, a new owner would be subject to the same lease and development rights.

“Ground lease or no ground lease, the Orioles are here to stay for the next 10 years,” the senior Moore administration official said prior to the deal stalling.

The lease also allowed for all legacy MSA employees who work at Camden Yards to retain their positions with the government, serving on a contract basis for work at Oriole Park after the club takes over maintenance.

The MSA and Orioles planned to develop a transition period that includes data sharing and contract management. And, at the end of each year, the team would meet with MSA to detail completed projects and cost breakdowns.

For bond-funded projects — the sort that will be paid for by the $600 million from the state — the MSA would remain in a managing role.

State lawmakers authorized $600 million of taxpayer-financed bonds to make major improvements to the ballpark, along with $600 million for M&T Bank Stadium. But the Orioles will unlock the full $600 million only if they agree to stay at Camden Yards for 30 years.

If the Orioles ended up with the shorter, 10-year lease, the state would issue a maximum of only $45 million worth of the taxpayer-financed bonds.

Lengthy negotiations

The deal has been years in the making and the subject of intense private negotiations and public scrutiny. Negotiations began under former Gov. Larry Hogan and, shortly after Moore took office in January, the Orioles announced they would not exercise an option on their lease for a five-year extension. That decision meant the lease would expire Dec. 31.

Angelos expressed a desire to have the new lease done by July’s MLB All-Star break, but that came and went without a deal.

Then, as the Orioles clinched the American League East title Sept. 28, Moore and Angelos appeared on the screen at Camden Yards to announce the two sides had reached an agreement to keep the team in Baltimore for 30 years.

That deal, however, turned out to be a nonbinding memorandum of understanding that served as an outline. Many fans expressed frustration with the nonbinding nature of the deal and raised concerns that it would not be finalized in time.

Negotiations seemed to intensify over the past few weeks, with sources on both sides indicating they were working around the clock on the details. At one point, it appeared possible that the lease of the park itself would be separated from the development rights — a sticking point for the Orioles, who wanted the two deals to move together.

As recently as Tuesday, a top Maryland Stadium Authority official told reporters the negotiations were complex — particularly on the real estate development — and “it just takes time to work through all of the details.”

The deal that had been reached appears to address criticism of the September MOU, including provisions that would have lessened the Maryland Stadium Authority’s oversight role in maintenance and upgrades at the ballpark.

“We wanted to make sure, as the people responsible for the asset and the land, the stadium authority was involved and not have its oversight role reduced,” another official involved in negotiations said.

Moore administration officials said the deal hits on the governor’s key priorities: to keep the team in Baltimore for the long term, to spur economic activity in the city and to be good stewards of taxpayer dollars.

“This is a deal that keeps the Orioles in Baltimore for years to come and continues state oversight and protects taxpayers from just providing the Orioles money without oversight,” a senior official said. “This is a disciplined deal that is methodical in how we think about the complex, how we think about how the money is spent.”

This breaking news article may be updated.

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