Up-in-the-Air Ball

You might think with the unveiling of a high-priced scale model of the new baseball stadium, the beginning of construction on the real thing and the constantly upbeat assessments by officials of the Harris County-Houston Sports Authority, that everything's in place for the Ballpark at Union Station.

You'd be wrong.
Even though officials have consistently stressed their tight deadlines and need to get things done as quickly as possible to meet their deadline of Opening Day in the year 2000, negotiations between the Authority and two key players have yet to be resolved.

There is still no formal agreement between the Authority and Astros owner Drayton McLane or between the Authority and Enron Chairman Ken Lay's group of downtown establishment-types that is supposed to give up to $39 million to the project.

Letters of agreement between the parties were signed last year, and officials strove to give the impression that all that remained was connecting a few dots to formalize the deals. Authority chairman Jack Rains posed happily before TV cameras in November when he signed a further pact with McLane -- a "memorandum of agreement" -- and indicated a huge obstacle had been removed.

Five months later, however, there is no contract with the Astros, just a stream of information-free updates to board members from their secretive colleagues Billy Burge and Michael Stevens, who are taking the lead in negotiating the various deals.

"I feel very comfortable on how we're doing," Burge told board members March 24. "The lease agreement (with the Astros) should be consummated fairly quickly and I hope we can say the same about the land deal (with Lay's group)."

That wasn't enough for board member Al Luna, who is emerging as one of the more aggressive questioners on the board and one who rarely passes up a chance to get in a dig at Burge, the former Metro chairman.

"I don't know ... what's going on with all this," he said. "We've been getting the same report for at least the last two months, that negotiations are just going on. We need more information about ... what the issues are that need resolving."

Chairman Rains, whose record on conducting the Authority's business openly has been spotty (the state A.G.'s office now assigns a lawyer to ensure that the board no longer skirts the open meetings law), was predictably expansive at the public session. He told Luna to meet privately with the board members negotiating the deals to get a more detailed update.

After the meeting, Luna remained unimpressed. "I don't think there's been enough information coming to the board from the other board members involved," he said.

Rains, for his part, gave terse answers to a Press reporter whom he all but sprinted away from to avoid. "No," he said, he had no concern about the pace of the negotiations, and any time a board member expresses concerns about getting enough information, he will look into it.

Former city attorney Gene Locke, newly installed as the Authority's general counsel, told the board he was determined to speed up talks. "I have literally pulled all the lawyers together and all the documents and established a time frame, and over the next three weeks I think you'll see some fairly intensive work," he said. "If it's all not final by the end of April, we'll at least have something so close that it will be very near final."

None of the parties leading the negotiations are being very forthcoming. The Astros are tangling with Stevens, former mayor Lanier's right-hand man for development issues, and Burge and Rains are handling the Lay group.

Lay's company, of course, lost a bitter battle in February for the lucrative contract to cool the stadium; whether he's enjoying letting the Authority stew a little in return isn't known.

But several legal issues may be hindering the effort to finalize the vague agreement between the Authority and Lay's group, called Sports Facilities, L.P. (SFLP, in Authority shorthand).

In a letter of intent signed by the county, city, SFLP and McLane in September 1996 (and modified slightly four months later), SFLP would purchase land necessary to build the stadium and provide other financing. Current plans call for the partnership to raise $39 million for the project.

In return, businesses that donated to SFLP would get first crack at naming rights, concessions, seats and luxury suites.

Perhaps more troubling from a legal standpoint is another provision in the letter of intent, which gives SFLP an option to purchase the land provided for the stadium at any time "from the date of acquisition of the land ... (up to) five years after the estimated useful life of the facility." (The "useful life" is generally thought to be 30 years, for negotiation purposes.)

At least one of the families whose land was condemned to make way for the stadium is objecting to that clause. "In condemning the property which HSFP could not purchase, the Sports Authority is merely acting as an agent for HSFP to accumulate prime downtown real estate for the benefit of HSFP," says a lawsuit filed by the family, which uses a slightly different acronym for Lay's group. "HSFP, through its use of the Sports Authority, has created an ingenious method for the taking of private property for its own use."

Another possible snag is the issue of whether SFLP's first-refusal rights have a value that could present tax complications.

Lay referred all questions to the uncommunicative Rains, but during the effort to get the stadium approved, he forcefully denied that his efforts masked any moneymaking or land-grabbing scheme by downtown interests. The deal instead represented a civic effort by business leaders to fill a financing gap for a project they thought would be crucial to rejuvenating Houston's downtown, he said; he challenged critics to invest their own money in SFLP and see just how little return they would get.

The negotiations with McLane, on the other hand, may hinge not so much on legal issues as on the hard-bargaining owner's attempts to wring every last penny he can from the deal. And there is some concern that leverage may be swinging his way.

When the Rains-touted letter of agreement between the team and the Authority was signed in November, McLane seemed backed into a corner: Major League Baseball, which, unlike other pro sports, can control whether its franchises move, was not about to allow the Astros to vacate a market where voters and the state Legislature had approved funding a $250 million facility.

But now, as the Authority issues bonds and gets deeper and deeper into actual construction, McLane may be regaining the hammer a bit. "Let's just say it is not out of character at all for him to retrade something (already negotiated)," a county official involved in the talks in 1996 and 1997 told the Press.

Perhaps McLane is sitting back, letting the project move ahead to the point where Authority negotiators will get increasingly desperate to close the deal. Already the team has made noises publicly that it should receive some of the windfall that came from the competition to cool the ballpark.

Or maybe the delays between the Authority and Lay and McLane are simply the result of lawyers being lawyers, racking up billable hours by nitpicking every detail.

Perhaps the answer will be known soon. What's troubling is that board members don't know it now.

Contact Richard Connelly at rich_connelly@houstonpress.com.

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