The City of Visalia has asked a judge to settle a dispute between it and First Pitch Entertainment (FPE), the owners of the Visalia Rawhide baseball team, over who should bear the costs of improving Valley Strong Ballpark.
“First Pitch Entertainment claims that City of Visalia taxpayers must spend up to an additional $10 million dollars in improvements, as demanded by Major League Baseball (MLB). The City met MLB’s previous requirements and has spent more than $15 million dollars in Capital Improvement Projects since 2003,” a statement from the City of Visalia to the Valley Voice states. “The Visalia City Council believes the current contract with First Pitch Entertainment limits the additional money local taxpayers must spend on meeting MLB’s new demands.”
Sam Sigal, manager and co-owner of FPE and the Rawhide, responded in a written statement to the Voice.
“The City of Visalia’s hasty suit against the Visalia Rawhide is riddled with inaccuracies. The Rawhide looks forward to correcting the record in the near future and having its day in court,” Sigal said.
Background
The City of Visalia owns the baseball stadium at 300 N. Giddings, and leases it to FPE to serve as the Rawhide’s home ballpark. The Rawhide acts as a feeder team to the Arizona Diamondbacks.
First Pitch Entertainment is owned by Sam Sigal and his parents, Ruth and Elliott Sigal. In December of 2019, First Pitch bought the team from Top of the Third, a company owned by Tom Siedler, who had owned the team since 1993.
In December 2020, according to Baseball America, the MLB and Minor League Baseball reorganized and cut 43 minor league teams. Though potentially on the chopping block, the Rawhide — and its relationship with the Diamondbacks — survived the cuts. But there was a cost.
During the major changes happening in baseball, the MLB signed Player Development License (PDL) contracts directly with the surviving minor league teams. For teams such as the Rawhide to keep their license, they would have to comply with the new facility standards described in the license agreement.
“As of Feb. 12 [2021], Major League Baseball has received all 120 signed Professional Development Licenses (PDLs). That means every [minor league] team it invited to be part of its new player development system has agreed to terms and is now part of Major League Baseball’s new player development system,” an article by Baseball America states.
Baseball publication, Pinstriped Prospects, states that “Modernized facility standards ….must be upheld by each organization,” a recap of the changes by baseball publication Pinstriped Prospects reads.
In the filing, the city claims it was blindsided by Sigal and First Pitch Entertainment signing with the MLB to participate in their new player development system, which included the modernized standards, and pushed back on his alleged demand for the city to pay for the new facility standards.
“A mere one year later, [from January 2020] FPE, unbeknownst to the City, agreed with MLB to accept an entirely new set of facility standards as a condition to a renewed licensing agreement. FPE then began demanding the City spend upwards of $10 million of public funds to bring the Ballpark into compliance with the new standard that FPE and MLB had agreed to (without the City’s knowledge or consent). This action by FPE is contrary to the express terms of the Lease,” the city’s complaint, written by Leonard Herr, of Herr Pedersen & Berglund LLP, states.
“After preparing the initial list of demanded improvements estimated to cost in excess of $10 million, Tenant [FPE] has presented the City with an ever-changing list of 21 improvements that it claims MLB will ‘accept’ in order for Tenant to not be in conformance with its new PDLA. The City is not a party to FPE’s PDLA with MLB.”
In a written statement to the Valley Voice, Sigal said that the Rawhide is simply the messenger for the new standards — and that the lease requires the city to keep the stadium up to the MLB’s standards.
“At issue is the City’s contractual responsibility to correct compliance violations for player conditions required by Major League Baseball. 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 2 years,” Sigal told the Voice.
“We are just the messengers of the facility standards. If the ballpark does not get into compliance with the PDL they [Major League Baseball] will take the team away,” he added. “None of this makes my family a cent. The improvements are all for the players.”
The lease
The disagreement on who is liable to pay for the new facility standards is the root of the city’s legal complaint against FPE — and who is liable to pay for the improvements depends on how you interpret the lease.
“A dispute currently exists between City and FPE concerning their respective right and responsibilities under the Lease,” says the suit. “FPE’s interpretation of the Lease is significant and exposes City taxpayers to substantial unlimited financial obligations.”
The city’s legal claim states there is a cap of $200,000 a year that the city has to pay for renovations.
The lease, on the other hand, appears to leave wiggle room that does not exist in the suit — and the version of the lease attached to the complaint appears to be expired.
The lease does repeat the $200,000 cap a year several times throughout the document and infers that the city has no further financial responsibility towards the baseball stadium.
In the section titled “Facility Standards” the lease says the Lessor, First Pitch Entertainment, is responsible for paying for “additional renovations,” and “major maintenance or repairs of the Premises,” and the city is only responsible for up to $200,000 of those costs.
But in the same paragraph the lease also states, “provided, however, that if the Baseball Authorities institute new mandates following the expiration of the current Professional Baseball Agreement (“PBA”) requiring new construction projects that are not improvements to the existing Premises, Lessor and Lessee agree to negotiate in good faith regarding their respective responsibilities with respect to the cost of such new construction projects.”
The PBA referred to in the lease expired in December of 2020 and new facility standards have been implemented by the MLB.
According to Ballpark Digest the end date to have renovations in place is 2025.
City throws first pitch
According to Herr, when FPE informed the city of the new facility standards adopted by the MLB, Sigal made no written financial demands. According to the suit, FPE communicated their demands directly to the city’s Community Services Director.
The Valley Voice could not determine who at the city is the Community Services Director as referred to in the suit and Herr said he would not comment.
“City’s efforts to resolve this dispute through direct negotiations between City and FPE, along with mediation with an agreed upon mediator have failed,” a statement from the City of Visalia read.
In a December 6, 2021 agenda item, the Visalia City Council received an update from the city’s Community Services Department that hinted at the impasse; the item named Jeremy Rogers as the Community Services Director at the time of the presentation.
“Major League Baseball is making several changes that will affect our ballpark over the next several years. Our clubhouse, outfield fence, and stadium lighting are not up to the new standards and will have to be updated if the City wants to keep professional baseball in Visalia. There will be more coming on this over the next few months,” the background discussion section reads.
Sigal confirmed that mediation had taken place but could not divulge anything that was discussed. But he said that if an offer to resolve the problem had been forthcoming by either side during mediation that he found favorable, there was no one from the city present with the decision making powers who could have agreed to bring that offer to the city council.
As a result of the failed mediation the city took the next step.
“Rather than waiting to be sued and spending substantial sums on protracted litigation, City seeks a speedy judicial declaration of the respective rights and obligations of the parties to the Lease,” the city said.
Sigal, for his part, thanks the community for its support.
“Visalia’s small businesses are resilient and the Rawhide has faith in its cause. The Rawhide thanks it’s amazing fans and the community for their continued support,” he told the Voice.