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Mecklenburg County Notice Of Intent To Lease Property To Knights Baseball, LLC

On December 18, 2007, the Mecklenburg County Board of Commissioners adopted a Resolution declaring its intent to enter into a long-term lease agreement with Knights Baseball, LLC for the operation and maintenance of a baseball stadium on County property located at 300 South Mint Street and 416 West 3rd Street, Charlotte, North Carolina.  The purpose of this notice is to generally describe the property involved, the nature of the interest to be conveyed, and all of the material terms of the proposed transaction.  Because of the length of the proposed Lease Agreement, it is not practical to list all of the provisions; however, a copy of the full Lease Agreement can be obtained from the Office of the Clerk to the Board located on the 11th floor of the Charlotte-Mecklenburg Government Center, 600 East 4th Street, Charlotte, NC.  The following is a general description of the proposed transaction:

The Property:

Location:
300 South Mint Street and 416 West 3rd Street, Charlotte, North Carolina (bounded by South Graham, South Mint, West Martin Luther King, Jr. Blvd., and West Fourth Streets)

Acreage:
Approximately 7.8 acres

Nature of Interest to be Conveyed:

Lease:
Leasehold estate having an initial term of forty-nine (49) years

Rent:
One and No/100 ($1.00) per year

Option to Renew: 
Two (2) consecutive renewal periods of twenty-five (25) years each

Special Early Termination:
Allowable if the Stadium is not substantially completed before the conclusion of the Knights' 2011 baseball season or if paid home games attendance for two consecutive Knights baseball seasons, after seven seasons of play at the Stadium, is less than 430,000 in each of such consecutive seasons

General Description of Material Terms:

Primary Use of Property:
Hosting Professional Baseball Games in the Stadium

Secondary Use of Property:
Other development to promote street level activity in the area around the Stadium, which may include residential development

Cessation of Primary Use:
All rights in the Stadium Site and ownership of the Stadium Project shall revert to the County upon termination of the Lease; provided, however, the Secondary Use shall at all times be permitted

Construction and Maintenance Obligations:
Knights Baseball, LLC is responsible for the construction, maintenance, and repair of the Stadium and any other improvements to be constructed on the Stadium site.  
 
Covenant to Play:
All Home Games except exhibition and up to five (5) Home Games shall be played in the Stadium as long as it is in a tenantable condition

Non-Relocation Period:
Except for the purpose of attracting a sanctioned Major League Baseball franchise to the Charlotte market, Knights Baseball, LLC must play professional baseball in the Stadium throughout the period of time from the first Triple-A Baseball game until Mecklenburg County makes the final Economic Grant payment to Knights Baseball, LLC

Non-Relocation Default:
If Knights Baseball, LLC violates the covenant to play or modifies its Minor League Baseball Membership or Franchise such that professional baseball is no longer played in the Stadium, except for the purpose of attracting a sanctioned Major League Baseball franchise to the Charlotte market, Mecklenburg County can recover a portion of the Economic Grant payment (as liquidated damages) and/or terminate the Lease   

Article 17 Default:
If Knights Baseball, LLC causes one or more of the following default events, Mecklenburg County can terminate the Lease and/or retake the site:

  • Failure to pay rent or other sums of money payable;
  • A Non-Relocation Default
  • Failure to complete Infrastructure Improvements
  • An Event of Default under the Development Agreement not remedied within any applicable cure period;
  • Any other expressly designated Event of Default;
  • Failure to act to remedy its non-performance within 60 days after receipt of a written notice from the County;
  • Proceedings related to bankruptcy or insolvency if the proceedings are not set aside within 60 days

Demolition Obligation:
If the Lease is terminated prior to substantial completion of the Stadium Project, Knights Baseball LLC will be responsible for restoring the Stadium Site (meaning that it will remove all improvements and restore the site to its previous undeveloped condition)  and, if required by the City of Charlotte, for restoring Third Street

Exculpation:
In the face of particular judicial or administrative proceedings, Knights Baseball, LLC has the option to perform all its obligations under the Lease Agreement and, in the event of its non-performance, pay all of the County's legal fees or waive the requirement of a final non-appealable order of a court of competence jurisdiction, pay the County's legal fees incurred up to the time of the waiver and grant exculpation to the County. 

Property Taxes:
Knights Baseball, LLC will pay all real and personal property taxes assessed against the site and all  improvements located thereon as well as all personal property associated therewith.

Insurance:
Knights Baseball, LLC will obtain and maintain property, commercial general liability, workers' compensation, personal property, automobile, boiler, and liquor liability  and/or excess/umbrella insurance policies during the Term of the Lease

Assignment:
Knights Baseball, LLC is permitted to assign its interest in the Lease or sublet all or a portion of the site (i) to an Affiliate without County approval, or (ii) to any other Person approved by Minor League or Major League Baseball without County approval unless such Person has committed an act causing public hatred, in which event the County has approval rights of the transfer. 

Non-Subordination:
This Lease is a non-subordination ground lease: it will at all times be superior to any financing secured by Knights Baseball, LLC

Substantial Completion:
It is intended that Substantial Completion of the Stadium occurs no later than the opening of the 2009 baseball season but not later than July 1, 2012 

The Board of Commissioners will consider whether to approve the Lease Agreement during its January 2, 2008 meeting to be held in the Meeting Chamber at the Charlotte-Mecklenburg Government Center, 600 East 4th Street, Charlotte, NC, having indicated its intent to do so at its December 18, 2007 meeting.  Anyone wishing to obtain additional information about the proposed Lease Agreement may contact Bobbie Shields, County Manager's Office, General Manager, by telephone at (704) 336-2606 or Marvin A. Bethune, Mecklenburg County Attorney, by telephone at 704-377-1634 during normal business hours.
 



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