June 3, 2010

Stadium authority owed $1.8 million by Orioles, others

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By Erich Wagner
Erich@MarylandReporter.com

The Maryland Stadium Authority hasn’t collected $1.8 million in outstanding bills from its tenants, including more than $800,000 from the Baltimore Orioles, according to a state audit released Thursday.

The authority’s contract with the Orioles requires that the team pay 25 percent of its advertising revenue from Oriole Park at Camden Yards to the state, auditors said. But the team has argued that certain advertising revenues are not subject to rental payments.

“At the end of the season, the parties met, along with counsel, to discuss collection of the rent deficiency, among other lease issues,” the authority said in a response to the audit. “At a meeting dated September 23, 2009, MSA repeated the request for payment from the tenant, based upon the advertising signage.”

Michael Frenz, executive director of the stadium authority, said the agency’s board has approved a settlement with the Orioles, but he could not elaborate on the details because of legal and privacy concerns. He said the settlement still needs approval by the Board of Public Works.

“[The Orioles] were not just saying, ‘We’re not going to pay you,'” Frenz said. “They had a reason for doing that, and we tried to work with them about it.”

The Orioles declined to comment on the matter.

The audit said the stadium authority had not done enough to try and collect on the $812,000 bill, and that the agency has not adequately pursued nine other outstanding balances, as required by state Central Collection Unit regulations.

“According to MSA’s records, rental payments made to MSA by the tenant for calendar years 2007 and 2008 totaled approximately $12.6 million,” the audit said

But the stadium authority said it was meeting with the tenant to try to settle the account, and that they want to avoid taking legal action as much as possible.

“Under the terms of the lease between the parties, arbitration is the exclusive legal remedy available to MSA for this dispute,” the authority said. “In the past, such arbitration proceedings have proven to be expensive, burdensome and with uncertain outcomes for the State. As a result, to date, MSA has made a concerted effort to resolve this dispute in lieu of arbitration.”

The authority agreed to implement the Central Collection Unit regulations. It said it has designated an employee to be responsible for the collection of outstanding bills, and will consider “outsourcing the collections of Accounts Receivable.”

The Maryland Stadium Authority is a public corporation created to construct and maintain stadiums, convention centers and other entertainment venues. It was involved in the construction of Oriole Park and M&T Bank Stadium, as well as the renovation of the Hippodrome Theater in Baltimore.