Padres Expect New Lease to Underline Commitment

The collapse of efforts to sell the San Diego Padres opened the way Friday to resume talks between the city and the team on a new lease that the Padres’ attorney says will “leave absolutely no doubt” that the team will remain in San Diego.

However, because of uncertainty over new league guidelines governing stadium leases, it was unclear Friday whether the new contract would extend to the 21st Century, as the city prefers, or perhaps might cover as few as five years--a prospect that a top city official termed “extremely troubling.”

In announcing that she had abandoned her plan to sell the Padres to Newport Beach businessman George Argyros, Padres owner Joan Kroc said Friday that her top priority now is signing a new lease “so there will be no more speculation” that the National League team might be relocated when the current lease expires after the 1988 season.

“Our first priority is to negotiate a new lease with the city. That is No. 1,” Kroc said at a news conference at San Diego Jack Murphy Stadium. “I want this community to be assured that whatever happens in the future . . . this team will not leave San Diego. I promised you that. I’m reiterating that promise, and now it’s going to be signed, sealed and delivered.”

The two sides began lease negotiations last year and were nearing agreement last month when the talks were suspended on orders from National League officials, who insisted that Argyros not participate in or even monitor the negotiations until after he sold the Seattle Mariners, an American League team.

“Things were moving along well until the league put the squelch on our talking,” San Diego Deputy City Manager Jack McGrory said. “Mrs. Kroc’s commitment to Mr. Argyros was that he could review the lease, but then the National League said that he couldn’t have anything at all to do with the Padres until he sold his other team. That in effect put an end to our negotiations.”

Argyros’ inability over the past two months to sell the Mariners--a prerequisite for his purchase of the Padres because of rules forbidding an individual from owning more than one professional baseball franchise--resulted in Friday’s termination of his bid to buy the Padres.

McGrory said he hopes to “pick up where we left off” when the lease negotiations resume in mid-June, and predicted that a final contract could be signed within 45 days.

Padres’ general counsel Beth Benes, however, said she could not predict how long it might take to wrap up the talks, adding, “Progress had been made, but obviously differences remained or a contract would have been signed already.”

The city is seeking a lease that would expire in the year 2000, thereby running concurrently with a separate pact between the city and the Padres concerning revenues from the stadium scoreboard.

New Guidelines

Though the Padres are amenable to such a long-term lease, Benes expressed concern that new guidelines from baseball Commissioner Peter Ueberroth’s office might permit a maximum lease duration only about half as long as the city wants.

“Five to seven years is the guideline I’ve heard,” Benes said.

McGrory said that he had not heard of the new guidelines until Benes mentioned them to him on Friday. But if the commissioner’s policy would preclude the new San Diego lease from extending through the year 2000, “We’d have some real serious concerns about that,” McGrory said.

However, there was considerable confusion Friday over the new policy. In fact, neither Benes nor McGrory was certain about whether the policy is even in effect yet or about how it might affect the San Diego negotiations. Benes plans to talk to officials in the league and commissioner’s office within the next several weeks to clarify the new guidelines.

“Nothing’s very clear right now,” Benes said. “I don’t know if this is a written policy or what. That’s why we need to talk to them to try to get some clear direction.”

Officials in the National League and commissioner’s office could not be reached for comment late Friday.

Benes emphasized, though, that Kroc “still is absolutely determined” to keep the Padres in San Diego. If Kroc attempts to sell the club in the future, she will continue to insist, as she did during the now-aborted Argyros deal, that the team remain here and reject any offers from bidders intent on moving the Padres elsewhere, Benes said.

Legal Leverage

To provide the city with added legal leverage to ensure that the Padres remain in San Diego for the duration of the new lease, the city wants a clause to that effect inserted in the contract. Even though the new lease would, on its face, bind Kroc or any owner to keep the Padres here, a clause flatly stating that the team cannot be moved would serve as an added safeguard, McGrory said.

“If you don’t have that specific language and the owner breaches the lease by moving out, the best the city could probably get is money damages,” McGrory said. “We’re looking for something that would give us the ability to get an injunction to prevent them from leaving in the first place.”

Under the city’s current 20-year lease with the Padres, the city receives 8% of all ticket revenue, $1.75 of each $2 parking fee and 10% of cable television and catering revenues--a formula that produces about $2.5 million annually for the city, based on a projected 1.8-million attendance figure.

Beyond keeping the Padres in San Diego, the city’s other overriding goal in the new lease, McGrory explained, “is maintaining that revenue stream at at least the current level.”

“We’re already subsidizing the stadium by about $1 million a year, and the city is not in a position where we can afford to increase that subsidy,” McGrory said. “If anything, we’d like to see it come down.”