Billings could host non-baseball events on 15 dates under latest Mustangs lease proposal

March 15, 2017

Billings could have 15 dates a year to schedule non-baseball events at Dehler Park under its latest 10-year lease proposal with the Billings Mustangs.

A city council committee negotiating the lease with the team’s owners met one last time Tuesday to finalize the proposal ahead of a March 22 call with the team’s managing partner, Dave Heller.

The latest proposal calls for the city to receive 15 dates each year between May 1 and Sept. 30 to schedule non-baseball events at Dehler Park, including at least three consecutive days during the months of June, July and August.

The committee also heard by telephone from the city’s bond counsel, Erin McCrady, a partner in the firm Dorsey & Whitney. McCrady is advising the committee on conforming with Internal Revenue Service rules governing the bond issue’s tax-free status.

Additional revenue from sources like naming rights can jeopardize the tax-free status of the bonds that were issued in 2007 to construct the ballpark. With the help of the city’s financial adviser, St. Paul, Minnesota-based Springsted, McCrady calculated that the city would still be in compliance with IRS regulations while receiving about $95,000 per year over the next 10 years for the rights to, for example, renaming the field itself, or through scoreboard sponsorship.

The park will retain the Dehler name through June 26, 2032.

By waiting longer to receive any additional naming rights or advertising income — say, between the years 2022 through 2027 — the city could receive about $185,000 per year before raising the attention of IRS regulators.

“We don’t want to advise the city to turn down naming rights that are very beneficial to the city,” McCrady said. If the right advertising and naming rights deal came along, the city council could decide to refinance the bonds on a taxable basis or pay off the bonds “so you don’t have to turn down that cash,” she said.

After hearing from McCrady, the committee — council members Shaun Brown, Dick Clark, Chris Friedel and Larry Brewster — discussed proposed lease changes with City Administrator Tina Volek, City Attorney Brent Brooks and Parks and Recreation Director Michael Whitaker, along with Councilman Al Swanson.

The committee decided to leave blank the percentage of the field naming rights — not the ballpark itself, but the field, as is done at other ballparks — after disagreeing over whether it should be 15 or 20 percent or some other number.

Both sides have said they’re close to agreeing to the new lease, and Brown said the sooner, the better.

“There is a point where you can be hard-nosed, and there’s a point where the guy (Heller) can walk away,” Brown said. “We’ve got to entice the guy to play ball here. This is a businessman. We just need enough to cover our cost.”

The March 22 telephone meeting with Heller will begin at 3 p.m. in the conference room at City Hall, 210 N. 27th St.