Last May, on a 6-1 vote, the City Council approved a contract modification and extension for Cordish’s Exclusive Negotiating Agreement for a Symphony Park Arena. Here’s the meeting agenda – it is item number 58.
The first interesting document from this meeting is the minutes of the hearing, clickable here. Of particular note is at the top of page 2, end of the first paragraph:
(A city executive) clarified a local media report, in that the financing is already in place and the City Council is not being asked for additional funds.
Now we know this was not true. Maybe it was a lie told to city executives, we’ll never know. But it was important: several Council members mention the absence of public funding in their justifications for voting yes.
Here is the ENA “addendum” itself from that meeting. This is the document the Council voted 6-1 to approve on May 21, 2014. This is the actual contract currently in place between Cordish and the City.
In the first paragraph, briefly note that “Parties” is defined as the City, Cordish and Findley.
On page 3, the agreement reads:
(b)(i) No later than Sept 1, 2014, the New Development Team will submit a final term sheet (“Term Sheet”) for approval by the City Council.
Additional language defines elements of the Term Sheet that must be included – a feasibility analysis demonstrating the economic viability of the project, for example, and a site-specific environmental remediation report.
More on the “Addendum” from May: at the bottom of page 3 and top of page 4 is the most interesting language of all:
If the Term Sheet is not agreed to by the Parties by September 1, 2014 for submittal to City Council or is not approved by City Council if submitted to City Council, then the ENA and this Addendum, including the Extended Term, shall automatically expire and all obligations of the Parties shall automatically terminate.
This was the source of a technical interpretation from the lawyers at the 5:50 mark on our meeting videotape, online here, from September 2, 2014. A plain reading would indicate the deal was dead, since the Term Sheet was submitted to City Council and was not approved. However, the lawyers broke the language down into two parts, separated by an “or”:
1. The Term Sheet must be agreed to by 9/1. At the time, that was true.
2. If it is not approved by City Council if submitted to City Council. This condition was false.
The lawyers said that because the first condition was met, and the second condition was an OR, it didn’t matter that the council did not approve it. As long as the City Council could be prevented from voting the Term Sheet down, then the deal could go on forever. (See the video of our Sept. 2 meeting at the 5:52 mark online here.)
So now the advocates are double-flummoxed. It will be interesting to see what the next move is, because by submitting a new Term Sheet whose terms were not agreed to by the Parties until Sept. 25, the first condition is now false as well as the second. Even with the OR, the ENA has now automatically terminated.