PORTLAND — The Cumberland County Civic Center’s Board of Trustees and owners of the Portland Pirates are staring at a possible courtroom showdown over whether an agreement reached in April constitutes a binding lease agreement.
The trustees’ negotiating committee and the American Hockey League franchise, which has called the Civic Center home for the past 20 years, failed to reach a final agreement on a proposed new five-year lease.
The team’s previous lease with the Civic Center expired last April, leaving the team without a home. Both sides had reportedly agreed to terms on a new five-year pact, but nothing was signed and the trustees have said the one-page document only allowed for continued negotiations on a final lease agreement, which needed the board’s final approval.
“The April 17th resolution was not signed by anybody,” said Neal Pratt, the board’s chairman. “It was a resolution that was passed to authorize the negotiating committee to enter into other good faith negotiations with the Pirates in hopes of reaching a lease agreement. There was nothing binding. It was a conceptual framework of a lease deal.”
Both sides continued to work toward a final lease until last week when the trustees sent the Pirates a final lease with a deadline attached for the team to respond. Team owner Brian Petrovek rejected the deal and cited two major sticking points during a press conference held last Friday at the team’s downtown office.
He said the trustees pulled the offer off the table and no longer wanted to negotiate any further, instructing the Civic Center staff to begin looking at options to fill dates vacated by the team. Petrovek added that if the arena went ahead with such a move he’d have to explore the team’s legal options and set Wednesday deadline for the board to return to the negotiating table.
In the April 17 “framework,” Civic Center trustees and the Pirates agreed to a 57½-to-42½ percent split of all food and beverage revenue — including alcohol, something the hockey team had long sought. However, while drafting the agreement, it was brought to their attention the plan to share alcohol revenue violated state law. According to the rule, the team is not allowed to profit from the sale of alcohol in the building because only the building owner is listed on the liquor license.
The trustees offered 65 percent of all food and beverage revenue not including the sales of alcoholic beverages, but Petrovek contends the loss of revenue from alcohol sales do not match the higher percentage offered by the board.
According to a February 2013 financial statement from the Cumberland County Civic Center, the arena earned $613,000 in gross food and beverage sales through the first eight months the 2012-’13 fiscal year, which is on pace with the previous fiscal year when the Civic Center earned $787,000 in gross food and beverage sales — of which about 70 percent of the sales came from food and non-alcoholic beverages and 30 percent from beer, wine and other liquor sold at the arena. That amount does not include subtracting sales tax and overhead concessionary cost.
Pratt has said that projected revenues used during the negotiations with the team have been estimates because they expect concessions to increase once the renovation of the building is complete. The arena is currently undergoing a $33 million dollar renovation, which includes adding suites, club seating and improving concessions, bathrooms and the back of the house, in hopes of attracting more acts to the 36-year old facility.
The other issue at hand between the board and team is how to define above-ice advertising. The Pirates will receive 50 percent of the net revenue for above-ice advertising, but what constitutes “above-ice” — and how to split that revenue — has both sides still at odds.
Current ownership and the trustees have had a strained relationship in the past while negotiating lease agreements, which led to the team threatening to leave the city. In 2005, the team was unable to work out a lease agreement and came within hours of signing a deal to relocate to Worcester, Mass., before settling on a five-year agreement. Again in 2009, the Pirates and Civic Center engaged in a drawn-out lease battle that nearly had the team on its way to Albany, N.Y., before an 11th-hour deal kept the team in Portland.
Wednesday, trustees met in executive session with legal counsel for more than three hours to discuss their next steps.
Pratt declined comment on the content of the meeting and didn’t specify if the trustees planned on reopening negotiations with the Pirates, but said the board is not scheduled to meet again until its regularly schedule meeting later this month.
Pratt also said that the purpose of the meeting was to be advised by legal counsel and to share feedback among the group. The Civic Center’s board retained the services of attorney David Barry from the Portland-based law firm Pierce Atwood.
“The board is digesting the advice that we received from counsel to understand our legal position better. Everyone left with a lot to think about,” Pratt said. “It was an opportunity to get the view of the board members in light of the circumstances.
“We’re confident that we’ve complied with our legal responsibility and in fact I think we’ve gone above and beyond.”
Pratt said they’ve not spoken to the Pirates since last week.
“We are where we were last week,” he said. “The difference is the Pirates are considering whatever legal option they feel they may have. That was a part of the discussion we had with our lawyer today.”
Petrovek did not respond for comment.
The Pirates open their season next month and are scheduled to play 13 games at the Androscoggin Bank Colisee in Lewiston.
The Civic Center is expecting to open in January, and if both sides are unable to reach a deal, the Pirates may be forced to play the entire season at the Colisee.
Petrovek has also said that if they’re unable to come to an agreement that it’s possible that the team could revisit building a new 4,500-seat arena in Saco near the team’s training facility.
To see copies of the documents cited in this story, and for more on Maine hockey, vist www.mainehockeyjournal.com.
Send questions/comments to the editors.
