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LETTER OF INTENT FROM THE PHILLIES I I RECEIVED AUG 0 7 2DUD tiOLLAND & I\NiGHr, LLP August 3, 2000 The Honorable Brian J. Aungst Mayor-Commissioner City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 34618 Re: Proposed Stadium Project Dear Mayor Aungst: This is a letter of intent setting forth in very basic terms the framework for an agreement to be negotiated between The Phillies, a Pennsylvania limited partnership, doing business as the Major League Baseball Club known as the Philadelphia Phillies (the "Phillies") and the City of Clearwater, Florida (the "City") regarding the planning, designing, financing, development and construction of a new baseball stadium and ancillary facilities and improvements that can be used by the Phillies for professional baseball games and practices and other appropriate events (the "Project"). It is our understanding that Pinellas County has established a schedule for consideration of the use of tourist development funds to pay some ofthe costs ofthe Project that requires some documentation of the intent of the parties. At this point we are very early in the process for establishing the terms of any definitive agreement between the Phillies and the City for the development and use ofthe Project. Nevertheless, in the interest of moving forward with the planning for the Project, the Phillies are prepared to expeditiously negotiate such an agreement with the City and at this time to agree on the framework for proceeding and the broad outline of the relationship between the City and the Phillies as we go forward. Subject to further discussions, negotiations and preparation and approval, execution and delivery of definitive agreements (including in respect of the financing and the appropriate location for the Project), the Phillies and the City agree as follows: The Phillies -Veterans Stadium -P.O. Box 7575 -Philadelphia. PA 19101 Executive Offices: (215) 463-6000 -Sales Office: (215) 463-5000 -Ticket Office: (215) 463-1000 C tJ~!/ 1'~CC) ~. ) }., \1 ~ / f 00'" f,/ I I The Honorable Brian J. Aungst August 3, 2000 Page 2 1. Use ofProiect. The Phillies commit to using the Project for the spring training activities of the Major League Baseball club, including playing exhibition baseball games, for a period that will be sufficient to satisfy the requirements of the legislation recently approved by the Florida Legislature and the Governor that provides state funds to pay some of the costs of a project such as this. 2. Planning & Designing the Proiect. The Phillies and the City will cooperate with each other in the planning and design of the Project, including the programming for the Project, the selection of design professionals, and the design of the Project. The precise relationship and role of the two parties will be determined through negotiation of a development agreement for the Project. 3. Financing the Proiect. It is our understanding from discussions with City officials that the Project will be financed through a combination of sources. Funds from the State of Florida received through the recently enacted spring training facilities legislation will total Five Hundred Thousand Dollars ($500,000) per year for 30 years to pay some ofthe development cost ofthe Project. Pinellas County will provide a net Seven Million Dollars ($7,000,000) ofthe development costs from tourist development funds. Finally, the City and the Phillies will provide the remaining amount necessary to complete the Project, which shall be Seven Million Dollars ($7,000,000) or more. The nature and extent ofthose revenues will be negotiated between the Phillies and the City and included in the definitive use agreement. 4. Pinellas Suncoast Promotion. The Phillies recognize that the source of funds from Pinellas County to partially finance the costs ofthe Project will be derived from the tourist development tax collected from those individuals who stay in hotels, motels and other transient occupancies in the county. Accordingly, the Phillies acknowledge that to continue the viability of that funding source it is imperative that individuals continue to stay in hotels, motels and other transient occupancies to provide such tourist development tax revenues. The Phillies acknowledge that marketing and promotion of the Pinellas Suncoast is necessary to maintain this source of revenue. To help accomplish that, the Phillies agree that, subject to the terms ofa definitive agreement and existing contractual obligations, advertisements promoting the Florida Suncoast may be included in programs for Phillies' spring training and regular season baseball games, electronic message board advertising in the spring training and regular season stadiums and time on Phillies' radio and television broadcasts, at levels to be negotiated. The broad outline ofthe relationship between the City and the Phillies and the respective responsibilities of each set forth herein is acceptable to the City and the Phillies as a basis for determining the terms of a definitive agreement between the parties. Acceptance ofthe terms set forth herein by the parties is subject to the negotiation, approval and execution of a definitive use ~ , I The Honorable Brian J. Aungst August 3, 2000 Page 3 agreement and agreement for the development of the Project which will address these and other matters in more detail and will address additional matters not included herein. The delivery of this letter does not constitute an offer by the Phillies and acceptance and approval by the City does not constitute an acceptance of any offer by the Phillies, and such actions do not constitute, result in or be deemed to have created a contract between the parties. The intent ofthis letter is to establish the basic terms of an agreement to be negotiated between the parties. Upon acceptance of this letter by the City, the parties will proceed expeditiously to diligently commence negotiation of definitive agreements to be presented to the parties in the near future and before the deadline for filing an application with the State of Florida for state funds for the Project. The Phillies have enjoyed a long standing cordial relationship with the City and the people of Clearwater and we look forward to a mutually beneficial and enjoyable relationship that will keep professional baseball in Clearwater for many years to come. Sincerely, !~o:?::~7 President & CEO ACCEPTED BY: CITY OF CLEARWATER, FLORIDA Bri~.Au-J# ~ Mayor-Commissioner ATTEST: " ~. ;f1~ .~