As Katz says, this is how it should be done- excerpt: In 2010, when Fundamental bought the municipal bonds used to build the stadium, attendance had declined and the stadium’s owner at the time was in default on its debts. With a focus on investments in distressed municipal debt, Fundamental bought the bonds at a steep discount and began investing in upgrading the park to increase ticket sales. As the stadium’s largest creditor, Fundamental was looking for ways to stabilize the stadium’s business and earn a return on its investment. The minor league team that plays at the stadium, the Redbirds — and their major league affiliate the St. Louis Cardinals — are beloved in Memphis, while the ballpark is considered vital to the city’s downtown rebuilding efforts. Fundamental’s ultimate strategy involved finding buyers for both the ballpark and the Redbirds. The city borrowed new money in the municipal bond market to purchase the stadium for about $19 million. The city used proceeds from the recently issued bonds to pay off the debt owned by Fundamental. As part of the deal signed on Friday, the St. Louis Cardinals agreed to pay Fundamental about $15 million to buy the Redbirds, one of their farm teams. “This isn’t your typical private equity play of levering up an asset and letting the public markets take it out,” said Laurence L. Gottlieb, a former Citigroup municipal debt trader who co-founded Fundamental in 2007. “This asset touches the community in a very meaningful way.” Until it hit a rocky patch, the park had come to symbolize the city’s efforts to reverse generations of “white flight”— predominately white residents fleeing Memphis for the suburbs, said the city’s mayor, A C Wharton Jr. “There are white families who claimed they would never go down into downtown Memphis,” Mr. Wharton said. “But the one thing they don’t have in the suburbs is a minor league baseball stadium.” dealbook.nytimes/2014/03/28/memphis-and-cardinals-partner-in-deal-to-revitalize-ballpark/?_php=true&_type=blogs&_r=0
Posted on: Sat, 29 Mar 2014 14:08:34 +0000
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