Council Statement: Clarification Regarding Lease Agreements with Sports Teams

When St. John’s Sports and Entertainment Limited (SJSEL) is negotiating lease agreements for the use of Mile One, part of its role is to ensure that SJSEL, the City, and residents are not held responsible for the debts of external groups, such as sport teams.

Misinformation is currently being circulated in the media, and it is important to clarify that the City did not change language in the Lease that referred to the obligations of the Teams. The idea that new language was slipped into the draft agreement is untrue.

The Teams may or may not have had their own agreements related to their partnership, but SJSEL and the City are not privy to those. The Teams’ debts and liabilities are not the responsibility of SJSEL or the City.

In November 2018, the Board of SJSEL and the City signed a Lease with Atlantic Sports Enterprises Limited (ASE) and Deacon Investments Limited (DSE), for the 2018-2019 season. A copy of that Lease is available here. This Lease with the Teams contained language about joint and several legal obligations. Joint and several obligations means that SJSEL and the City were entering into an agreement with both teams who would share in the profits and obligations jointly. If they failed in their obligations, then SJSEL and the City could seek a remedy from either party. The terms of the Lease were accepted by all parties.

In September 2019 the Teams, SJSEL and the City reached an Agreement in Principle for a ten-year Lease. It was understood that all terms of the Lease would remain the same except for those that were changed in the Agreement in Principle. A revised Lease was sent to the teams which was amended to reflect the changes of the Agreement in Principle, such as the reduction of rent. A copy of the 2019 unsigned Lease is available here.

The Board of SJSEL, and Council have been fully informed of the details of both proposals. SJSEL and the City are eager to work with 2001 Investments Ltd. to launch a successful basketball franchise in our city. 

Councillor Jamie Korab
Chair, SJSEL
jkorab@stjohns.ca
576-8643