The Jacksonville Armada soccer club kicks off its third season Sunday at a new venue- and there’s a question of whether that’s allowed under the team’s contract with the City of Jacksonville.
WOKV first told you back in late 2014 that the Jacksonville Armada FC signed a lease with the City to play its first three home season at the Baseball Grounds of Jacksonville, with the contract lasting through the end of 2017. The City paid $300,000 to make the field soccer-ready, including installing a retractable pitching mound, adding signage and camera positions, and more. The Baseball Grounds is also the home of the Jacksonville Jumbo Shrimp baseball team, formerly the Jacksonville Suns.
This past January, the Armada's owner, Sunshine Soccer Group, announced that the North American Soccer League- which the Armada plays in- would be taking over ownership of the team. In February, the Armada announced they would be playing this upcoming season at UNF's Hodges Stadium, instead of the Baseball Grounds.
A January 26th letter from the former owner of the Armada to the City proposes a “Letter of Agreement”, wherein the Armada says, because the NASL is taking over ownership, they can elect to conduct the 2017 season at another location. The letter says, if they do choose a different venue, it would not constitute a breach or default of their lease. The response from Jacksonville’s Office of General Counsel, sent January 30th, disputes that.
“The City does not agree that a failure of the NASL to conduct its 2017 season at the Facility would not constitute a breach or default under the License,” the letter says.
The lease agreement shows that the contract is binding on the successor of either the team or the City.
Potential contact dispute
Multiple records requests made by WOKV since the team’s announcement they would move to a new venue have shown no formal written communication between the parties on this matter since. A City of Jacksonville spokesperson confirms the City maintains the position expressed in the letter to this day, but declined any further comment, including whether the City was considering any kind of action against the team as a result of this disagreement. The Armada and the NASL also declined requests for comment from WOKV about the status of the lease with the City of Jacksonville.
Per the team’s lease at the Baseball Grounds, the Armada is allowed to terminate the lease without penalty if the City fails to fulfill its material obligations in a timely manner, if the NASL cancels a league season or terminates the league, if the Armada elects to end as a franchise, or if the Armada moves to another City-owned or funded soccer facility. None of those scenarios appear to fit the current circumstances.
The correspondence between the parties indicate that the Armada doesn’t necessarily want to end the lease outright. After the initial three year term, there are five additional one-year extensions possible. The Armada’s letter to the City expressly sought to ensure that right was intact. The City also expressed a desire to work together moving forward.
“The City remains supportive of the Armada and to the extent an alternative location is sought to serve as the Armada’s home field, the City is open to discussion with SSG and the NASL as to how it may assist in those efforts,” says the letter from Jacksonville’s General Counsel to the Armada.
The facilities use agreement between the Armada and UNF lasts only through the end of 2017, and there are no expressly stated extension options.
There are also terms under which either the City or Armada could be in default of the lease, including failure to pay required sums, failure to perform required duties or fulfill contract conditions, or bankruptcy. The non-default party could cancel the agreement, recover damages, or seek other remedies, according to the contract.
The Baseball Grounds contract investments and profits
In addition to the initial $300,000 investment the City paid to make the venue capable of accommodating soccer- while under the impression it would be used for that for at least three seasons- taxpayers are contractually obligated to pay up to $700,000 each season toward the cost of converting the field between baseball and soccer. Budget documents confirm that allocation has been made each of the last two years.
The City is additionally responsible for funding utilities during the games, cleaning of the facility, and “normal and routine” repairs. The City provided personnel to operate the facility- including ticket takers, security, and more- but the Armada paid for those services. SMG would provide the personnel, acting as the City’s event management company.
It wasn't all about expenses, though. The City made between $4,000 and $10,000 each game from a ticket fee paid by the Armada, with the total based on the ticket sales. The City also collects a ticket user fee from a surcharge on all seats. That surcharge was $0.50 at the time the contract was signed, but increased to $2.50 by City Council action in January of this year.
The Armada got to keep the profit from merchandising, signage, advertising as well as parking lot fees for soccer events, although they were also responsible for the operating expenses connected to the lots. They also received all of the City’s share of concession profits for soccer events, with the total profit split with the baseball team, per that team’s pre-existing lease.
The UNF agreement
The new agreement between the Armada and the University of North Florida to play at Hodges Stadium was executed just this week, although the agreement obtained by WOKV shows it’s effective March 21, 2017 through the end of this year. The team is paying UNF $180,000 to use their facilities, but the University is not imposing any user fees or charges on team revenue, including a ticket surcharge. The University is collecting parking.
Also unlike the City lease, the Armada agreement with UNF requires the team to furnish game day staff- like ticket takers- in addition to paying for them. SMG confirms to WOKV that they are not providing services for the Armada at UNF, as they do for the City at the Baseball Grounds. SMG deferred any other questions to the City.
Similar to the City lease, the University is paying for utilities on game days and must keep the facility in good working order, and the Armada can keep revenue from merchandising and advertising. Concession commission is split between the two entities.
UNF had no further comment regarding the agreement signed with the soccer club
Moving forward
WOKV has been digging through contracts and other documentation since the Armada announced they would not be playing at the Baseball Grounds for this third season. With neither the team, the team’s owners, nor the City willing to comment about whether they anticipate a formal dispute over the lease, we took these questions to City Council Finance Chair Anna Lopez Brosche.
“The actual cost of conversion was much, much more than originally estimated,” she says.
Lopez Brosche wasn’t aware of the contract questions until they were brought forward by WOKV. Her research after that found that, while the City was covering up to $700,000 each season to convert the field between baseball and soccer, the total conversion cost was exceeding that, leaving the team to pick up the difference. She says the team moving to a new home field appears to present the opportunity for the Armada to avoid those substantial conversion costs and for the City to no longer face a $700,000 annual bill.
“If they’ve got a new solution for themselves, and the city is not going to incur it’s cost from a field conversion perspective, it’s probably a win-win,” says Lopez Brosche.
Because of that, she doesn’t expect anything will evolve in terms of the City pursuing any potential breach of contact. The door is also still open for the team to return to the Baseball Grounds, if the lease is extended.
The season opener for the Armada is 4PM Sunday at Hodges Stadium at UNF against FC Edmonton.