Lease Analogy For PawSox $6,000,000 Equity Contribution

 

Lets say you have some space you need to a build out for a beauty salon, but there is alot plumbing and electrical work.      You come to an agreement with the new tenant, that they will make a $3,000 equity contribution for the renovations.   

 One day the tenant shows up with $4,000 bill for a new sign and tells you they fulfilled their equity contribution and you owe the tenant $1,000.    Would you think that is fair????    

Of course not.    

We would have told the new tenant day 1 that they need to either:

  1. Give us a check for $3,000 or
  2. Get our approval, before they spend $3,000 to determine if it would be an acceptable "equity contribution". 
 


Now back to the PawSox $6,000,000 contribution, which we are being told that:

 "The equity contribution is allowed to be cash and/or direct purchases.   If you look at Exhibit F of the lease, you can see that the direct purchases made by the team has a current total of $11.4 million"

 

Here is our question.    At some point should not the PawSox have had to submit this for approval???      According to letter of intent    page 34


The Team will submit the Team Equity Contribution, less any Defined Equity Uses, in two equal payments due no later than December 31, 2019 and December 31, 2020, respectively, as a gift to the City Council, pursuant to M.G. L. Chapter 44 Sec. 53A, 

 


 

 

 

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