CAUSE NO.

153-252201-11

RANGERSBASEBALLEXPRESSLLC § §

Plain tiff, §

§

v. § §

BALLPARK REAL ESTATE L.P., §

§

Defendant. §

IN THE DISTRICT OF

TARRANT COUNTY TEXAS

153rd DISTRICT COURT

DEFENDANT BALLPARK REAL ESTATE L.P. 'S RESPONSE TO PLAINTIFF'S APPLICATION FOR TEMPORARY RESTRAINING ORDER

Defendant Ballpark Real Estate, L.P. ("Ballpark Real Estate") files this response to

Rangers Baseball Express LLC's ("RBE" or "Plaintiff') Application for Temporary Restraining

Order and would respectfully show as follows: 1

I. INTRODUCTION

Ballpark Real Estate has at all times made commercially reasonable efforts to negotiate

an agreement with RBE to provide the Rangers with parking during the 20 11 baseball season.

Ballpark Real Estate first initiated contact with the Rangers in January 2011 more than two

months before the start of the baseball season to begin discussions regarding a long term

parking solution with RBE. Since that time, Ballpark Real Estate has diligently tried to come to

tenns with RBE on a lease that provides Ballpark Real Estate with fair market value for its

valuable property rights relating to land adjacent to the Texas Rangers Ballpark in Arlington (the

"Property").

1

Ballpark Real Estate will file a separate response to RBE's application for temporary injunction and an answer to RBE's petition at a later date.

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Throughout the negotiation process, Ballpark Real Estate has assured RBE that it "d[oes] not want to interfere with the operation of the Ballpark," and that its only goal is "to be compensated fairly" for the Rangers' use of the Property. See Plaintiffs Original Petition ("Petition"), Exhibit F. Ballpark Real Estate's goal remains the same today. As recently as March 28, 2010, Tom Hicks had a conversation with Nolan Ryan during which Mr. Hicks communicated his desire to reach an agreement that was fair to both parties. Moreover, Ballpark Real Estate agreed to enter into an "Interim Arrangement for Parking Operation" (the "Interim Agreement") the very next day, on March 29, 20 11, which gave RBE the right to operate the Property "in a manner consistent with past practices" while the parties were conducting lease negotiations. Petition, Exhibit H.

Despite these facts, and the fact that the parties have made significant progress in their negotiations, RBE chose to file suit against Ballpark Real Estate on April 12, 20 11, a day before the parties' Interim Agreement was set to expire. RBE's Petition asserts causes of action against Ballpark Real Estate for breach of contract and tortious interference with contract, and seeks both a temporary restraining order and a temporary injunction preventing Ballpark Real Estate from interfering with the operation of the Property. The Petition accuses Ballpark Real Estate of "despicable" conduct and trying to "price gouge" the Rangers. Petition, ,,20 and 25. These allegations are simply not true. RBE makes millions of dollars in revenue through the use of the Property, and Ballpark Real Estate has done nothing more than negotiate for a lease agreement that provides it with fair market value for the use of the Property.

With this objective in mind, after Ballpark Real Estate received notice of this lawsuit, it informed RBE that it was willing to extend the parties' Interim Agreement so that the parties could continue their negotiations. See Email attached hereto as Exhibit A. Ballpark Real

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Estate's offer to extend the terms of the parties' Interim Ageement would accomplish RBE's stated objective of maintaining the status quo. RBE, however, refused Ballpark Real Estate's proposal. Given this refusal, it is clear that RBE's application for a temporary restraining order

is not designed to maintain the status quo, but rather to have the Court decree by fiat a contract that has not been agreed to by the parties and that RBE is not entitled to obtain through any means other than arm's length bargaining with Ballpark Real Estate. Despite RBE's refusal to extend the Interim Agreement, Ballpark Real Estate remains willing to use commercially reasonable efforts to reach an agreement that is fair to both parties. In addition, Ballpark Real Estate intends to honor its commitment to not interfere with the Rangers' parking operations while negotiations are ongoing. For these reasons, and those described in more detail below, the Court should deny RBE' s request for a temporary restraining order.

II. FACTUAL BACKGROUND

A. The Land Use Agreement

On May 20, 2010, Ballpark Real Estate and Texas Rangers Baseball Partners ("TRBP"),

the former owner of the Rangers, entered into an agreement styled "Memorandum of Land Use Agreement" (the "LUA") that was intended to govern TRBP's use of the Property for parking during Rangers games. Petition, Exhibit A. The LUA was executed at a time when TRBP and Ballpark Real Estate were affiliated entities with common ownership and, as a result, Ballpark Real Estate did not receive fair market value for the Rangers' use of the Property during the term of the agreement. Given their affiliation, Ballpark Real Estate provided TRBP with favorable financial terms that allowed TRBP to provide artificially low parking rates in order to drive attendance at the Ballpark.

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Subsequently, RBE acquired the Rangers out of bankruptcy in a transaction that did not

include the acquisition of the Property. 2 Because it was not acquiring the Property, or Ballpark

Real Estate's right relating to the Property, in connection with its acquisition of the Rangers,

RBE knew that it would need to negotiate a long term parking solution with Ballpark Real

Estate. RBE was aware of the terms of the LUA when it purchased the Rangers and that the

LUA did not provide Ballpark Real Estate with fair market value for the Rangers' use of the

Property. In addition, RBE knew that Ballpark Real Estate had the right to terminate the LUA

after the 2010 baseball season. As such, RBE's representation that it was surprised by Ballpark

Real Estate's decision to terminate the LUA is unavailing.

B. Ballpark Real Estate's Attempts to Initiate Discussions with RBE Regarding aNew Lease Agreement

Ballpark Real Estate first initiated contact with RBE regarding the negotiation of a long

term parking solution for events at the Rangers' Ballpark in Arlington in January 2011 more

than two months before the start of the 2011 baseball season. Specifically, Tom Hicks had a

telephone conversation with Chuck Greenberg, the former Chief Executive Officer of RBE,

during which the parties discussed the need to establish a long term plan for Ballpark Real Estate

to provide the Rangers with use of the Property.'

On February 10, 2011, Mr. Hicks sent Mr. Greenberg a follow-up letter reiterating

Ballpark Real Estate's desire to negotiate a long term plan and informing Mr. Greenberg that

Ballpark Real Estate was considering terminating the Agreement. Petition, Exhibit C. Five days

2

Originally, TRBP and RBE contemplated that RBE would purchase the Property along with the team, but the parties elected to remove the land from the deal after receiving criticism for TRBP's Chief Restructuring Officer, William Snyder.

3

The Parties' negotiations involve more than parking issues, as the Rangers maintain their physical plant and medical bay on the Property.

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later, on February 15, 2011, Ballpark Real Estate notified RBE that it was terminating the

Agreement. Petition, Exhibit D. Despite RBE's representation to the contrary, Ballpark Real

Estate's decision to terminate the LUA was completely independent of Rangers' February 9,

2011 press release regarding parking prices, as Ballpark Real Estate was caught by surprise when

the Rangers made their announcement. 4

c. The Parties' Lease Negotiations

On February 25, 2011, RBE responded to Ballpark Real Estate's letter terminating the

LUA. Petition, Exhibit E. In its response, RBE noted that it was "quite surprised" by the fact

that Ballpark Real Estate had terminated the LUA so close to the start of the baseball season,

despite Ballpark Real Estate's first initiating contact with RBE regarding a new parking

arrangement in mid-January 2011. Id. RBE's letter also made clear that it believed "the best

indication of 'fair market value' ... [was] the existing arrangement" and stated its belief "that

the CUI1'ent arrangement [was] above fair market value." Id. (emphasis in original).

On February 28, 2011, Lori McCutcheon sent RBE a response letter on behalf of

Ballpark Real Estate. In her letter, Ms. McCutcheon made clear that Ballpark Real Estate had

been "trying to have a meaningful discussion with the Rangers about parking since mid-

January" a month before it sent the notice of termination. Petition, Exhibit F. Additionally,

Ms. McCutcheon explained that the LUA was not an appropriate indicator of the fair market

value of the Rangers' use of the Property as it was entered into at a time when Ballpark Real

Estate and TRBP were affiliated entities with common ownership. Id. Ms. McCutcheon

reiterated that Ballpark Real Estate "remained interested in pursuing a lease transaction with the

4

On March 30, 2011, Ballpark Real Estate informed the City of Arlington that it "intend[ed] to honor [the Rangers'] pre-sold parking passes, so that baseball fans with those passes may park in the BRE parking areas, at not additional costs to the fans." See Letter attached hereto as Exhi bi t B.

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Rangers for 2011, or a longer term." Id. Moreover, Ms. McCutcheon stated that Ballpark Real

Estate "d[id] not want to interfere with the operation of the Ballpark," and that its only goal was

"to be compensated fairly" for the Rangers' use of the Property. [d.

D. The Interim Agreement

During the month of March 20 11, the parties engaged in a number of in-person meetings

and exchanged a number of proposals in an attempt to reach an agreement for the Rangers' use

of the Property, and Ballpark Real Estate at all times made a commercially reasonable effort to

negotiate an agreement that provided it with fair market value for the Rangers' use of the

Property. In connection with the negotiations, Ballpark Real Estate also agreed to enter into an

Interim Agreement, which gave RBE the right to operate the Property "in a manner consistent

with past practices" while the parties conducted lease negotiations. Petition, Exhibit H. The

terms of the Interim Agreement expired on April 13, 2011.5 Id. But, after receiving notice of

this lawsuit, and prior to the expiration of the Interim Agreement, Ballpark Real Estate informed

RBE that it was willing to extend the terms of the Interim Agreement for an additional two

weeks in order to facilitate the parties' ongoing negotiations. See Exhibit A. RBE inexplicably

refused Ballpark Real Estate's proposal.

III. RBE IS NOT ENTITLED TO A TEMPORARY RESTRAINING ORDER

A. RBE Has Not Established a Likelihood of Success on the Merits

RBE has not established a probable right to recovery on its claims which are premised on

Ballpark Real Estate's alleged failure to use commercially reasonable efforts to enter into a lease

5

When negotiating the Interim Agreement, Ballpark Real Estate originally proposed that the agreement extend through April 30, 2011, but RBE would not agree and shortened the term of the agreement to April 13, 20 11.

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agreement. The evidence is actually to the contrary, as Ballpark Real Estate has consistently

used commercially reasonable efforts to negotiate and enter into a lease agreement.

For example, on March 2, 2011, Ballpark Real Estate initially proposed a flat fee

structure to RBE for RBE's use of the Property during the 2011 baseball season. Since that time,

Ballpark Real Estate has exchanged multiple offers and counter-offers with RBE as part of an

ongoing negotiation process. While BRE initially proposed a flat fee arrangement, Ballpark Real

Estate has also proposed fee structures based on the number of cars parked by RBE. Ballpark

Real Estate has also made numerous concessions regarding the revenue streams that will

ultimately be included in the parties' agreement. Each of Ballpark Real Estate's offers was

commercially reasonable, as Ballpark Real Estate has done nothing more than negotiate for a

lease agreement that provides it with fair market value for the use of the Property. Most

recently, Ballpark Real Estate expressed a willingness to extend the terms of its Interim

Agreement with the Rangers in order to further the parties' negotiations. See Exhibit A.

B. RBE Has Not Established a Substantial Threat of Irreparable Harm or An Inadequate Remedy at Law

RBE has failed to demonstrate that it faces a substantial threat of immediate and

irreparable harm that would justify its request for a temporary restraining order. RBE claims that

it will suffer irreparable harm "if its customers and fans are charged more than they previously

contracted to payor more than they were informed they would be required to pay for parking."

Petition, ~ 54. However, RBE will not be required to raise its parking rates if the Court declines

to enter a temporary restraining order. Ballpark Real Estate does not control the parking rates on

the Property and it has proposed lease terms that allow RBE to make a profit on its parking

operations based on its projected attendance for 2011, so any additional cost that RBE may have

to pay Ballpark Real Estate in connection with the parties' new lease agreement would not need

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to be passed on to the Rangers' fans. Furthermore, even assuming that RBE would not make a profit under the lease terms that Ballpark Real Estate has proposed (which is not the case), RBE

could always make the business decision not to raise parking rates. For example, when TRBP owned the team, it maintained artificially low parking rates to drive attendance at Rangers' games.

In addition, RBE's claim that it will suffer irreparable injury "if it cannot operate the [Ballpark Real Estate] parking lots surrounding the Ballpark" is unpersuasive. Petition, ~ 54. From the time that Ballpark Real Estate initiated discussions with RBE regarding a long term plan for the Rangers' use of the Property, Ballpark Real Estate has made clear that it intends to "minimize any disruption" to RBE's daily operations. Petition, Exhibit D. In fact, Ballpark Real Estate entered into an "Interim Arrangement for Parking Operation" on March 29, 2011, which gave RBE the right to operate the Property "in a manner consistent with past practices" while the parties conducted lease negotiations. Petition, Exhibit H. While that Interim Agreement expired on April 13, 2011, Ballpark Real Estate informed RBE prior to the Interim Agreement's expiration that Ballpark Real Estate was willing to extend the agreement for a period of at least fourteen days in order to allow the parties' additional time to reach a lease agreement. See Exhibit A.

Given Ballpark Real Estate's commitment to not interfere with the Rangers' parking operations, and its willingness to extend the terms of the Interim Agreement in order to maintain the status quo, there is no possibility that the Rangers' parking operations will be disrupted in the next two weeks. As such, RBE cannot establish that it will suffer a harm for which there is no adequate remedy at law. See, e.g., State v. Morales, 869 S.W.2d 941, 946 (Tex. 1994) ("An injunction will not issue unless it is shown that the respondent will engage in the activity

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enjoined."); Frey v. DeCordova Bend Estates Owners Ass'n, 647 S.W.2d 246,248 (Tex. 1983) ("fear or apprehension of the possibility of injury alone is not a basis for injunctive relief'); Jones v. Jefferson County, 15 S.W.3d 206, 213 (Tex. App. Texarkana 2000, pet. denied) ("injunctive relief requires the plaintiff to prove the defendant has attempted or intends to harm the plaintiff in the future").

IV. CONCLUSION

For the foregoing reasons, Ballpark Real Estate respectfully requests that the Court deny

RBE's application for a temporary restraining order. In the alternative, Ballpark Real Estate requests that the Court enter a temporary restraining order prohibiting either party from acting inconsistently with the terms of the parties 9 Interim Agreement over the next fourteen days.

..

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Respectfully submitted,

Brett Charhon State Bar No. 24040674 McKOOL SMITH, PC

300 Crescent Court, Suite 1500 Dallas, Texas 75201 214-978-4000 (Telephone) 214-978-4044 (Fax)

ATTORNEYS FOR DEFENDANT

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the above and foregoing instrument has been served on this the 14th day of April, 2011 by fax and email to:

Marshall M. Searcy, Jr. Jason C. Nash

David H. Garza

Kelly Hart & Hallman LLP 20 1 Main Street, Ste. 2500 Fort Worth, Texas 76102 (817) 332-2500 (Phone)

(817) 878-9280 (Fax)

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CAUSE NO. 153-252201-11

RANGERSBASEBALLEXPRESSLLC § §

Plaintiff, §

§

v. § §

BALLPARK REAL ESTATE L.P., §

§

Defendant. §

IN THE DISTRICT OF

TARRANT COUNTY TEXAS

153rd DISTRICT COURT

AFFIDAVIT OF BRETT CHARHON IN SUPPORT OF BALLPARK REAL ESTATE L.P.'S RESPONSE TO PLAINTIFF'S APPLICATION

FOR TEMPORARY RESTRAINING ORDER

Brett M. Charhon, being first duly sworn deposes and states as follows:

1. My full name is Brett Maurice Charhon, I am over the age of twenty-one years,

have never been convicted of a felony, am fully competent to make this affidavit and have

personal knowledge of the matters set forth herein.

2. I am an attorney at McKool Smith P.C. located at 300 Crescent Court, Dallas,

Texas, 75201.

3. Attached hereto as Exhibit A is a true and correct copy of an email that I sent

Jason Nash on April 12, 2011 communicating Ballpark Real Estate, L.P.' s willingness to extend

the parties' March 29, 20 11 interim agreement by fourteen days.

4. Attached hereto as Exhibit B is a true and correct copy of a March 30, 2011 letter

from Lori McCutcheon to the City of Arlington.

CHARRON AFFIDAVIT

PAGEl

ON

STATE OF TEXAS §

§

COUNTY OF DALLAS §

Subscribed and sworn to me on this the 13th day of April, 2011.

Date: e " - I 3 - c:l 0 I I

Official Signature of Notary

(Official Seal)

Notary's printed or typed name, Notary Public

My commission expires: _ __.../~t._ .... _o_t../_ .............. ~....._4?_.() ........ L ........ Z...._....1 _

CHARBON AFFIDAVIT

PAGE 2

Page 1 of 1

Brett Charhon

................................. '1' r. r .. ~ ~ 'I r r 'l'r r r"r r _ •••• 'I .. -I. "1 .. -....-. I', I I • I I', r"ri'r r"r"r r _. r _ r _ r r". r o{'- _ .. 'I 'I 'I I • I _. I I I I I •••• I I I I I _ I •• I " I _ I ri I I .. I I .. I .. I I I I I I I I I I •••••• I r I r I I I I .. I I I I I 1"1'1 I I.... I I I I I I I I I I I • I • I I I. I I I I I • I I' I •• 1'1 I I I I I I I •• I I I I I. I I I I I I I I I I I I I I I I I I • I I I I I I I I I I I I I I I I I I I I • I ,', I I I r I I I I I r'r' r'r'. I r r r r r r r _ r _.. • 'I. "I 'I 'I. -i. "I I I • I 1"1 I I • 'I 'I r ~ I • I I • I I • I I • r I • I I r r I r r r "1 'I 'I "I 'I 'I. 'I rI-i •• I'" "I I I "1''1. r _ r"l "I' r _ r r r .. I ~ .

From:

Sent:

Brett Charhon

Tuesday, April 12. 2011 6:12 PM

To: 'Jason Nash'

Subject: RE: Rangers Baseball Express Jason:

I have confirmed that my client i.s amenable to extending the interim agreement by 14 days. If your client is willing to agree, \ve would simp1y ask that BI{_E:'s deadline to respond to Rangers' 'March 24, 2011 offer be extended until Tuesday April 19,2011. As I understand it, the March 24th otfer is currently set to expire at 5:00 p.m. tomorrow,

Please let me know your clients' position by 1 0 a.rn. tomorrow as we intend to tile a response to your application tor TRO if you intend to go forward with the hearing. Ifyour client is willing to extend the interim agreement, we will draw up a simple letter agreement memorializing the extension.

Regards,

Brett

From: Jason Nash [mailto:jason.nash@kellyhart.com] Sent: Tuesday, April 12, 2011 4:50 PM

To: Brett Charhon

Subject: Rangers Baseball Express

Brett,

Thank you for your call earlier. You mentioned that your client may be amenable to an extension of the interim letter agreement. I will communicate that to the Rangers' representatives. Meanwhile, I have confirmed with the Court that our Application for TRO will be taken up by the Judge on Thursday, April 14, 2011, at 9:30 a.m. -- please see the attached Fiat.

Jason C. Nash

KELLY HART & HALLMAN LLP

201 Main Street, Suite 2500

Fort Worth, Texas 76102

(817) 878 .. 3552 (direct phone)

(817) 878-9752 (direct fax) jason.nash@kellyhart.com WVIW.kellyhart.com

CONFIDENTIAL NOTICE: This electronic transmission and any documents or other writings sent with !t constnute confidential intormanon which is intended only for the narned recipient and whicn may be leqally privil(~ged. If you have received this communication ! fl error ~ do not read it. Please reply to the sender at Kelly Hart & Hallrnan t~LP that. you have received the message in error. Then celete it. Any disclosure! copyinp. distribution or tt,e takirlg of any action concerruno the contents of this cornrnunicanon or any attachment(s) by anyone other than the named recipient is strictly protnbitec;

4/13/2011

• •

•

Ballpark Real Estate, L.P ~ c/o Hicks Holdings LLC

1 00 Crescent Court, Suite 1200 Dallas .. Texas 75201

#0

March 30, 2011

Via Email

p _.It ; UIzfIIII&I

City of Arlington

101 West Abram Street Arlington, Texas 76004 Attn: Trey Yelverton

Ladies and Gentlemen:

In response to your request of March 25, this letter will confirm that Ballpark Real Estate, L.P. ("BRE" or "we") will cause, throughout the tcnn of the Development Property Lease, adequate parking facilities (surface or structured) to be provided for the Rangers Ballpark in Arlington (the "Ballpark"), whether on the premises leased by BRE from the City under the Development Property Lease, or on other land in the vicinity of the Ballpark. The term "adequate" has the same meaning in this letter as in Section 5.1(c) of the Development Property Lease.

As of this date, BRE is making more than 12,000 parking spaces available for Texas Rangers baseball games held at the Ballpark. Those spaces are located within the BRE parking areas identified on the attached Exhibit A.

aq..., * II PI

As you may know, the Texas Rangers have pre-sold parking passes to the BRE parking areas for the 2011 season. BRE intends to honor those pre-sold parking passes, so that baseball fans with those passes may park in the BRE parking areas, at no additional cost to the fans. BRE also intends to allow baseball fans without pre .. sold parking passes to park in the BRE parking areas this season (subject to availability), as long as they purchase a cash parking pass from the attendants operating the parking areas. The prices for cash parking passes will generally be the same as the prices advertised by the Texas Rangers before the start of the season.

..

898081v3

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\V~ look forward to a great baseball season .. Please contact us with any further questions.

City of Arlington March 30, 2011 Page 2 of2

1

--'

t

Sincerely,

BALLPARK REAL ESTA·rl:~ L.P.

~

a 'Texas limited partnership

By: SSR OJ> Interests, L.P .. , its general partner

By: S\VS Realty LLC, its general partner

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