COVID dispute resolved: County scores $1 million ballpark settlement

The Houston Astros and Washington Nationals withheld rent money after COVID closed spring camp in March 2020. Palm Beach County demanded its money.

Palm Beach County commissioners have settled a dispute with the Houston Astros and Washington Nationals over the teams’ rental payments at The Ballpark of the Palm Beaches for the pandemic-shortened 2020 spring training season. 

The dispute at one time grew so heated the county sent the teams a notice of default on their lease for the $150 million stadium in West Palm Beach, now called CACTI Park of the Palm Beaches.

County commissioners approved a settlement Aug. 20 that required the teams pay full rent for the pandemic-shortened season.

It also extends the teams’ lease at the West Palm Beach complex, which opened in 2017, by 28 weeks to October 2048.

The dispute was triggered in the early days of the COVID-19 pandemic when Major League Baseball on March 12, 2020, ordered a shutdown of all spring training facilities in Florida and Arizona. The order canceled the final 10 games of spring training at The Ballpark of the Palm Beaches.

The Astros and Nationals were scheduled to pay the county $2.14 million for 2020 under a contract approved by commissioners in 2015. The 30-year contract calls for the teams to make escalating payments to use the 160-acre complex, with an average annual payment of $2.4 million.

But when the teams’ 2020 rent payment came due that October, they only sent the county $989,136, citing a force majeure provision because of the COVID-19 pandemic, according to a letter to the county. 

The rent money from the teams combines with county bed tax dollars to pay off the bonds that built the park southwest of Military Trail and 45th Street.

While the county disputed the teams’ claims, no one disputed that the pandemic threw them all a wicked curveball.

In normal years when spring training ends, the Astros and Nationals use the complex for player development. But by late March 2020, parts of The Ballpark of the Palm Beaches were being used as a drive-in COVID testing site manned by the National Guard. 

Gov. Ron DeSantis even appeared there to address the media. 

After lengthy discussions, the county sent the teams a notice of default in September 2021. But instead of going to court, the two sides settled after nearly three years of negotiations. 

“The settlement agreement brought that difference of opinion to an end, finding a solution that will allow us to resolve it at this level rather than going through a judicial process,’’ said Assistant County Administrator Isami Ayala-Collazo, who also heads the county’s Facilities Department.  

Among the terms of the settlement, the teams will pay the county the remaining balance of $1.15 million without interest for the 2020 rent, which is technically called a Private Areas Improvement fee.

The settlement also adds new language clarifying that the teams’ annual payment obligations are not subject to force majeure.

“We’ve made it very, very clear that payments in Private Areas Improvement Fees will not be affected by labor disputes, force majeure claims and so on and so forth. We will get payment but we also took care of the situation going into the future,’’ Ayala-Collazo said.

County commissioners approved the deal without discussion.

The teams are pleased with the settlement.

“We were always intending to pay the rent. There were just some varied interpretations of when that fee would be paid given that we were not fully accessible to the facility during COVID,’’ said Creighton Kahoalii, the Astros’ senior vice president for affiliate business operations. 

“It was never contentious. It was just that sometimes in contracts there are areas both sides interpreted differently,” he said. “This provided clarity for us.’’