Litigation seems possible between Woodbury and Minnesota United
The City of Woodbury and the Minnesota United may be squaring off once again.
The Woodbury City Council went into closed session following the Aug. 26 regular council meeting to “discuss with legal counsel litigation threatened by Minnesota United Marketing LLC.”
Though the City of Woodbury and the Minnesota United Football Club Chief Manager Nick Rogers signed a termination agreement that ended a public-private partnership between Woodbury and the United in May, a marketing agreement remains in effect between the two.
The public-private partnership was developed after the team’s management, Rogers and team owner Bill McGuire approached Woodbury staff in 2013 with a proposal to make Bielenberg Sports Center the official training facility of the Minnesota United. As part of the proposal, the United intended to build a 7,253-square-foot space for the team’s locker and training rooms.
Through negotiations, the parties developed two contracts -- one to cover the construction and use of the training space, the other a marketing agreement that gives the United exclusive marketing rights for Bielenberg Sports Center.
However, last fall, the United’s management decided to end the partnership with the city, for the training facility space. The shell of the space was already constructed, but no interior work had been completed at the time.
The City of Woodbury and the United officially announced the end of the partnership for the facility in January, but a termination agreement between the two parties was not signed until May. Later the same month, the City of Woodbury hired a broker to find a new tenant to fill the space vacated by the United.
The marketing agreement between the City of Woodbury and Minnesota United remains in place so the United can recoup some of the $975,000 spent to build the shell for the space that was to be the locker and training rooms.
The agreement gives Minnesota United “exclusive naming, sponsorship, branding and advertising rights” for most of the fields and fieldhouse at Bielenberg Sports Center. It prohibits the United’s marketing staff from soliciting sponsorships from any sexually oriented adult entertainment businesses, or alcohol or tobacco businesses, and all sponsorships are subject to approval by the city.
The contract is in effect through Dec. 31, 2023. During that period, Minnesota United Marketing LLC is required to annually pay the city 10 percent of the gross revenues. For the first five years, Woodbury will receive a guaranteed minimum payment of $25,000. The minimum increases to $35,000 for years six and seven and $50,000 for the eighth year through the end of the contract.
The first payment $25,000 was due to Woodbury by Dec. 31, 2014.Emails between Rogers and City Administrator Clint Gridley indicate the payment was received after Jan. 7, 2015.
Amendments were made to the marketing agreement in May, while the termination agreement was signed on the Bielenberg Sports Center space. The amendments clarify that the rights of both parties do not change and that the United is still allowed to do the marketing. However, the parties agree in the amendment that the United does not have rights to marketing space leased by other tenants. Both the former United team space and a second-floor restaurant area are going to be leased by the City of Woodbury, which owns the addition constructed by the United.
The Woodbury Bulletin has requested certain information specific to the threatened litigation under Minnesota’s Data Practices Act. At this time, the Bulletin does not know the nature of the threatened litigation.