New Orleans Louisiana Saints, Limited Partnership, Benson Football, Inc. Tax Matters Partner - Page 31

                                       - 31 -                                         
          the presence of these renewal options favors petitioner's                   
          argument, and we find respondent's argument to the contrary                 
          unconvincing.  The renewal options were not without value and,              
          although the record does not identify the extent of their value,            
          we are convinced that that value was not insubstantial, as                  
          respondent contends.  The terms of the Second Lease Amendment               
          reflected generous concessions made by the State, and the renewal           
          options made it possible for the fruit of those concessions to be           
          enjoyed by the Saints for up to 10 years.                                   
               The fourth factor entails an examination of the most recent            
          negotiations concerning the provisions of the 1975 Lease.  Prior            
          to petitioner's acquisition of the team, the most recent                    
          negotiations between the Mecom Group and LSED occurred in mid-              
          1984.  These negotiations were in response to LSED's lease with             
          the Breakers and gave rise to the Second Lease Amendment.                   
          Respondent maintains that we should discount these negotiations             
          because they were the result of a contractual breach rather than            
          a genuine interest on behalf of the State to provide an incentive           
          to the team.  We decline to do so.  It is immaterial that the               
          lease negotiations at issue came to pass simply because LSED                
          desired to avoid a breach of contract claim.  LSED was conscious            
          of the available renewal options and was surely aware of the                
          potential benefit it was bestowing on the Mecom Group through the           
          enhanced terms of the Second Lease Amendment.                               






Page:  Previous  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  Next

Last modified: May 25, 2011