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Specific Performance and Stadium Leases

From the Seattle Times, an interesting discussion regarding the specific performance clause in the Sonic's lease with KeyArena, a city owned facility:

Mayor Greg Nickels says he'll force the Sonics to remain through the end of the lease in September 2010, despite owner Clay Bennett's stated desire to take the team to Oklahoma if he doesn't get a deal for a new arena in the next two months.

City Council members say they'll introduce legislation prohibiting any early buyout.

But can city officials really chain the Sonics to KeyArena for three more years?

As a general rule, tenants cannot be forced to stay until the end of a lease; landlords can merely collect monetary damages for breach of contract.

But the Sonics' lease contains language that could allow the city to reject an early buyout. The single paragraph, known as a "specific performance" clause, essentially says the city can require the Sonics to stay at KeyArena for the full term.

...If it comes down to a fight, the specific-performance clause in the Sonics' lease could give the city important legal leverage. While it would not permanently prevent a move, the clause could jack up a settlement price or even encourage a team sale.

"That's the silver bullet," said Fred Nance, a Cleveland attorney who used similar lease language to fight Browns owner Art Modell's efforts to move the NFL team to Baltimore in the mid-1990s.

Nance said the language in the Browns' lease allowed the city to get an injunction requiring the team to play the remaining three seasons on its lease at Cleveland Municipal Stadium. That prompted Modell and the NFL to negotiate a deal that eventually allowed the team to move to Baltimore but guaranteed Cleveland an expansion franchise that kept the Browns name.

Perhaps Seattle will keep the Sonics name, Bennett will move the franchise to Oklahoma City, and the next stop for the erstwhile Hornets will be in the Pacific Northwest. But it will take plenty of negotiation to get to that point.