When An Apartment Complex Anchors A Baseball Player’s Contract
I stand before you as an unapologetic, lifelong baseball nut, proud to announce that my Chicago White Sox stand today atop the American League behind excellent pitching and regular outbursts of offense courtesy of Todd Frazier, Melky Cabrera and Adam Eaton.
I hear you ask: great, but what in the world does baseball have to do with apartment complexes?
If anybody would make the connection, it would be yours truly.
Come with me to Kansas City. Rewind to 1987. There we will find Kansas City Royals legend George Brett facing contract negotiations with the team’s then-owner, apartment developer Avron Fogleman.
Brett, a twelve-time All-Star third baseman, is just past the peak of his twenty-year career and commands a salary among the highest of his day – over $2 million.
But there’s a very unique wrinkle in this deal: it’s an apartment complex in Nashville called Country Squire Apartments, developed by Fogleman. Still standing today, this 1,100 apartment complex was completed that year.
The contracts, which are linked to Fogelman real-estate projects in Nashville and Memphis, where he lives, are probably the most difficult in baseball on which to place a value. The amount of money the players will receive from the real-estate deals makes them so.
Assessing the contracts on the best information available, however, the three Royals will be among the 10 highest-paid players this year. The values of their contracts for 1987:
Quisenberry $2,293,509 Brett $2,205,000 Wilson $1,935,296 In salary alone, Brett will earn $1.5 million, Wilson $1 million and Quisenberry $800,000. But there are those real-estate deals. Brett’s contract is tied to Country Squire Ltd., a 1,100-apartment complex in Memphis that is scheduled for completion this summer. Quisenberry’s and Wilson’s financial packages are tied to Stewart’s Ferry Ltd., a 700-apartment complex in Nashville that has recently been completed.
Brett is guaranteed a minimum cash flow of $1 million from Country Squire until December 1991. At the third baseman’s choice, the Royals will buy his 10 percent interest in Country Squire for $2 million.
Both the term and the nature of these development-equity driven contracts are very unique both to baseball and to apartment development — but in one sense, it was just another day in the marketplace, matching value in one place (third base) to value in another (Memphis).
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