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McCourt gets funds to help pay for team

New Dodgers owner raises $250 million

Los Angeles Dodgers owner Frank McCourt, who pledged 24 acres of South Boston land as equity when he purchased the baseball team last year, has raised $250 million in a private placement of debt to pay off most of his acquisition loans, he said yesterday.

The private placement is unrelated to the South Boston land, McCourt said during a conference call with reporters.

McCourt said of the debt, ''We've taken advantage of attractive long-term financing."

Proceeds will go to pay off a big chunk of the acquisition loans that McCourt took out to buy the Dodgers, including $71 million in notes held by the team's previous owner, News Corp.'s Fox Entertainment Group.

As part of last year's purchase, McCourt pledged 24 acres of South Boston land that today is mostly parking lots but, given its location in the Seaport District, is believed to have great potential for development. McCourt and Fox agreed the cash value of the land was at least $125 million, said Allan Mayer, a McCourt spokesman.

Under the terms of this arrangement, McCourt agreed to pay Fox either $125 million or give Fox the South Boston land by a specified date they did not disclose. According to published reports, the original deadline for this payment was in early 2006.

This year, McCourt agreed to sell the South Boston land to his 50-50 joint venture with Related Cos., a New York developer. The joint venture intends to develop the land. That deal should close within months, McCourt said yesterday.

Related is known for such major projects as the Time Warner Center at Columbus Circle in New York City. Related is one of the largest owners of multifamily rental apartments in the country.

When the land sale to the joint venture is completed, McCourt will use the proceeds to help pay what he still owes Fox, Mayer said.

Calls to Related were not returned.

According to McCourt aides, there were several financial pieces in his purchase of a package deal that included the Dodgers, their stadium, and real estate surrounding the stadium.

Fox said it was paid $430 million in a sale that closed in early 2004. The total tab for McCourt, including closing and other costs, was roughly $500 million, said Mayer.

One goal of the private placement is to shift debt away from the baseball team and onto the Los Angeles real estate, he said.

''Well over half of the debt the team had yesterday is now gone," said Mayer, without elaborating.

The short-term acquisition debt for the real estate is being replaced by long-term debt at a better interest rate, he added. Mayer said the majority of the $250 million in commercial debt that McCourt took on to purchase the Dodgers and the associated land is being replaced by the private placement.

Neither McCourt nor aides would specify who the group of US institutional investors is that is lending McCourt the money. The transaction was arranged by Banc of America Securities.

McCourt is putting an undisclosed amount of capital in to help reduce the debt.

The terms of the private placement include provisions specifying that there will be no change in control of the Dodgers or where they play for 25 years.

Chris Reidy can be reached at Thomas C. Palmer Jr. of the Globe staff contributed to this report.

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