By sometime next year, Ed Hale may own the naming rights to a large hole in downtown Baltimore.

The chairman and CEO of 1st Mariner Bank signed a 10-year contract in 2003 for an undisclosed amount to put the bank’s name on Baltimore’s arena. But city and state officials this past week announced plans to tear down the existing arena and build a new 18,500-seat venue, a process that could take three to five years.

So what happens to 1st Mariner’s contract?

“Good question,” Hale said Wednesday. “There’s several entanglements we’re not sure about.”

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Among them is a separate contract Hale has with the city, which owns the facility, for the rights to interior and exterior advertising at the arena. Hale said he put $1 million of his own money into exterior billboards and other improvements, and put the contract’s value in the “millions of dollars.”

“We believe that’s helped [arena operator] SMG make this profitable and even made the arena look a little better,” he said. “This is a Baltimore City-owned building, and when we did this, it was all on my dime. So if they’re going to tear it down, we don’t know what’s going to happen with that.”

Hale said neither issue was brought up during a July 25 meeting with members of the Arena Advisory Panel, a group of city and state officials overseeing the project.

M.J. “Jay” Brodie,” the panel’s chairman and president of the Baltimore Development Corp., declined comment Wednesday.

The situation is somewhat uncommon, said Don Hinchey, vice president with the Colorado-based Bonham Group, a sports marketing firm that specializes in naming right deals.

Naming right contracts for new venues run for an average of about 20 years, and a 10-year contract for 1st Mariner, built in 1962, isn’t unreasonable, Hinchey said. In 2003, M&T Bank purchased the naming rights to the Ravens stadium for $75 million over 15 years.

But he said the contract likely included one of three components: An exit clause allowing Hale a clean break; a first right of refusal for naming rights to the new arena; or a cash return for money left on the existing contract. Specifics would also depend on whether Hale pays for naming rights on an annual basis, or in lump sums.

“You would try to build language into the original contract that protects you from anything extreme happening, like an act of God or the city deciding to knock the arena down,” Hinchey said.

acahall@baltimoreexaminer.com