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D.C. Baseball Stadium Cost Could Exceed $700 Million

By David Nakamura
Washington Post Staff Writer
Tuesday, December 6, 2005; A01

Top District officials discussed new estimates for a baseball stadium project along the Anacostia River in Southeast Washington yesterday and determined that costs could reach more than $700 million, which is more than $100 million beyond the previous forecast of the city's chief financial officer.

Officials stressed that the new estimates are preliminary and take into account all potential costs, including $41 million for underground parking, $20 million to upgrade the Navy Yard Metro station and $12 million to rebuild nearby roads. They added that some of the work might not have to be paid for by the city or done at all.

The new cost figures were discussed briefly in a meeting with Mayor Anthony A. Williams (D), Chief Financial Officer Natwar M. Gandhi, D.C. Council member Jack Evans (D-Ward 2) and others yesterday afternoon. Accounts of the meeting varied.

A source with knowledge of the discussions said the estimates reached $714 million. That source, who had seen a document detailing the costs, spoke on condition of anonymity because Gandhi is working on a report of new estimates and the numbers are not final.

Vince Morris, spokesman for Williams, disputed that figure.

"The $700 million doomsday budget is not ours and does not reflect reality," Morris said. "We told the citizens of the District that we'd build a gem of a ballpark on time and on budget, and that's what we intend to do."

Gandhi's previous estimate was $535 million for the stadium project, plus $54 million in financing fees, for a total of $589 million.

Gandhi confirmed that he met with Williams and Evans yesterday but declined to comment on specifics. His office is working on an analysis of how much it would cost to build a stadium at the waterfront location vs. the cost of building it adjacent to Robert F. Kennedy Memorial Stadium, which some council members have said would be cheaper.

"I can understand that because of Hurricane Katrina, costs have changed" for construction materials, Gandhi said. "What we're doing now is working at those estimates. We hope that pretty soon we'll have the numbers."

The source said the new estimates from Gandhi's office include $58 million to cover financing fees associated with stadium construction bonds, which the city plans to pay using revenue generated by taxes from Washington Nationals games this past season and interest on the bond money before it is spent next year.

The council approved spending $535 million on the stadium project last year and will not approve any new funds, said Evans, chairman of the council's Finance and Revenue Committee.

"None of these numbers change the 535 million-dollar number," he said. "That's still the number."

But Gandhi's new estimates also include $40 million in contingencies, twice the $20 million extra in contingencies that Major League Baseball recently agreed to contribute to the project during ongoing stadium lease negotiations, the source said.

Council member David A. Catania (I-At Large), who opposes the project, said yesterday that he intends to introduce two stadium-related emergency bills at the council's legislative meeting today, including one that would cap the cost of the project at $535 million.

In recent weeks, Catania and others had calculated that the projected price had reached well over $600 million because city officials removed $55 million of infrastructure costs and $54 million in bond financing fees from the original budget to deal with escalating stadium costs.

Because the city is financing the construction bonds with other revenue, it might have to pay the infrastructure costs with city money in the future, Catania said.

The new project estimates come as the city is close to finalizing a stadium lease with baseball. City officials have said they hope to complete the lease deal and send it to the council by Friday. Council members said last week that baseball's recent concessions show progress.

The lease is critical because until it is completed, city finance officials will not issue construction bonds and Commissioner of Baseball Bud Selig has said he will not sell the Nationals.

Along with the $20 million payment to cover rising construction costs, baseball has agreed to give the District a letter of credit that would guarantee the Nationals' rent payment for one or two seasons in case of a terrorist attack or players' strike.

In return, the city has agreed to give baseball one-third of parking revenue generated by a new stadium on non-game days, city officials said yesterday.

Over the course of the stadium's life, expected to be 30 to 40 years, baseball would get back its $20 million, according to sources familiar with the lease negotiations.

City planners say they anticipate people parking in the stadium year-round because they are working with private developers to create a nearby entertainment district, featuring shops, restaurants, residential units and office space.

The details of the parking revenue split have not been finalized because baseball's negotiators are concerned that the stadium parking lots will not produce as much revenue as anticipated on non-game days, sources with knowledge of the stadium discussion said.

"The problem is, there's uncertainty there," Evans said. "It's possible no one would park in those lots for years. Even then, every one of the buildings [in an entertainment district] would have a parking garage."

Nationals President Tony Tavares and other Major League Baseball officials declined to comment yesterday, citing ongoing negotiations.

Critics who object to the public investment in the project said yesterday that if the District gives parking revenue to baseball, it would negate the impact of the $20 million payment.

Baseball "offers to help with $20 million, but they'll get that back and then some over time," Catania said. "It's outrageous. . . . That's not a true advance of $20 million in a way one would expect a partner to share some of the costs."

Baseball will receive all parking revenue from the 81 games each season, except for tax money that goes to the city. Baseball's negotiators also argued that the stadium agreement signed by baseball officials and Williams last year stipulated that baseball would get parking revenue on non-game days.

Mayoral spokesman Morris characterized the deal as a victory for the District.

"Instead of letting Major League Baseball keep all the money from its parking lot, we've cut a deal where we keep two-thirds" of all parking revenue on non-game days, Morris said. "Even better, Major League Baseball is still going to give us the $20 million upfront."

But council member Jim Graham (D-Ward 1) said baseball's contribution is "totally illusory. It doesn't deceive any thinking person."

Wow! Lucky DC! They sure got a sweet deal for the Expos!

quote:

Council member David A. Catania (I-At Large), who opposes the project, said yesterday that he intends to introduce two stadium-related emergency bills at the council's legislative meeting today, including one that would cap the cost of the project at $535 million.

I could see this being very popular with the voting public in DC. If it should pass who comes up with the shortfall? You know all this financial trouble for new MLB stadiums in DC, Florida etc. could have an effect how we get our future stadium approved. There appears to be a pattern of cities unintentionally low balling what the true cost is. You never see a city's cost projection exceed the actual cost. It will probably be more important than ever for a stadium plan to spell out clearly exactly how cost overruns will be paid and by whom.

$700 million? That will take a lot of filibustering....

Since my last post today I heard Lars Larson rant against MLB2PDX. Nothing new there.
What is new but expected is he is capitalizing on the $700 million number in DC. His segment was that "Portland dodged a bullet by not getting the Expos". That Portland would have been on the hook for millions in cost overruns. Than he went on with his trademark inflated half truths. I pretty much write him off but that kind of reasoning might be a bell weather for what we can expect from some key local officials when a team does want to locate here.

Who's Lars Larson?

Sounds Swedish.

Another big government advocate, I'm sure.

We as Portlanders should not let these boring Zombies ( Lars Larson,Tom Potter) keep the whole city from having fun

quote:

Originally posted by Maury:
Who's Lars Larson?

Bill O'Reilly's cat.

quote:

Originally posted by Oil Can Kelly:

quote:

Originally posted by Maury:
Who's Lars Larson?

Bill O'Reilly's cat.

I was thinking parrot.

At least it's consistent. While on my trip a couple months ago, I did happen by the wrong station to hear it blast the DC stadium effort with considerable gusto.