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How D.C. landed a baseball team

By David Pollak
San Jose Mercury News

WASHINGTON - The nation's capital has a baseball team for the first time in 33 years this spring, and a local politician involved in the process has cautionary words for San Jose and any other city hoping to join the major leagues.

You will have to give baseball ``a sweet deal,'' D.C. Council Chairman Linda Cropp says, ``but you don't have to get diabetes from it.''

There are more differences than similarities between the drive that lured the Montreal Expos to Washington and the burgeoning effort to woo the A's to San Jose. But baseball advocates in the South Bay take heart in the District of Columbia's success.

That's primarily because Washington, like San Jose, had to overcome vocal opposition from a franchise 50 miles away. Unlike Giants owner Peter Magowan, who has territorial operating rights to San Jose, the Baltimore Orioles' Peter Angelos simply had television rights to D.C. Still, he was an obstacle.

``If it makes sense for Major League Baseball, owners will work to make things happen,'' said Mike Fox Jr., president of Baseball San Jose. He contended that an A's franchise in San Jose would improve the league's financial picture -- and that could end up being enough of a reason to place a team there.

Beyond that, he added, relocating the Expos to Washington ``showed Major League Baseball can make those kinds of deals work and keep everybody happy.''

There are other parallels: Each city had strong mayoral support for baseball. Both needed to find a way to build a stadium, something San Jose failed to do twice in the 1990s when it tried to lure the Giants from San Francisco.

But the two situations diverge as well: The Expos were definitely leaving Montreal; the A's say they want a new stadium in Oakland. Washington had federal influence and nostalgia going for it as the former home of the Senators; San Jose has neither. Voters in San Jose must approve use of public money for a stadium; not in D.C.

Here's a look at the price Washington paid to land a team -- and the political games that may be ahead for San Jose.

Stadium hows and wheres

The Senators never finished their last game in D.C. On Sept. 30, 1971, they led the New York Yankees 7-5 with two out in the top of the ninth inning when fans ran onto the field and began tearing it up. Washington had to forfeit.

It took baseball more than three decades to give D.C. another chance.

``It's a different environment, different city, different economics, different political will, different media market -- everything had changed in 30 years,'' said Mark Tuohey, the attorney who serves as chairman of the D.C. Sports and Entertainment Commission. ``Once that really set in, I think we were on the way to getting baseball back.''

The push to land the Expos came from Mayor Anthony A. Williams, who saw a 41,000-seat stadium as part of a larger plan to develop a neglected neighborhood south of Capitol Hill along the Anacostia River.

``What we learned is you can't put the burden on baseball to be the linchpin,'' said Stephen Green, the top adviser on the issue in the mayor's office. ``It's got to be something where baseball is part of something.''

Until a new stadium is ready -- and no architect has been chosen -- the renamed Nationals will play at least three seasons at RFK Stadium. The city is spending $18 million to renovate the park that opened in 1962.

Many, including Cropp, preferred a new stadium adjacent to RFK. There, the city did not have to worry about spending $200 million on environmental cleanup and land acquisition that could raise the price tag for the Anacostia site to almost $600 million.

The mayor prevailed.

``We very much wanted to pick a site that would have a broader impact, much like Pac Bell in San Francisco,'' Green said. ``It would become a catalyst to an existing set of elements in play.'' D.C. did not want to emulate Milwaukee, where a new stadium for the Brewers is surrounded by thousands of parking spaces and little else.

San Jose, too, sees a new stadium as part of a larger redevelopment plan, but that was not always the case. In 1992 voters rejected plans for a new Giants stadium at a then-relatively isolated area of North San Jose. Sites now under consideration, such as the Del Monte cannery along Auzerais Avenue or the former KNTV-TV studio property two blocks south of HP Pavilion, are closer to downtown.

When it came to financing the stadium, D.C. turned to the business community, the team, and its fans -- not the city's general fund.

The city's biggest companies will pay a special tax over the next 30 years. All businesses and federal offices will also pay an extra 1 percent utility tax. The District will collect annual rent averaging $5.5 million from the Nationals. And those who go to the games will pay higher taxes for concessions and parking.

Still, there was opposition. Some critics pointed out that costs would end up being passed on to consumers. Other raised social issues.

``People used baseball to express their pent-up frustrations,'' Tuohey said. ``It was about the other ills in the District. Not enough affordable housing? Well, that housing issue is going to be there whether baseball comes or not.''

The pesky guy next door

The stadium site and finance plan made Washington a viable candidate, but there was still a hurdle to clear.

``There were people in baseball who simply didn't want to come here,'' Tuohey said. ``Was part of that Peter Angelos' influence? You bet.''

The Orioles' owner said placing a team about an hour's drive away would harm his franchise. He had TV rights to the Baltimore-Washington region -- not as encompassing as Magowan's territorial rights -- and argued that 25 percent of Baltimore's fan base comes from D.C. and Northern Virginia.

Washington proponents made their case that the two cities were distinct markets, with separate TV affiliates and separate beltways.

Baseball owners agreed with both sides when they announced Sept. 29 that the Expos were coming to Washington and Angelos was entitled to compensation that has yet to be spelled out, as TV rights remain a sticking point. One reported element: a guaranteed minimum price tag of $365 million for the Orioles, should Angelos sell the team.

That burden would be shared by all teams, but the Nationals are already paying a price: Without a final agreement, Angelos has been able to keep the newcomers from signing any TV deal, even though the season starts in one week.

Those trying to bring baseball to San Jose are paying attention to the negotiations with Angelos, as they could give some indication of where bargaining might start in any effort to satisfy Magowan. The Giants' owner insists he will not back down, but San Jose proponents consider everything negotiable.

The art of haggling

What could have been the end of Washington's baseball frustrations ended up being the start of a political fight that almost killed the deal.

The mayor and Major League Baseball, collective owner of the Expos for the past three seasons, hammered out a contract. Cropp said she and the council, which had to approve terms of any agreement, learned the details only after Washington was chosen.

``It was the worst deal that had ever been negotiated,'' she said. ``The agreement was just so lopsided negatively toward the District.''

There was no provision for private financing beyond the average rent of $5.5 million annually the Nationals would pay, driving up the burden on businesses being taxed. There were severe penalties if the District did not finish stadium construction on time.

Cropp and the council rebelled. They added a requirement calling for private financing to pay for half of the construction costs. They tried to reduce D.C.'s liability for delays.

Now, Cropp insists she was not trying to end baseball's future in Washington, though that's how she was portrayed when baseball set a Dec. 31 deadline for the city to drop the 50 percent requirement. Ultimately, Cropp backed down. The 50 percent requirement became a goal.

She did, however, reduce the District's financial risk. The final agreement gives D.C. an extra year before it faces penalties for stadium delays. Those penalties were capped at $19 million if the team's new home is not ready by 2009.

As far as potential private financing, Cropp said she was certain developers would see the stadium as an investment opportunity. Two have, though the viability of their proposals has been questioned.

Both Tuohey and Cropp reject widespread criticism that Washington failed to use the bargaining leverage it had to craft a better deal for the city. They argue there was serious competition -- Las Vegas; San Antonio; Monterrey, Mexico; and especially Northern Virginia -- for the Expos.

``I don't have any second thoughts about it,'' Tuohey said.

Added Cropp: ``I don't want anyone to think for one moment that we could have gone in there and been 100 percent hardball. It had to be somewhat of a sweetheart deal to get the team here.''

Or, look to San Francisco

Can San Jose learn from Washington's experience?

Dean Munro, executive director of the San Jose Sports Authority, plays down the comparison because of Washington's reliance on public financing for its stadium.

``I think the Washington example is less relevant for us than San Francisco,'' he said. ``That was done with all private financing. That's the standard.''

City Council member David Cortese, a baseball proponent and mayoral candidate, sees San Jose, like Washington, turning to the business community as a way to avoid tapping into the general fund.

``The eBays of the world have to be engaged on this one way or the other,'' Cortese said, adding that there also are ways to tailor a finance mechanism to developers who stand to benefit most from a stadium in San Jose.

And Cortese is prepared for critics who worry that San Jose, like Washington, may pay a high price to get a team.

``A city understands that major league sports sometimes ends up with the largest piece of the pie and the public picks up more than it wants on the facility itself. You have to reconcile public investment with public benefit.''

Contact David Pollak at dpollak@mercurynews.com

quote:

`Dean Munro, executive director of the San Jose Sports Authority, plays down the comparison because of Washington's reliance on public financing for its stadium.

``I think the Washington example is less relevant for us than San Francisco,'' he said. ``That was done with all private financing. That's the standard.''

Uh, either Dean got this backward, or Pollack got it backwards. Private financing is the anomaly, not "the standard."

quote:

Those trying to bring baseball to San Jose are paying attention to the negotiations with Angelos, as they could give some indication of where bargaining might start in any effort to satisfy Magowan. The Giants' owner insists he will not back down, but San Jose proponents consider everything negotiable.

Selig would never allow a vote on the move. San Jose needs to be looking at the broader context of the matter, which is the fundamental breakdown of territorial rights should a vote be allowed to occur for the A's to San Jose.

As Touhey noted, Angelos had influence with the ownership brethren, and is still creating issues.

That is occurring because:

a) The Expos are owned collectively by MLB, and they wish to sell to recoup losses and possibly make a profit;

b) They were willing to push for the Expos to DC because Angelos doesn't have any hard territorial rights to stand on. His argument deals with the providentially award television territory.

By comparison:

a) The owners have no such equity in the A's. They don't have a collective interest in pushing the A's into San Jose. All that would do is break down the territorial guidelines, which could come back to haunt them (see NY/NJ or Seattle/Portland);

b) Magowan does have a hard territorial claim to San Jose. A court fight would be in favor of Magowan.

San Jose is going to try and connect the dots on this issue, but it's abundantly clear that even if the options run out in Oakland, the odds of Selig allowing a vote on the matter would be nearly zero.