Big surprise

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Cost Estimate on Stadium Jumps
D.C. Analysis Says Price of Deal Could Rise $91 Million
By David Nakamura and Lori Montgomery
Washington Post Staff Writers
Thursday, October 28, 2004; Page A01

The cost of building a baseball stadium and renovating Robert F. Kennedy Memorial Stadium could be $91 million more than city officials initially estimated, according to an analysis released last night by the District's chief financial officer.

In an eight-page letter to D.C. Council Chairman Linda W. Cropp (D), Natwar M. Gandhi said the total cost of the stadium package could reach $486.2 million, not the $395 million stated in the agreement between the District and Major League Baseball.

The additional costs come largely in three areas: $50 million for improvements to roads, sewers and Metro; $11 million more than estimated to renovate RFK; and $30 million more than estimated for contingency funds for likely cost overruns.

"As a result of the increase in project costs, more money will have to be borrowed and debt service will increase," Gandhi wrote.

He estimated that the city would need to issue $500 million in bonds, up from an estimated $440 million. Furthermore, officials would need to collect about $2 million per year more on gross receipts taxes on the city's largest businesses to pay the debt service.

Gandhi's conclusions came the same day Mayor Anthony A. Williams (D) proposed creating a community investment fund worth up to $400 million to build and renovate schools, public libraries, parks and athletic facilities by harnessing the economic energy generated by a new baseball stadium on the Anacostia waterfront.

The mayor's announcement was an attempt to appease residents and groups opposed to spending public funds for the stadium for the Montreal Expos, which Major League Baseball plans to relocate to Washington next spring. Opponents of the plan say public money would be better spent on crucial community programs.

"We've heard the call from our public to link our baseball initiative to continued support for other important priorities in the city, and that's what we're going to do," Williams said at his weekly news conference, where he was flanked by a dozen ministers and labor union leaders and two D.C. Council members.

"We're going to . . . match our community investment to the value of the stadium project," Williams added. "We've listened to our citizens, we've listened to our leadership and we're acting."

But the mayor's proposal was immediately denounced by some stadium opponents, who said the lack of details showed that the plan is theoretical at best.

"Can they really generate $400 million? It's not clear. When will it start? Unclear," said Ed Lazere, co-leader of a group called No D.C. Taxes for Baseball. "It will be interesting to see how people react to it. Do they believe it? Do they trust that it's real?"

Gandhi's estimate and Williams's announcement came on the eve of today's 10 a.m. public hearing on the stadium financing legislation before the D.C. Council at the Wilson Building. A total of 208 panels and individual speakers have signed up to testify, one of the largest lists in council history.

Two council committees will mark up the baseball legislation Wednesday, and the full 13-member council could take a first vote Nov. 9.

Council member Jack Evans (D-Ward 2), an avid supporter of the stadium plan, said his office has received more than 7,000 e-mails about baseball. He acknowledged that while most supported bringing a team to Washington, more than 50 percent opposed spending significant public funds on a stadium.

Under the mayor's new proposal, the city would sell up to $400 million in bonds and dedicate the money to the community investment fund. Williams said he and council members have yet to decide how to allocate the money. His only requirement, he said, is that it be spent to build and renovate facilities rather than to pay salaries and operate programs.

City Administrator Robert C. Bobb said the bonds would not be paid back through existing revenue, but he declined to elaborate. After the stadium is built by 2008, officials said, development in the surrounding community is expected to contribute a gush of new taxes to city coffers. At that point, those new taxes would be used to repay the bonds.

While the city has used this form of financing -- known as tax increment financing, or TIF -- on a number of city projects, much remains to be determined about this one. The mayor said he has yet to decide the boundaries of the TIF district.

Joslyn Williams, president of the Metropolitan Washington Labor Council, acknowledged that details about the fund are sketchy. "What we have worked out so far is a skeleton," he said. "Now we've got to put the meat on it."

The Rev. H. Lionel Edmonds, pastor of Mount Lebanon Baptist Church, said the mayor's promise to create the fund marks a significant improvement over what the stadium legislation initially promised the community.

"Before, there wasn't any [precise] figure," Edmonds said. "It was just 1,000 tickets for some poor kids. Now we're talking about a $400 million fund."

Council member Jim Graham (D-Ward 1), though, was not convinced that the plan could raise a significant amount of new revenue.

The mayor's proposal is "obviously a gesture to those of us who think other priorities should be part of this deal," Graham said. "But parking revenue and the sale of hot dogs is not going to generate $400 million."