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Washington, baseball agree on stadium lease deal

By David Lawder Fri Dec 9, 6:49 PM ET

WASHINGTON (Reuters) - Washington completed negotiations with Major League Baseball on Friday for a 30-year lease on a new stadium expected to cost the city $535 million, but the deal faces a contentious vote in the City Council.

Mayor Anthony Williams said the deal for the Washington Nationals' future 41,000-seat home includes an additional $20 million upfront contribution from baseball to help cover cost overruns.

"This lease moves us one step closer to building a beautiful, state-of-the-art ballpark along the Anacostia River," Williams said in a statement. "We've negotiated a good deal for the city and persuaded Major League Baseball to concede on many fronts."

Williams earlier this week defended the project as the catalyst for a $2 billion-$3 billion redevelopment of a rundown neighborhood south of the U.S. Capitol building near the Washington Navy Yard.

Although land, construction materials and labor costs for the project have been rising, Williams insisted the city would not exceed a $535 million borrowing cap approved nearly a year ago by a 7-6 City Council vote.

He disputed estimates showing the project as envisioned last year would now cost over $700 million, but acknowledged some items had been dropped to cut costs, including expansion of a nearby Metro rail station and street reconstruction around the ballpark.

The agreement was still heavily criticized.

"This is now an even worse deal than the bad deal that seven members of the council voted for last year," said Adrian Fenty, a council member opposed to building a new stadium.

Fenty, who is running for mayor next year in a race that will not include Williams, said he favored continued use of the 44-year old Robert F. Kennedy Stadium, where the Nationals are expected to continue playing until the new stadium is ready in 2008.

The council will hold a hearing Tuesday on the lease deal and are expected to vote on it on December 20 -- one day short of the first anniversary of a vote that clinched the former
Montreal Expos' transfer to Washington.

Vincent Morris, Williams' spokesman, said the mayor would spend the next 10 days drumming up support for the project among wavering council members.

The Nationals will pay the city about $5.5 million a year in rent, but the payments will rise if attendance grows. The city will get two-thirds of non-game-day revenue at a parking garage next to the ballpark and at least 8,000 tickets a year to distribute to low-income residents.

Deutsche Bank has agreed to purchase about $256 million in stadium notes to help fund the project, with the remainder expected to be financed through city revenue bonds.