New bill focuses on private funds

District Mayor Anthony A. Williams has sent the D.C. Council new legislation to incorporate recently certified private financing proposals for the Washington Nationals’ planned ballpark in Southeast.

The bill, which marks a key step in council chairman Linda Cropp’s push to lower the public-sector cost in the stadium, seeks to establish a legal framework by which the new funds can be included into the ballpark project and achieve the sought-after cost savings.

Among the key elements of the new bill:

• It gives Williams the authority to enter into a contract to obtain private financing for the stadium, as well as lower the gross-receipts tax on large District businesses if the city is current on its debt for the ballpark and lending reserves are at least $14million. The bill also would allow the gross-receipts tax, a major flashpoint in last year’s stadium financing fight, to be raised if necessary, but city officials believe such a step is unlikely given the expected inclusion of private financing.

• It divides the overall ballpark area near the Anacostia River waterfront into two tax-increment financing districts: one for the ballpark itself in which tax revenues would help pay the debt on the facility and a second for the surrounding area in which newly generated tax funds would go to a community benefit fund established last year by Williams. Without the split, there would have been a double claim on some tax funds.

• It directs the immediate payment of excess ballpark funds, after debt service and reserve obligations are met, to a new revenue fund for economic development in the South Capitol Street area and then into Williams’ community benefit fund.

The new legislation does not list any specific sources of private financing by name. But last month, District Chief Financial Officer Natwar Gandhi recommended the use of $246 million of debt financing from Deutsche Bank in combination with the city’s existing financing structure. The city plan is a multipronged approach using ballpark-related sales taxes, team lease payments and tax funds from District businesses and federal government offices.

Williams plans to outline his goals for private financing later this week in a memo to council members.

“This bill is the mechanism and framework to make this all happen. The meat will come in a few days,” said Gregory McCarthy, Williams’ deputy chief of staff.

But the Williams administration likely will not endorse Deutsche Bank’s bid to the extent Gandhi did. Williams aides are developing an ?alternative financing? vehicle that will incorporate elements of the Deutsche Bank proposal.

“It’s similar to Deutsche Bank but more public and perhaps may be a cheaper way to do this,” said Steve Green, director of development in the mayor’s office of planning and economic development.

Green, however, declined to say the Deutsche Bank bid was not being considered by Williams, calling it “a credible proposal.”

On a parallel track to the ballpark financing itself, District officials continue to study development bids for the ballpark area, including from Georgetown builder Herb Miller. Green said such proposals are being encouraged to have as much collateral development near the ballpark done or nearly done in time for the scheduled 2008 opening.

Jack Evans, Ward 2 councilman, said last night he has not seen the legislation, but his finance committee will hold hearings on the legislation in the next several weeks. Williams’ aides intend to have the bill passed before the council takes its summer recess.