Council receives lease documents

Mayor Anthony A. Williams provided several key documents to the D.C. Council yesterday he said will persuade council members to pass a lease agreement for a new ballpark for the Washington Nationals in Southeast, but the seven votes needed for approval are still not locked down.

Council members said they will spend this weekend reviewing hundreds of pages of new information, all of which seek to address the council’s demand that the city’s costs for the stadium be controlled. A vote on the lease is scheduled for Tuesday, and must be approved for construction to begin.

Members will look at a contract with the stadium construction team that calls for the ballpark structure to be built for no more than $320 million, plus a maximum of $68 million for “soft costs” such as legal fees and insurance. Also, members will review a series of commitments from two real estate developers, who have agreed to pay the city $70 million for the rights to build on three parcels of land directly next to the new ballpark for the Nationals. The parcels allow for 1.4 million square feet of development.

Under the land sale agreement, the quasi-public Anacostia Waterfront Corporation will receive $55 million from the sale, with the remaining $15 million turned over to Major League Baseball, which owns the Nationals. The AWC’s proceeds will go to cover $13 million in infrastructure costs, and could go to cover up to $20 million in cost overruns for land acquisition, if necessary.

The developers buying the land include Forest City Washington and D.C.-based Western Development, who were selected by the city in December to develop a retail and entertainment district near the ballpark. The sale still must be approved by the AWC Board of Directors.

“I’ve provided the council with documentation of some key points,” Williams said. “I’m hopeful. I believe we are making progress on this. We’ve moved heaven and earth to get these materials to the council. We need to have a vote on Tuesday.”

The city plans to borrow $535 million for the project using revenue bonds paid back through gross-receipts and utility taxes on businesses, an annual rent payment from the team and through taxes on concessions and tickets from the stadium. However, the last cost estimate for the stadium is $667 million, leading some council members to call for outside revenue streams and a cap on construction costs.

The council has hired attorneys from the law firm of Piper Rudnick Gray Carey to review the agreements and the stadium lease. Council Chairman Linda Cropp said she was unsure of whether the council would approve the lease Tuesday, since the attorneys and many council members had not yet reviewed many of the new documents.

Council member Kwame Brown, at-large Democrat, said he hadn’t had a chance to review the new construction contract, but was not moved by the commitment from developers. He has said he would prefer the city retain all the revenue from the land on the ballpark site.

“I’m not there yet,” said Brown, who is considered a swing vote. “I have asked chairman Cropp to postpone the vote.”

Marion Barry, Ward 8 Democrat, also objected to MLB getting $15 million from the sale of land, and said he was still unclear what the city’s costs would be.

“The big issue is when you add all this up, what is it going to cost the city?” he said. “The biggest issue of contention for me is that baseball is getting something for nothing. They’re not going to make money on us.”

Under the new construction agreement, Clark Construction, Smoot Construction and Hunt Construction will take control of the stadium, and build it according to a set of parameters agreed upon with the city, sports commission and team. The contract will be included as part of a broader Construction Administration Agreement, which also requires council approval.

In addition to contributing its share of the land sale to the ballpark project, the AWC expects to raise $60 million from special taxes from the development to be directed toward the stadium project, and it will collect $22 million from on-site parking revenues. In total, the AWC said it will contribute up to $132 million to the project.

City officials also said they expect $20 million for upgrades to the Navy Yard Metro Station to be included in President Bush’s 2007 Budget, which will be presented Monday.

Officials from the D.C. Sports and Entertainment Commission said the construction contract calls for a groundbreaking on the stadium by March 1. Any delay would result in penalties of up to $5 million to the city.

However, the construction team also said it can meet the city’s goal of opening the stadium by March 2008 if it can begin construction by June. To meet that deadline, the city must still gain possession of 14 acres of land at the 20-acre ballpark site, and prepare the site for construction.

Council support for the ballpark lease agreement has been elusive since early December, when sports commission officials and MLB first completed a lease agreement. The council was scheduled to vote on the lease Dec. 20, but the vote was postponed because of a lack of support. The city and MLB began working with a mediator to help resolve the dispute, and the revised lease agreement with more concessions from MLB was submitted to the council last week.