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No resolution to stadium dispute
Question of the Day
The Washington Nationals have requested the use of an arbitrator to settle a dispute with the D.C. Sports and Entertainment Commission over millions of dollars in costs related to the construction of the team’s new ballpark.
The move comes after several months of negotiations over how much the team should contribute toward the cost of furniture, fixtures and equipment, commonly referred to as “FF&E.;” The team is filing to help reach a settlement on what it views as $9 million worth of disputed costs.
“The Washington Nationals and the District of Columbia have mutually agreed that there can be no resolution to certain existing unresolved contractual issues relating to the purchase of certain furniture, fixtures and equipment,” Nationals president Stan Kasten said in a statement. “Accordingly, the team has asked an arbiter to resolve the dispute. The parties believe arbitration at this time promptly resolves issues without jeopardizing a mutual commitment to completing Nationals Ballpark on time.”
Furniture, fixtures and equipment typically include items such as sofas and chairs in suites and offices, forklifts and similar machinery. In this instance, the team is also asking the city to pay for costs relating to the installation of televisions and control rooms at the ballpark.
Sports commission chairman Matthew Cutts acknowledged an impasse in the negotiations with the Nationals but said the team’s requests are “above and beyond” what is required by the agreements between the city and team.
“We feel it’s unfortunate that the team is pursuing arbitration,” Cutts said. “We have been working with the team and the deputy mayor’s office to reach a compromise over the last several months.”
It is unclear how the process of arbitration will proceed. The lease agreement for the new ballpark indicates that any dispute must first go before a non-binding mediator, who would have 15 days to recommend a course of action. Arbitration likely would be binding and take considerably longer.
Sports commission officials, however, said they do not expect the dispute to affect the construction timeline for the ballpark. The commission already has begun ordering furniture and other items for the stadium and has no plans to stop during the arbitration process. The ballpark is scheduled to open in time for Opening Day of next year.
The effect on the stadium’s budget, however, is another matter. The city is bound to a cap of $611 million in stadium expenditures, and has less than $8 million left in contingency.
“We need to stay strictly with the budget and not spend for things outside the project,” new sports commissioner CEO Greg O’Dell said.
In negotiations, the sports commission has been represented by Cutts and O’Dell, as well as sports commission vice chairman Bill Hall. Earlier negotiations also included outgoing CEO Allen Y. Lew. The Nationals have been represented by majority owner Theodore N. “Ted” Lerner and his son, Mark, as well as sons-in-law Ed Cohen and Robert Tanenbaum. Business partner Arthur Fuccillo also has negotiated on behalf of the team.
The Lerner family purchased the Nationals last year for $450 million, after the city agreed to build a new publicly financed stadium along Anacostia waterfront in Southeast. The team, which will lease the ballpark from the city, has promised to contribute more than $50 million in upgrades but has so far provided just $9 million to the commission to fund improvements to the ballpark scoreboard and center-field restaurant.
By Ken Allard
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