- The Washington Times - Tuesday, March 11, 2003

District officials are proceeding on a baseball stadium financing plan that will amount to as much as $275million and will rely foremost on a three-pronged revenue stream of ballpark-related sales tax, a gross-receipts tax assessed on large D.C. businesses and taxes on players salaries.
The plan to be presented to the public tonight and Thursday and Major League Baseball next week is designed to keep within the city's goals of not siphoning existing money from the general fund and having no more than 80 percent of the total ballpark project publicly financed.
It is also politically risky given the District's current inability to tax nonresident incomes and the unpopularity of the gross-receipts tax during its previous existence from 1995 to 2001.
Meanwhile, city planners also are winnowing their site options from five finalists to three: the RFK Stadium property, a location on M Street SE near the District waterfront and another spot near the intersection of New York and Florida avenues NE.
This latter spot has become the clear choice of Mayor Anthony Williams, prospective team owner Fred Malek and many prominent members of the city council given the ongoing redevelopment of the area, its alignment along the New York Avenue gateway in and out of the city and a forthcoming Metro stop there. But MLB executives and the public both would have significant say in the final decision.
Two spots between Mount Vernon Square and Union Station have been scrapped because of concerns over political opposition, high cost and difficult traffic issues.
"This all remains a balancing act," said Steve Green, special assistant in the city office for planning and economic development and one of Williams' lead personnel on the baseball effort. "The best public financing deal is not necessarily the one with the most public dollars but the most solid, secure and sensible one.
"At the end of the day, this plan will look different than where we are now, but this puts us in an excellent position to continue moving forward," Green said.
The city's goal is to generate between $7million and $10million a year from stadium-related sales tax on items like tickets, parking and concessions; $4million to $6million on taxes on players salaries; and $9million to $11million a year from the gross-receipts tax.
The combined $20million to $27million in annual tax revenue would be sufficient to service between $275million and $415million in municipal bonds at current interest rates. That borrowing power would then be diminished somewhat by a variety of borrowing costs, including the establishment of proper debt reserves.
The remaining funds for a stadium would derive from private sources like naming rights, other long-term sponsorship contracts and personal funds. Green said the naming rights might move from the private side of the equation to the public side should both the city and team owner decide to use those funds for additional bonding power. Such a move, however, likely would offset the private capital needed to finance the stadium construction.
The total projected cost of a stadium, based on the three remaining site options, is between $342.3million and $430.7million
"Given all the options still before us, I remain confident we will successfully bridge the gap to get this done," Malek said.
Many obstacles remain before those plans become reality, not the least of which is Washington actually getting a baseball team.
The largest hurdle is amending the city's Home Rule charter to allow taxation of nonresident incomes. Rep. Tom Davis, Virginia Republican and chair of a House committee that can overrule city council legislation, is not opposed to a jock tax. But he does not want to see it become a means to a larger commuter tax the council seeks.
The gross-receipts tax, also known as the arena tax, was used to fund the city's investment in the MCI Center infrastructure. While more than four of every five District businesses were exempt from the tax, the assessment and collection of it was often marked by comical errors and mismanagement. Jack Evans, city council finance chairman, said he will support re-establishing the tax only if requested to do so by the business community.
"We would be supportive of a return of that tax but with several caveats," said Robert Peck, president of the Greater Washington Board of Trade. "It is important to remember that baseball needs us as much as we want them. It is imperative that our leaders go and make a sound business deal. There is no reason to pay an arm and a leg for this."
A city-led contingent led by Williams will meet March20 with MLB's relocation committee in Phoenix to present the site and financing plans. The committee, chaired by Chicago White Sox owner Jerry Reinsdorf, intends to make a recommendation in mid-July on the preferred new home for the MLB-owned Montreal Expos in time for a move before the 2004 season.
MLB commissioner Bud Selig, however, has left open the possibility of the Expos not relocating until after 2004 season.
No actual stadium legislation will be sought before the Phoenix meeting, said Eric Price, deputy mayor for planning and economic development.
"It appears the District is getting a plan together, but political questions remain, legal questions remain and financial questions remain," said Marc Ganis, a Chicago sports industry consultant that worked with the District in the mid-1990s on MCI Center financing. "The plan is getting there, but we still don't know if it will get them to the finish line."
The District's competition for the Expos includes Northern Virginia and Portland, Ore. Neither jurisdiction has been nearly as forthcoming publicly about its stadium plans.
Tonight's public session will be held from 7 to 9p.m. at One Judiciary Square, while Thursday's is at the Reeves Municipal Center from 6 to 8p.m.

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