- The Washington Times - Sunday, March 2, 2003

These are critical days for Washington's pursuit of a major league baseball team.
With less than three weeks to go before MLB's relocation committee holds its second round of meetings with the District of Columbia, Northern Virginia and Portland, Ore., each jurisdiction is hurriedly preparing its formal pitch to the committee. Arguably, the pressure is weighing hardest on the District, which, given its size, urban setting and visible support from the city's political leadership, has been the unofficial front-runner for the MLB-owned Montreal Expos.
But the two key questions remain unanswered: Where would a new ballpark go and how would it be financed?
The District government and Sports & Entertainment Commission are getting closer to answering those questions, according to city officials and government sources. They are expected to release more information in a matter of days. Public sessions have been set for March11 and 13, the first at One Judiciary Square and the second at the Reeves Municipal Center in Northwest, to discuss the city's pending pitch to MLB.
According to those sources, the financing for a District-based stadium, while still being discussed, is closing in on four key elements. The collective aim is to raise more than $250million for a stadium projected to cost between $343million and $437million. Private money would close the remaining gap.
Tax-increment financing (TIF) This has long been seen as the primary instrument to finance a ballpark. In simplest terms, future tax revenues from ballpark-related commerce such as ticket and concession sales, parking and property taxes would be used to finance city bonds.
TIF projects are becoming increasingly popular around the country, and the instrument was used in the District for the forthcoming Gallery Place development next to MCI Center.
Facility tax Also known as a gross-receipts tax, this would levy a tax on large businesses to help pay off stadium construction bonds, on the theory those businesses would directly benefit from the stadium's existence. The tax was used during the building of MCI Center, generating more than $50million to help with infrastructure costs.
The problem with a new facility tax is that many prominent District businesses specifically asked to be taxed for the arena. The collection of that arena tax later devolved into confusion during the mid-1990s, and no substantial outcry has arisen for the tax's return.
"I'm not willing to embrace the concept of simply imposing a gross-receipts tax to help finance a stadium," said Jack Evans, City Council finance chairman. "If people come to me and actually ask for this, well, that's a different story."
Taxes on ballplayer salaries This form of taxation, better known as a jock tax, is common in dozens of jurisdictions around the country, with states like New York and California generating annual sums deep into eight figures. Despite the name, these taxes also typically apply to entertainers, lecturers and anyone who earns their income on the road. But the ultra-high and publicly known incomes of pro athletes have accelerated a new principle of taxation that states income ought to be taxed where it is earned.
This is also probably the most politically difficult of any stadium financing measure the District is considering. While a specific jock tax measure will not be part of a new commuter tax bill to be introduced in D.C. City Council on Tuesday, it will similarly require amending the city's Home Rule charter to allow taxation of nonresident personal incomes. And most of the region's congressional delegation is bitterly opposed to a D.C. commuter tax.
A House committee chaired by Rep. Tom Davis, Virginia Republican, has the power to override City Council legislation. Davis is perhaps the most strident opponents of the proposed commuter tax.
"Congressman Davis does not want to deny the District the ability to craft a [stadium] financing plan," Davis spokesman David Marin said. "But he doesn't want [a jock tax] to be a back door to something broader."
Several Capitol Hill sources say the District recently tried to get authorization for a jock tax through a rider on a House appropriations bill. That rider was discovered and extracted before the bill was approved.
cNaming rights and personal seat licenses A corporate name for a new D.C. stadium is a virtual guarantee. Even with a still-depressed advertising market and baseball's inability to generate stadium naming rights deals as large as those in football, this revenue stream likely is worth in excess of $50million.
Traditionally, stadium naming rights have been an asset held by team owners, even in facilities built entirely with public dollars. But in the District, officials are likely to retain the right to sell stadium naming rights with an plan of using that defined, contracted revenue stream as a means for further bonding power.
City officials are also studying personal seat licenses, which would be another defined, secure revenue stream. They are wary of PSLs since that form of revenue producing is much more common in football than baseball and wildly unpopular with fans. PSLs in theory provide ownership over a stadium seat to a fan that is transferable across generations. But in reality, they are a fee for the right to purchase season tickets.
Meanwhile, city officials will further reduce the four remaining possibilities for a stadium site: The RFK Stadium property, a spot near Southeast Federal Center and the District Waterfront, a location just west of Union Station near New Jersey and Massachusetts avenues Northwest, and another location north of Union Station along New York Avenue Northwest.
The spot closest to Union Station, called Capitol North, is also the closest to downtown Washington, Capitol Hill and the new Washington Convention Center. But the New York Avenue site is quickly emerging as a strong contender because of the ongoing redevelopment of the area near the intersection of New York and Florida avenues Northwest and the forthcoming Metro station there.
"Closing New Jersey Avenue for the Capitol North site, I think, would be a real problem," Evans said. "The New York Avenue site is my first choice. If we put together a sensible package that hones in on that site and maintains our position of not taking existing money from the general fund, I think we can make this work.
"But if we only end up with $150million [in public-sector support for a stadium], that's what we end up with," Evans said. "That by no means is a small sum. But there are still a number of things in play."

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