- The Washington Times - Thursday, December 16, 2004

Major League Baseball executives yesterday said the District’s new requirement to include private financing to pay for half of a proposed baseball stadium in Southeast is “wholly unacceptable” and promised to move the Washington Nationals elsewhere if the measure is not corrected.

“The legislation approved by the District of Columbia City Council [Tuesday] does not reflect the agreement we signed and relied upon after being invited by District leaders to consider Washington as a home for Major League Baseball,” said Bob DuPuy, MLB president. “The legislation is inconsistent with our carefully negotiated agreement and is wholly unacceptable to Major League Baseball.”

Following up that displeasure, MLB also suspended the Washington Nationals’ business and marketing operations indefinitely, postponed a planned display yesterday of the team’s new uniforms and is offering refunds to anyone who paid deposits on Nationals season tickets.

The lords of baseball, however, were just a few of many stunned parties after D.C. Council Chairman Linda W. Cropp late Tuesday ushered through a surprise amendment mandating at least 50 percent of hard stadium costs be paid for with private money. Without that private money identified by June, the entire deal to move the Montreal Expos to Washington and building the new ballpark will be voided.

It is that lack of a guarantee of the stadium’s completion that MLB is rejecting.

“I am deeply troubled about what’s happened. We have not lived up to our commitments,” said D.C. Mayor Anthony A. Williams, who has staked much of his political legacy on the baseball pact. “I believe the deal is broken. The dream is now close to dying. We’re in great, great jeopardy here, and I think I’m being optimistic.”

Mr. DuPuy said MLB might entertain other relocation offers if a Dec. 31 deadline passes without the council passing an acceptable version of the stadium legislation.

“This is a not a negotiating ploy,” said Bill Hall, board member of the D.C. Sports & Entertainment Commission and one of the key negotiators of the relocation deal. “This reaction clearly reflects the overwhelming concern baseball has with what’s happened.”

Mrs. Cropp, meanwhile, said for the first time yesterday that she is “willing to let baseball walk” if the two sides cannot come to terms.

Previously, Mrs. Cropp had vowed that she would not let the baseball deal die, even as she tried several political maneuvers to lower the city’s investment in the stadium.

“I have a 30-years-plus deal with the residents of the District of Columbia that trumps any other consideration with Major League Baseball,” Mrs. Cropp said.

Mrs. Cropp said both yesterday and Tuesday that she was upset with a letter from MLB outlining a series of negotiated givebacks to the city, including a $19 million per year cap on compensatory damages if the District does not deliver the new stadium by March 2008. She called the new terms insufficient, which was a sweeping change from Monday, when she said she saw “a tremendous amount of progress” in talks with MLB over the same givebacks.

The most likely option to solve the political logjam is to have the council conduct a formal reconsideration of the amendment on Tuesday, when its Committee of the Whole is scheduled to meet. One of the seven members voting yes on the stadium bill would need to make the motion to reconsider. Mrs. Cropp said yesterday she is open to such a scenario, but only if another defined means to lower the stadium’s cost to the city is found.

Some stadium supporters, however, said such a method already arrived Tuesday in the form of a massive reduction in the gross-receipts tax on large city businesses that would have paid the bulk of stadium costs. The maximum fee to business has been lowered from $48,000 per year to $16,500. The revenue shortfall from that decrease will be recovered by capturing a portion of utility taxes paid by business and government entities in the District for fuel, electricity and telecommunications.

If the relocation pact were to be voided, the Nationals most likely will still play at RFK Stadium for the 2005 season. The team, even if the council fails to ratify financing for the new stadium, retains the right to negotiate a short-term lease for RFK. MLB, however, likely would use the 2005 season to seek out a new home for the vagabond club, with Las Vegas topping the list.

The uncertainty also freezes the ongoing sale process for the Nationals, currently owned by MLB. A recently started auction for the team is predicated on the firm commitment of a D.C. ballpark.

Mrs. Cropp’s amendment shocked many observers not only because of its punitive terms, but also because it extended an earlier amendment from her that had required Mr. Williams to recommend one offer of private stadium financing to the council. The mayor and his staff were amenable to that requirement because it contained language reverting the stadium financing back to the original model if no certifiable source of private funds was found.

As Tuesday’s 13-hour legislative meeting wore on, however, Mrs. Cropp said she thought that original amendment was not tough enough. Moreover, Mrs. Cropp all but admitted yesterday that she does not trust Mr. Williams and his staff to pursue private financing vigorously without the threat to void the whole deal.

“I truly believe private financing is doable, but I’m not sure everyone has the will to make this happen,” she said.

City officials have received about 20 offers of private stadium funding, with the solicitations scattered about various council members and mayoral staffers. None has received the needed certification from Chief Financial Officer Natwar Gandhi.

One offer, involving the use of a curbside parking program, could be close to garnering Mr. Gandhi’s approval. But it is unknown whether the plan will be implemented or how much money it might save the city, although Mrs. Cropp has suggested that the sum could run as high as $100 million.

More broadly, the concept of private financing has concerned several council members and Williams administration officials, because many offers that were preliminarily reviewed have wanted access to stadium revenues already dedicated to either the city or the Nationals.

“It’s not as easy as some might think,” said Jack Evans, Ward 2 Democrat. “Each one of these wants something to recoup their investment, and I’m not sure what we can offer them from the stadium.”

Mr. Evans, however, added, “We’re not going to lose baseball. I think we’re going to find a way to work this out.”

The hard stadium costs are currently pegged at $284 million, meaning the mayor would need to secure half of that from private funds. The city would cover infrastructure costs for the facility near the Anacostia River waterfront. Before Mrs. Cropp’s amendment, the city was due to secure bonds for the entire stadium cost, estimated at $435.2 million, with the debt paid for with annual lease payments from the Nationals, ballpark-related sales and use taxes, and a gross-receipts tax on large D.C. businesses.

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