- The Washington Times - Friday, December 23, 2005

D.C. officials have so far failed to persuade developers and the federal government to chip in for a new ballpark for the Washington Nationals on South Capitol Street, raising questions about whether D.C. Council members can be convinced of approving a lease agreement for the stadium.

The council was scheduled to vote on the lease last Tuesday, but Mayor Anthony A. Williams delayed the vote because he did not have the necessary seven votes for approval. As many as five council members said they will reject the lease unless the city gets commitments from developers, the federal government or other outside sources to pay cost overruns, including infrastructure and upgrades to the Navy Yard Metro station.

On Tuesday, Mr. Williams said the city “has a commitment from developers to pay for the infrastructure costs,” but his spokesman yesterday acknowledged that no such promise had been made.

“Last I checked, we didn’t have anything in writing,” said Vince Morris, the mayor’s spokesman. “The question is, how do we get these ironclad commitments from developers when they don’t know if [the stadium] is going to get built? We’re trying to get them to commit to things, and they’re saying, ‘Where’s the stadium? We’re not negotiating from a position of strength,’”

Currently, the city can support a $631 million ballpark project based on $535 million in borrowing, plus a $20 million contribution for baseball, interest and premium on the bonds and tax revenue earned from the Nationals this year. However, the most recent cost estimate for the project is $667 million, causing the city to seek outside funds. The city is not authorized to borrow more money or take cash from the general fund.

“I’m still trying to figure out, how do we deal with the cost overruns?” said Vincent C. Gray, Ward 7 Democrat, who was expected to vote against the lease. “It’s very difficult to vote for something when you don’t know how things will be paid for. I’ve seen nothing new.”

If the council does not approve the lease by Dec. 31, Major League Baseball (MLB) could take the city to arbitration because it would be in violation of the baseball stadium agreement it signed last year.

The council, however, is not expected to meet again until Jan. 4, and several sources said it may not vote on the lease until at least the middle of January. City officials said they will continue to negotiate with MLB to change some provisions in the lease even after the Dec. 31 deadline.

The city is speaking with two large development groups selected last week by the Anacostia Waterfront Corp. to create a retail and entertainment district around the stadium. Developers said they expect to pay infrastructure to support those new businesses, and said the development and the stadium should be viewed as a single project.

“It’s a discussion about what’s in the budget for the stadium and what’s in the budget for the development, and if there are overlaps,” said Jair Lynch, president of the Jair Lynch Cos., one of the developers involved in the project. “We believe there are overlaps.”

City officials said they now think they made a mistake by originally including Metro and infrastructure in the budget for the stadium, knowing that much of that work would need to be done to support the surrounding development anyway.

“When we built the MCI Center, if we had included every little thing we did to upgrade the area into the cost of MCI, it would be in the billions,” Mr. Morris said. “You have to think of it just as city development.”

Developer Franklin Haney and Jonathan Ledecky, who are leading two of eight groups that bid $450 million for ownership of the Nationals, recently told council members they would contribute money for stadium costs if they were selected to own the team.

While those offers won over some council members, city officials said those promises are essentially meaningless because MLB is not expected to award the team to either group, especially now that their offers violated a specific request by the league to stay out of issues relating to the lease.

MLB has said it will not select an owner until the lease is approved by the council, and has refused to pay any more than the $20 million it agreed to in the lease agreement. The agreement signed by the city last year requires that all costs associated with the stadium be borne by the city.

City officials said they believe money for infrastructure eventually will come from private developers. But money for Metro upgrades could be a taller order. The city has argued that the improvements to the Navy Yard Metro should be paid for by the federal government because the station will be used heavily by new federal workers at the Navy Yard and nearby U.S. Department of Transportation.

The current stadium budget only calls for $250,000 worth of upgrades to the Navy Yard Metro, which would not cover any additional entrances or escalators. Officials acknowledge that more Metro upgrades will be needed, and D.C. Chief Financial Officer Natwar Gandhi’s estimate calls for $19.9 million in work on the Navy Yard station.

“No one from the White House or [Office of Management and Budget] has said ‘no way,’ and we consider that progress,” Mr. Morris said. “[The council] would like to have something ironclad … but it’s not going to be easy.”



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