- The Washington Times - Wednesday, March 16, 2005

D.C. Council members yesterday gave an overwhelmingly negative review to two certified offers of private financing for the Washington Nationals’ planned ballpark in Southeast, raising the likelihood of the current public funding plan remaining in place.

Natwar Gandhi, District chief financial officer, will take the next two weeks to conduct a second and more focused evaluation of the District’s existing financing plan against a loan program from German financial giant Deutsche Bank and a proposal from the Cleveland-based Gates Group involving revenues from curbside parking near the ballpark.

But nearly the entire council believes the city already has made its best possible deal to fund the stadium construction. The ballpark near the Anacostia River waterfront, as of now, is slated to be paid for with a combination of ballpark-related sales taxes, annual lease payments from the Nationals, a utility tax on District businesses and government offices, and a gross-receipts tax on large corporations in the city.

“There’s nothing on the table that we can’t do ourselves,” said Jack Evans, Ward 2 Democrat, echoing a statement he has made for months. “That’s the answer. There’s no real private money to be had, and I think more people are finally understanding that.”

Both the Deutsche Bank and Gates Group offers require the acquisition of revenue the District had planned to use to retire its own debt on the ballpark. According to District sources, Gandhi already has told the council either proposal would be at least $30 million more expensive than the District plan ratified in December.

“This ought not be a shell game that just worsens the deal for the District of Columbia,” said Jim Graham, Ward 1 Democrat.

Council chairwoman Linda Cropp, who last fall played a key role in implementing the search for private stadium money amid a heated political battle, said she was not yet ready to give up on the Deutsche Bank proposal. She and most other council members saw no substantial promise in the Gates Group parking plan, involving an up-front payment of up to $175 million to the District in exchange for the right to establish a parking district around the stadium.

But she said she will ask Deutsche Bank to make a revised proposal that involves less borrowing than the $493 million peak amount offered.

“All the offers came in way higher than we were asking,” Cropp said. “We’re only looking for $140 million [to fund half of the hard construction costs]. So if we get to look at something involving less money, we can see what’s really the best buy for the city.”

The fulcrum of the private financing debate now appears to rest on whether cost savings or protection from risk is the higher goal. The private financing offers are gaining so many opponents because they all require borrowing at a higher interest rate than what the District would be offered. But the private offers also would assume some financial responsibility in the event baseball in Washington does not work as intended.

“The District can always borrow at a cheaper rate, no doubt,” Gandhi said. “But some of these revenues are not entirely stable, namely the concession revenues, the parking, the ticket tax. If attendance goes down, there is a heightened risk.”

The Deutsche Bank bid also calls for reaping as much as $7.6 million a year from advertising revenues from Metro bus shelters around the city, which could also cause political problems within the council. The District recently signed a new contract with Clear Channel Communications for the shelter ads, and city administrator Robert Bobb said he and Mayor Anthony A. Williams have other ideas for that revenue, but declined to specify them.

As the ballpark legislation currently stands, the mayor must recommend one or both of the ratified bids to the council within 15 days for formal approval. Bobb and Williams will conduct a secondary review of the Gates Group and Deutsche Bank bids to mirror Gandhi, within the next week. It is possible Williams and the council will agree to not move forward on either bid.

Gandhi’s initial review of eight offers of private financing eliminated six bids, five of which sought to gain real estate development rights near the stadium. The offers were rejected in part because of concern the District could not legally gain land in the ballpark area through eminent domain and then transfer it to a private entity without competitive bidding.

The decision proved a major disappointment for Georgetown developer Herb Miller, whose plan for a massive retail and residential development near the ballpark had won many fans within the John A. Wilson Building.



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