- The Washington Times - Thursday, November 10, 2005

District businesses that hoped for a reduction of the tax used to help pay for the Washington Nationals’ new ballpark are unlikely to get a reprieve because of Wall Street’s insistence that the city offer more guaranteed money to back the bonds used to finance the stadium.

Earlier this year, the city entered into a partial private financing agreement with Deutsche Bank, hoping it would reduce required ballpark fee revenues from $14 million to $8 million. But Wall Street bond raters have insisted the $14 million be guaranteed from the city in order to provide investment-grade ratings on the bonds used to finance the $535 million stadium.

The news drew angst from business leaders, who supported the Deutsche Bank plan this spring on the belief it would offer them tax relief.

“For us, the whole reason to do the Deutsche Bank plan was to quite frankly lower the cost to the business community,” said Barbara Lang, president and CEO of the D.C. Chamber of Commerce. “The whole idea was to lower the impact on businesses.”

Under the Deutsche Bank plan, the bank agreed to pay $246 million toward the stadium in exchange for stadium revenues and the team’s rent payment. The rest of the ballpark would be paid for by selling bonds backed by the ballpark fee and a utility tax.

Wall Street asked for the guaranteed $14 million from the ballpark fee because it is considered the most stable of the revenue streams being used to pay for the stadium. Other streams, such as taxes on concession and ticket sales, can fluctuate.

“Certainly a lot of businesses are going to be concerned,” said Bob Peck, president of the Greater Washington Board of Trade. “But we got the sense there had to be guarantees, and that’s what we’re running into.”

The ballpark fee is collected by all businesses reporting more than $5 million in sales a year. Businesses pay between $5,500 and $16,500 annually, depending on their size. They have pushed for a different fee structure that would lessen the impact on smaller companies.

In addition, the D.C. Council could pass legislation requiring any extra ballpark fee money to be rebated to businesses.

D.C. Chief Financial Officer Natwar Gandhi has said he will support the Deutsche Bank plan regardless because it eliminates the need for the city to sell general obligation bonds, which count against the city’s debt load.

Meanwhile, Major League Baseball commissioner Bud Selig, who was in California for a meeting of general managers, told the Associated Press he is still interviewing bidders for the Nationals and offered no time line for a decision on ownership of the team.

“All these people have spent an enormous amount of time, money, effort,” Selig said. “And they certainly deserve one interview. I’ve enjoyed it. I’ve done five groups so far. I have three to go, and I’m trying to do those as quickly as possible.”

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