D.C. officials now scrambling to keep down the costs of a new ballpark for the Washington Nationals say they were victimized by a combination of factors, not the least of which were out-of-control markets for materials and land.
Officials from the city and the D.C. Sports and Entertainment Commission said they were forced to predict the cost in 2004 before knowing where the ballpark would be built or what it would look like and that unforeseen delays contributed to rising costs that have pressured the city to stay under a $535 million budget.
City officials originally budgeted $244 million for the ballpark, not including land and infrastructure costs. The price of the ballpark itself has since risen to about $300 million, even after some cutbacks to nonessential parts of the design.
“When we made the estimates, we didn’t even know what site we were building on,” said Stephen Green, director of development in the Office of the Deputy Mayor for Planning and Economic Development, who helped craft the initial estimate. “We had not even a drawing.”
Subsequent cost estimates performed by Natwar Gandhi, the District’s chief financial officer, called for an additional $161.4 million for land acquisition and environment cleanup and $76 million for infrastructure costs.
Mr. Green said the cost of materials has since skyrocketed more than anyone could have anticipated, largely because of Hurricane Katrina and other natural disasters. He said the city budgeted for a more-than-10 percent increase in the price of steel over two years, but that prices exceeded even those estimates. A nine-month delay in breaking ground on the stadium also has raised the stadium’s cost. Construction on the ballpark is scheduled to begin in March.
Land costs, which are particularly high in the District compared to most areas, have risen to about $98 million, or $21 million more than expected. The true cost of many land parcels is still not clear because they are being acquired using eminent domain, a process in which a court decides how much landowners will be compensated.
Officials stressed that there are contingencies built into the stadium budget, including $11.9 million for land acquisition. The city also will save about $27 million because it will not have to excavate a sewer line that had been budgeted for removal.
It also will ask the federal government and private developers to take on most of the cost of infrastructure upgrades around the stadium, though some members of the D.C. Council have said doing so would be against the law, arguing that ballpark infrastructure costs should be paid for by the city.
D.C. officials plan to begin selling $535 million worth of bonds to finance the stadium on Dec. 15.
“There are no cost overruns … it’s all manageable. We’re going to build the stadium for $535 million,” said Mark Tuohey, chairman of the D.C. Sports and Entertainment Commission. “It’s true; you’re never going to know [the true cost], except you then have to value-engineer it to that number.”
Some confusion over costs appears to stem from conflicting messages sent to the stadium architect, Hellmuth, Obata and Kassabaum (HOK). City officials stressed the importance of staying within budget, but they also endorsed early on a plan for a modern, landmark stadium featuring steel, glass and stone, which is generally more expensive than the traditional brick.
Also, some officials apparently had asked for several different designs from HOK, but the architect did not submit them.
“I asked HOK for three designs and they came back with one, because that’s the one they wanted to build,” said Jack Evans, Ward 2 Democrat and chairman of the D.C. Council Committee on Finance and Revenue, who has endorsed a more-traditional brick design.
Mr. Green, however, said the stadium design itself is not inherently too costly, and that HOK can maintain the design but use less-expensive materials. The commission has been working with HOK to make other cuts, including removing several plazas that surround the ballpark and moving some office space to other locations.
In addition, HOK currently is working on an alternative design that will include more brick and less stone and glass.
Mr. Tuohey and other city officials are expected to reveal more about cuts and the stadium budget during a joint hearing before members of the D.C. Council on Monday.