- The Washington Times - Tuesday, February 7, 2006

DC Council chairman Linda Cropp said she will introduce emergency legislation today that officially would cap how much the District can pay toward the Washington Nationals’ new ballpark.

The legislation comes after a consultant hired by the council said a new construction contract calling for a “guaranteed maximum price” for the stadium does not protect the city against all cost overruns.

Cropp also said council members will vote on the stadium’s lease today and said it likely would be approved if the emergency legislation is passed. Her surprising decision comes after a tense, two-hour meeting last night with council members and Peter CB Bynoe, a senior partner with the law firm of DLA Piper Rudnick Gray Cary who was hired by the council because of his experience in managing stadium projects.

Mayor Anthony A. Williams, in an effort to win votes for the stadium lease, last week provided the council with a construction contract that calls for the stadium to be built using no more than $320 million in “hard costs” and $68 million in “soft costs” like insurance and attorneys fees.

However, according to council members, Bynoe reported that the contract still could allow for the city to be responsible for additional costs. He noted the budget for the stadium could rise under some circumstances, such as if staying under the cap would require significant sacrifices to the stadium design.

That concerned council members, who said they will not approve the stadium lease until the city’s costs are contained. At least seven of the 13 members of the council must vote in favor of the lease for construction to begin. At last count, only five members said they would approve it without the cap legislation.

“Mr. Bynoe started out by saying that this is not a guaranteed price project,” said council member Vincent Gray, Ward 7 Democrat, who is considered a swing vote. “The bottom line now is that eight votes have not changed.”

The emergency legislation, on the other hand, requires nine votes for approval and is expected to pass. But it is unclear whether the council can pass legislation capping costs without violating the lease. Bynoe and the council’s internal lawyers have been asked to write the legislation so it does not conflict with the lease as written. A spokesman for Mayor Williams said the council must be cautious not to pass legislation that would jeopardize the existing lease.

“If they attempt to redo the entire deal, it could pose a problem,” Vince Morris said. “If they come up with something that just strengthens what we’ve already agreed to, then there’s no problem.”

Morris said city officials were surprised the council found flaws with the construction contract.

“It’s very tightly written,” Morris said. “We went over all of the elements of it. It’s extremely strong.”

Major League Baseball officials, who helped craft the construction contract, could not be reached for comment. Officials from Clark Construction, the company heading the construction effort, also were unavailable.

The council did not decide last night on its preferred cost cap, but several council members said they would be comfortable with $300 million in city money for “hard costs” and $75 million for “soft costs.”

It is still unclear whether the legislation would include a cap on land and infrastructure costs. Members said, however, that the legislation must require any potential overruns be paid for by the team, private developers or outside sources. The city plans to borrow $535 million for the stadium project. The latest cost estimate, however, is $667 million.

The city plans to contribute an additional $132 million from the sale of land at the ballpark site, plus special tax revenue from any development built there. Council members plan to meet again this morning to determine details of the emergency legislation. Cropp insisted a vote on the legislation and the lease would take place.

“We’re getting to a point where if we do not act, we’re adding to the [stadium] cost overruns,” Cropp said. “We can’t let anyone use the excuse that the council has not acted. This is a responsible approach.”

City officials have struggled to gain council approval of the stadium lease agreement for weeks. A vote had been scheduled for Dec. 20 but was withdrawn because of lack of support. MLB responded by filing for mediation in the dispute. A revised lease with additional concessions from MLB was provided to the council Jan. 27. If the lease is not approved today, the city could enter into binding arbitration, which is generally seen as a long and expensive process.

Earlier yesterday, Mayor Williams warned the council about consequences if the lease was not approved today.

“We’re basically just doing a crapshoot and saying, ‘Well, let’s just blow up all the work we’ve put in here over the last four or five months, go back to arbitration and square one and run the risk of [the Nationals] leaving in June,’” he said.

The mayor and members of the D.C. Sports and Entertainment Commission met with council members individually yesterday. Sports commission president Allen Lew said he is eager for the lease to be approved because the construction team already has an order for steel for the stadium prepared. Any delay, he said, could result in higher costs.

Stadium proponents scored a victory yesterday when President Bush’s proposed budget for Fiscal Year 2007 included $20 million to pay for upgrades to the Navy Yard Metro station, located near the ballpark.

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