Thursday, March 16, 2006

No matter how easy the Nationals’ new ballpark will be on the eyes, nothing will shake the reality that it will be one of the most expensive stadium projects ever. With construction costs alone of about $388 million, it will far surpass the expense of any other open-air stadium. And with an additional $300 million in land purchases and infrastructure upgrades, the total price tag even will rival ballparks constructed with futuristic retractable roofs.

The cost was the key driver behind a recent battle to cap the city’s commitment to the project. Earlier this month the D.C. Council passed a bill that will require the city to pay no more than $611 million. Any other costs must be paid for by the new team owner, the federal government or other private sources.

So how did the District wind up with such a record-breaking project?

A look at the major factors:

• Materials — When the city last year announced HOK Sport as the stadium architect, it told fans that the ballpark would have an “iconic” design that would distinguish it from other new facilities.

But efforts to make the ballpark unique have come with a price. The design calls for heavy amounts of steel and glass, materials that are generally more expensive than traditional brick. And the city took some minor costs when it chose to seek special certification from the U.S. Green Building Council.

Hurricane Katrina had an enormous impact on construction costs, particularly the price of steel.

“Katrina took things off the shelf,” said Allen Lew, Chief Executive Officer of the D.C. Sports and Entertainment Commission, who is overseeing the project.

Stephen Green, the city’s director of development who was involved in estimating the stadium cost, said the price of construction materials alone have gone up nearly 20 percent since estimates from 2005.

“Twenty percent on a $250 million stadium is $50 million,” Green said. “The sheer image of the numbers is staggering.”

The stadium construction team, a joint venture led by Clark Construction of Bethesda, has promised to build the stadium structure for about $388 million, including “soft” costs like insurance fees. No open-air ballpark has cost as much, and that total comes after more than $25 million in cuts to the design.

• Land — Construction of the ballpark has required a land grab unmatched in other cities with baseball. The city needed to acquire about 14 acres of privately owned land in Southeast, one of the hottest development areas of the city.

The city’s original estimate for land acquisition was about $65 million, but that figure skyrocketed along with land values in the area.

“Every time we looked at it, it went up,” Green said. “No one thought it would continue at that pace.”

The city filed to acquire much of the land through eminent domain in October, placing $97 million in a court-ordered trust to cover the costs. A court ultimately will decide how much landowners should be compensated, and attorneys for the owners said they will fight for more. The city may also incur some small additional costs in helping to find new locations for a trash transfer facility and several adult businesses on the site.

• Infrastructure — City officials disagree over whether infrastructure costs in the ballpark area should be included as part of the estimate for the stadium project or taken out and attached to other development in the area. But the latest cost estimate produced by D.C. Chief Financial Officer Natwar Gandhi in December calls for $36.5 million in infrastructure. That total, however, does not include about $30 million for parking to be placed underground at the site. And it does not include $20 million in upgrades to the Navy Yard Metro station, which likely will be paid for by the federal government.

• Delays — City officials originally thought they could break ground on the ballpark in the winter of 2005. But they encountered several delays brought on by tough negotiations that added more than a year’s worth of inflation to the ballpark price tag.

First, the city was required by the council to seek some private financing for the ballpark and have those plans certified by the city’s chief financial officer.

After that process ended in the summer, the sports commission began talks with Major League Baseball about a lease agreement for the stadium. Baseball negotiators, led by White Sox owner Jerry Reinsdorf, took a hard line, insisting that the lease reflect to the letter the Baseball Stadium Agreement signed in December 2004. The city, seeking an investment-grade rating on the bonds used to finance the stadium, asked MLB for a letter of credit to cover rent payments. It also asked for a $20 million contribution toward construction costs.

MLB eventually agreed, but things were complicated further when city officials realized they needed to submit the lease to the D.C. Council for approval. The council was scheduled to vote on the lease Dec. 20 of last year but did not have the votes to approve it. Further talks involving an outside mediator dragged on through most of January until the council finally approved a lease early in the morning Feb. 8. MLB approved the council’s request for a cap on city costs for the ballpark one month later, allowing construction finally to move forward.

Council Chairman Linda Cropp disputed the notion that the council caused delays.

“The council did not hold things up,” she said. “That is a total misrepresentation. We dealt with everything within a reasonable period of time.”

Got a question about the Nats? Mark Zuckerman has the answers. To submit a question, go to the Sports Page

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