Sunday, September 23, 2007

With every day that passes, the memories of the Washington Nationals as a downtrodden, vagabond baseball franchise grow increasingly distant.

Photo Gallery: A whole new ballgame

More than a year has passed since the family of real estate developer Theodore N. Lerner took control of the team, and as the ownership group completes its first full season at the helm, a feeling of optimism abounds.

The club’s once-neglected farm system is being restocked with talent. Money is being spent on everything from player development to entertainment consultants. And a new, $611 million ballpark for the team is quickly rising along the Anacostia River.

But it hasn’t been easy.

The Lerners, known for their expertise in the real estate realm, were forced to jump headfirst into unfamiliar businesses such as suite sales and sponsorship. The team’s aging current home, RFK Stadium, offers as much aggravation as rustic charm.

And as the family works diligently to shape the Nationals into one of baseball’s elite franchises, there are reports of a strained relationship with the District of Columbia over details of the new stadium.

“Both real estate and baseball business decisions are better made with an eye toward the longer term, and a good foundation is crucial, but as an owner and a fan, it’s sometimes much harder to be patient with the building process in baseball,” said Ted Lerner’s son, Mark, a principal owner of the team. “And, while the ups and downs of a season can be grueling, the exhilaration of sharing with others the dream of a World Series championship in Washington, D.C., is like no other feeling I’ve ever had in business.”


The Lerner family paid $450 million for a team that, by nearly all accounts, was in disarray. The farm system was depleted after three years under Major League Baseball’s control, and the Lerners, along with the team’s president, Stan Kasten, were faced with rebuilding nearly every aspect of the organization.

And despite predictions that the Nationals this season would approach records for futility, the team has been surprisingly competitive: The team stands a chance to finish with fewer than 90 losses and have played close to .500 baseball since May — a far better performance than most predicted in spring training.

“I read widely that we might be historically bad, which means one of two things: I’ve either done a historically great job of lowering expectations, or that we’ve done a historically great job of exceeding expectations,” said Mr. Kasten, who has served as the public face of the franchise as well as its top executive. “The team is better than any one of us has thought, just in terms of wins and losses.”

Wins and losses, of course, are only one measure of progress for a franchise looking to rebuild. Whether the team is on a path to sustained success may not be known for years, but one of Nationals fans’ greatest fears — that the team would be unwilling to spend money on players — appears to be unfounded.

The team this summer committed $10 million over two years to first baseman Dmitri Young and agreed to multimillion-dollar deals with several top draft picks, including sixth-round choice Jack McGeary.

Baseball America magazine last year ranked the Nationals dead last among baseball’s 30 teams in their annual organizational rankings, but team officials expect the club to be closer to the middle of the pack when the next rankings come out.

Of course, the new owners also have taken some hits.

The team angered some fans by replacing former assistant general manager Tony Siegle and a host of other longtime employees, and many fans were irked by the team’s failure to offer a new contract to broadcaster Tom Paciorek.

There were also numerous complaints of penny-pinching and delayed payments as the team worked to upgrade and consolidate its antiquated accounting systems.

But positive changes have also emerged. RFK Stadium has been cleaner and more vibrant, with more entertainment, including the hugely popular “Racing Presidents” characters. The number of appearances by players in the community has more than doubled, and the team’s community relations arm has raised thousands of dollars for various causes, despite being slow to get started. Meanwhile, plans for a new baseball academy in Ward 7 still are in the works.

Despite operating largely behind the scenes, the Lerners have been described as very hands-on owners with a deep knowledge of every corner of the organization.

“I am fascinated by how they have liked to delve into details,” Mr. Kasten said. “They really seem to enjoy it and feed on it. I am very, very pleased.”

Recent tensions

The new ballpark may be the team’s greatest source of optimism, one that will likely guarantee strong attendance and revenue streams for years to come. But development of the ballpark has also been a major source of stress.

Despite an ultratight construction timeline, all agree the facility will be completed in time for the April start of next season. But interviews with more than a dozen former and current city officials revealed that talks with the Lerners about who will pay for certain aspects of the ballpark have strained the relationship between the family and the D.C. Sports and Entertainment Commission, which oversees the project.

The officials characterize the Lerners as difficult, uncompromising and, at times, irrational. Nearly all spoke on the condition of anonymity, citing the sensitivity of ongoing talks with the team.

Most stadium negotiations have involved Ted Lerner’s sons-in-law, principal owners Robert Tanenbaum and Edward Cohen, with some talks involving Arthur Fuccillo, a managing director with Lerner Enterprises. Ted Lerner and his son, Mark, have stepped in only occasionally, sources said. All five men bear reputations as well-versed and shrewd negotiators with a penchant for taking a hard line.

Several city sources with knowledge of the ballpark discussions said the Lerner family has offered little acknowledgement of the city’s financial investment in the project and virtually no regard for the city’s efforts to use the ballpark as a driver for broader economic development.

“They’re very difficult,” said one former city official who negotiated with the Lerner family on several stadium-related issues. “There’s nothing I could say about them that would suggest anything different.”

The Lerners declined to answer questions relating to the team’s talks with the city. Mr. Kasten, while declining to address any specific talks with city officials, denied the relationship is strained.

“I think the relationship between the city has been a very productive one and a very constructive one,” he said. “The mayor has a relationship with [Ted Lerner] personally, and when they want to talk, they do. Everyone who is putting this together has a stake in making this the best it can be.”

City sources acknowledge the team is committed to seeing the ballpark completed on time but have been repeatedly frustrated by squabbles over costs related to the stadium. That frustration has been exacerbated by constant pressure on the project’s budget: The city has just a few million dollars remaining in contingency funds.

Since the beginning of this year, sports commission officials have met with members of the Lerner family almost weekly, often to review the ballpark design and determine if the team requests any changes. The team has thus far contributed about $8 million to the hard costs of the stadium, to fund an expansion of a restaurant beyond center field, upgrades to the ballpark’s scoreboard and improvements to the luxury suites.

But the family has resisted taking on other costs and has instead asked the city to contribute money toward items city officials claim are outside the scope of the ballpark plan. There also is a growing fear among those officials that the Lerners will resist contributing the $20 million as required by the stadium agreement. (The funds are due by Dec. 31.)

Some city officials blamed the disagreements on the lack of specificity in contracts drawn between the city and Major League Baseball, which were written hastily in 2005 amid threats of City Council deadlines and arbitration.

Those documents outline what will be included in the stadium project but lack detail in some areas, leaving negotiators to use five recently built ballparks as a guide. (This has led to further disagreements, as none of the stadiums are exactly alike.)

“Perhaps we should go back to the agreement and say, ‘Maybe there should be some language in there that should have been written more clearly,’ ” D.C. Council Chairman Vincent C. Gray said. “But that being the case, we would hope we would move quickly to settle this, recognizing the city has extended itself mightily.”

Other city sources, however, blame the Lerners for what they view as unreasonable negotiating stances.

At one point, two city sources said, family members argued the city should pay for the team’s uniforms. Another source said the team requested money for maintenance equipment such as brooms and forklifts. Most recently, the city and the family haggled over the cost of furniture, fixtures and equipment.

The Lerners in August filed for a third-party mediator to settle what it viewed as $9 million in disputed costs. (City sources are said to have been surprised by the amount, believing the two sides disagreed over a much smaller number.)

Privately, several city sources expressed disappointment that the Lerners would take the city to mediation rather than continue negotiating. But other city officials defended the family’s stances.

“It’s a business, and they’re going to do whatever is in the best interests of their business,” said council member Kwame R. Brown, at-large Democrat and chairman of the council’s Economic Development Committee. “Any time you build a stadium in a short amount of time, you’re always going to have a situations where it’s not a love-fest type of relationship.”

D.C. Mayor Adrian M. Fenty is also a Lerner loyalist.

“The city has the Lerners in just the utmost regard,” said Mr. Fenty, who speaks directly to Ted Lerner an average of once every other week. “They are one of our major league sports owners, and we take that extremely seriously. We think that they run a first-rate organization, and we’re working with them on a daily basis to get the stadium done on time and on budget.

“The Lerners, just like a lot of other people, didn’t negotiate this deal. They bought into it, and to their credit, they have lived within the four corners of the document.”

When asked about negotiations with the Lerner family, sports commission chairman Matthew Cutts declined to comment, as did Allen Lew, the commission’s former chief executive officer. Greg O’Dell, the commission’s current CEO, also declined to comment, except to reiterate the city’s commitment to completing the project on time and on budget.

“We are confident that we will get the project done by opening day, and we’re also confident we can bring the project in under the cost cap,” Mr. O’Dell said.

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