In the midst of baseball chaos, the District has become the darling of the world of private finance.
Buttressed by the newly legislated requirement pushed through by D.C. Council Chairman Linda W. Cropp to fund at least half of the construction costs of a ballpark in Southeast with private funds, more than a dozen new entities have approached city officials in the past two days.
Each new group, coming from worlds as disparate as Wall Street banks and online gambling, eyes itself as the white knight that will keep the Washington Nationals in town.
“Oh sure, my phone has been ringing constantly, lots of e-mails,” said Jack Evans, Ward 2 Democrat. “Everybody wants a piece of this now. The problem is, we need a process [to review the proposals] and we don’t really have a process anymore.”
Chris Bender, spokesman for the mayor’s office of planning and economic development, said, “There are lots of people suddenly curious about this project, no question. Some people calling are the financiers themselves. Some are intermediaries. It’s been all over the map.”
The interest is significant because in coming days, the stream of inquiries no doubt will advance Mrs. Cropp’s argument that private investment can and should be part of plans to build a stadium. The new proposals are in addition to the more than 20 that already had reached the Wilson Building before the council’s second approval on Tuesday of the stadium legislation.
An amendment in the council’s first review of the stadium legislation on Nov.30 mandated a formal search for private stadium funds, with a deadline of June to identify funds or simply revert to the original financing model calling for total use of public bonds to pay for the stadium. The formal request for proposals based on that amendment is due to be issued next week.
Mrs. Cropp, however, went a critical step further on Tuesday by including legislative language that voids the entire stadium deal without at least 50 percent of hard stadium costs being paid with private money. That new clause quickly prompted Major League Baseball to call the legislation “wholly unacceptable” and openly threaten to move the Nationals elsewhere if the measure is not corrected.
The District has until Dec.31 to save the baseball deal. The most likely solution is for Mrs. Cropp to pull back her amendment, perhaps in exchange for some other clause that firmly pushes D.C. Mayor Anthony A. Williams to seek out private funding for the stadium but does not wipe out the entire deal if no suitable private source of money is found.
But some of the new proposals have arrived hoping to be included into a stadium deal by the Dec.31 deadline. That simply will not happen. D.C. Chief Financial Officer Natwar Gandhi must formally ratify any source of stadium funding, a process that could take as long as four months.
The other significant hitch in the quest for private financing is that many of the offers want access to stadium revenues that already have been earmarked for the Nationals or the city.
“They all want something,” Mr. Evans said. “These entities all want something to recoup their money, and I’m not sure what we can really offer.”
One new proposal arriving yesterday was from EmpirePoker.com, a New York-based online gambling site. The company offered to provide up to $500million in stadium financing in exchange for the right to place Internet kiosks in the ballpark that allow people to play online poker. The company also wants to name the facility Empire Poker Stadium.
Under the relocation deal, naming rights are the exclusive asset of the Nationals to sell as they wish.
“We’re trying to find further ways to leverage the excitement around poker, and we think this could be a great opportunity for everybody, particularly with the stadium-financing problems at hand in Washington,” said Ron Burke, president of marketing for EmpirePoker.com. “We do believe there is room for negotiation with regard to the naming rights.”
Another proposal much further along in the review process is one involving curbside parking around the stadium, in which a private company would give the District part of its revenue to service bonds on the construction. Mr. Gandhi is close to certifying that proposal, but logistical concerns about the plan have not been fully addressed.
More broadly, the Cropp-led search for private funds also opens a definitional quandary. Some city officials have argued privately that the stadium financing already includes vast amounts of private money between the annual lease payments from the Nationals and the gross-receipts tax on large D.C. businesses. Collectively, those two income streams are slated to fund more than half of the stadium project.
“In a lot of respects, the city is acting as simply a conduit for those business funds because we can go out and get better interest rates on the bond market than if they were to pool the money themselves,” said one D.C. official close to the baseball deal.
