Thursday, November 11, 2004

D.C. Council Chairman Linda W. Cropp and Mayor Anthony A. Williams yesterday agreed to a compromise that would keep on track his financing plan for a ballpark in Southeast.

Mrs. Cropp said she will bring the Williams proposal up for a full council vote by Nov. 23.

In return, the mayor and his allies on the council agreed to amend the Williams bill to provide for a six-month search for private financing for the ballpark.

The agreement ended five days of rancor over competing proposals, disputes that prompted fears Major League Baseball (MLB) would void its deal with the District to relocate the Montreal Expos to the city.

Private financing would not necessarily violate the District’s deal with MLB.The city must produce a ratified financing bill for the Southeast site by Dec. 31. However, the financing structure can be altered afterward so long as the changes do not affect the ballpark itself or the team’s revenue sources.

Several city officials said the prospects of finding a viable private source of stadium funds are uncertain and perhaps unlikely.

Private investors could not borrow against stadium revenues dedicated in writing to the Washington team. Nor could they disrupt a planned community benefit fund created through the establishment of a tax-increment financing district around the Southeast ballpark.

City officials also are concerned about the ramifications of yielding control of stadium construction to private entities.

However, the deal, brokered in part by Jack Evans, Ward 2 Democrat, and Mark Tuohey, chairman of the D.C. Sports & Entertainment Commission, brought a swift end to an embarrassing political battle within the John A. Wilson Building.

“I think Linda is in good faith looking for ways to limit the District’s financial exposure in this project, and … I fully endorse that,” Mr. Williams said yesterday, barely 24 hours after excoriating her move to delay by two weeks a council vote on ballpark legislation. “I happen to think the interest in private financing reinforces our view of the merits of this site.”

The timing of the six-month search is tied to June 2005, when the first payments on the bond issue for the stadium are expected to be due.

“I am still a fan of baseball coming to Washington. That has not changed,” Mrs. Cropp said. “But I am still looking for a better deal for the city.”

The city has received about 10 unsolicited, private offers to help finance stadium costs, currently estimated by Mr. Williams at $435.2 million. Many more are expected in the next few weeks.

Foremost on that list, at least for the moment, is BW Realty Advisors, a group led by D.C. real estate investment executive and attorney Richard Gross. On Tuesday, Mrs. Cropp said a late-arriving, unsolicited plan from the Gross group prompted her to delay the council vote on the ballpark bill.

Mr. Gross and his partners propose to build the ballpark on land purchased by the city and recoup their investment by claiming lucrative tax credits against the depreciation of the ballpark.

Leveraged real estate deals relying on federal tax credits have drawn increased scrutiny on Capitol Hill, and some similar deals have been outlawed.

Mrs. Cropp, Mr. Evans and Mr. Tuohey met with Fred Cooke, an attorney from the Gross group, and two points quickly became obvious: It was impossible to investigate the new proposal thoroughly in two weeks, and the search for private funds shouldn’t be limited to one group.

“We asked a lot of questions that didn’t get answered,” Mr. Evans said. “There weren’t really numbers on the table. What we’ve seen from them doesn’t really tell you anything.”

But Mr. Evans, who on Tuesday also criticized Mrs. Cropp, yesterday endorsed the six-month search for private funds.

“What if a better deal does come along? You just don’t know yet. We have to bear all this out,” he said. “But I firmly believe we will pass a stadium financing bill, and there will be a stadium at the Southeast site. Baseball will be here.”

The funding structure for the ballpark currently calls for up to $550 million in publicly financed bonds, paid off with a combination of ballpark-related sales taxes, annual lease payments from the team, and a gross-receipts tax on large city businesses.

Mr. Evans and Mr. Williams each cited the financing of MCI Center, home of the NBA Wizards and NHL Capitals, as reason to conduct the search for private funds.

MCI Center, located downtown in Northwest, originally was intended to be financed with public funds. However, television magnate Robert Johnson produced a late bid to fund construction of the arena, forcing Wizards’ owner Abe Pollin to change his deal with the city. Mr. Pollin funded the arena himself, with the District contributing about $70 million for land and infrastructure.

The Gross group is due to meet with Mrs. Cropp and other city officials again Monday. Mr. Cooke declined to comment after the meeting yesterday.

The council could vote on the ballpark measure next week because some members will not be in town during Thanksgiving week.

Mr. Williams has the necessary seven votes in place to gain approval of the measure. Harold Brazil, at-large Democrat, yesterday called the group “the magnificent seven.”

“We want baseball here and won’t accept any other answer,” Mr. Brazil said.

The compromise reached yesterday increases the chance that other council members will cross over to vote for the mayor’s plan.

“Last week, we found ourselves in a storm,” said Vincent Orange, Ward 5 Democrat, referring to Mrs. Cropp’s attempt to move the ballpark site to the grounds of RFK Stadium. “But the storm is now passing, and the waters are now calming.”

Copyright © 2022 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.

Click to Read More and View Comments

Click to Hide