Washington Nationals may finally meet expectations — on and off the field
By Marc Fisher,
In 2004, when Major League Baseball was demanding a 100 percent city-financed stadium in exchange for its forlorn Montreal Expos franchise and the D.C. government looked like a pitiful supplicant, desperate to win the prize but armed with near-zero leverage, Naomi Monk rose in defense of her neighborhood.
Monk knew the area she called home was crime-ridden and development-starved, a scruffy, neglected backwater. But she told the D.C. Council that pumping more than $600 million into a stadium near South Capitol Street was a lose-lose proposition. A ballpark near the Anacostia River would be “an eyesore and a hazard” benefiting only millionaire ballplayers, doing nothing for low-income residents of Southeast and Southwest Washington.
“Just say no,” Monk pleaded.
Eight years later — after the council anguished over the stadium deal and finally approved it, after angry voters threw out three council members who had pushed for the deal, after the Expos became the Washington Nationals , and after Nationals Park became home to a team that fell right into the Washington Senators’ historic cellar-dwelling role — Monk has a wholly different view of baseball.
“I have to say, it’s been for the betterment of the community,” she said. “Our crime seems to be under control. The neighborhood looks 100 percent better. The new housing is a great improvement.”
As the Nationals begin their eighth season this week, the team is poised to contend for a playoff berth for the first time. From pitching star Stephen Strasburg to teen hitting prospect Bryce Harper and a player development system that some baseball observers have ranked best in the sport, the Nats finally look like a winner on the field.
It’s taken longer than expected, but if the team and the area around Nationals Park blossom this year, that would be good news for those who believed baseball’s return would pay off for Washington.
The road to this spring has been a checkered one. Some fans drifted away during an extended period in which the franchise’s owners, the Lerner family of suburban mall developers, seemed complacent about the team’s miserable performance. With attendance declining or flat every year except for the new stadium’s inaugural season in 2008, questions arose about the viability of baseball in a market that lost the Senators twice and went without the sport for 33 years.
“The attendance hasn’t done as well as we had expected,” said John Ross, director of the District’s office of economic development finance. A consulting firm the city hired projected that the Nats would draw more than 3 million fans a year once the new stadium opened. That has not happened; rather, attendance has fallen short of 2 million in the past three seasons, according to Major League Baseball data.
“Some of that had to do with wins and losses — fewer wins means fewer fans,” Ross said, “and some of it was that the Nats have been building a fan base and that takes time.”
“They lost, they lost badly and they lost boring,” said Steven Biel, a 36-year-old fan who writes a Nationals blog, FJB. (The acronym came from Biel’s “Fire Jim Bowden” campaign against the team’s former general manager.) “We don’t know yet how this market would react to a baseball team, because they haven’t played baseball until now.”
The Nationals’ chief operating officer, Andrew Feffer, wouldn’t put it that harshly, but agreed that “fielding a team worthy of fan support” is essential to boosting attendance.
“A whole generation grew up in Washington without knowing baseball here,” he said. “This is still a start-up franchise, but you’re seeing a great story unfolding. We’re at a tipping point, a seminal moment for a franchise that was ranked at the bottom but now has the No. 1 minor league system and is reaping the benefits of that investment.”
Feffer would not divulge numbers but said season ticket sales this year are the highest since Nationals Park opened four seasons ago.
Years of paralysis
During the stadium debate, the strongest argument for public investment was that bringing millions of fans a year into a previously dormant part of the District would generate retail, residential and office development, expanding the tax base.
But Nationals Park opened the same year the nation’s economy suffered its worst downturn since the Great Depression. The result was years of paralysis.
This season, fans will again walk from the Navy Yard Metro station past a four-year-old construction pit where Monument Realty has long promised a hotel, residential and retail complex.
Across Half Street SE from Monument’s hole in the ground, however, another developer, Akridge, is finally moving ahead with its mix of residential, retail and office space that Feffer said will “completely transform the fan experience.”
Beyond that symbolic block, baseball’s physical impact on Washington is suddenly clearer. When the Nats play their home opener April 12 against Cincinnati, fans will enjoy a direct view of the Anacostia River for the first time, as a waterfront concrete plant owned by Florida Rock has been razed, the first step toward a residential and retail complex. The Nationals this season plan more entertainment on the stadium’s river side, a virtual no-man’s land until now.
An alluring river walk, one of the city’s best-kept secrets, now runs from just behind the stadium to the Washington Navy Yard. A sparkling glass pavilion two blocks east of the stadium will house half a dozen restaurants, a brewery and a bakery before the end of this year, according to the developer, Forest City Washington.
“When the stadium opened, people expected everything to spring right out of the ground,” said Jack Evans, the Ward 2 council member and a longtime advocate for sports facilities as economic development tools. “But the timing was awful; Lehman Brothers collapsed just as the stadium was opening. Now, we are the envy of every city in America in the number of projects we have going up.”
In the four years since Nationals Park opened, the number of people living in the area east of Capitol Street has jumped from 1,000 to more than 3,500, with several thousand more units under construction or breaking ground this year, according to Michael Stevens, director of the Capitol Riverfront business improvement district.
A former U.S. Navy machine shop one block from the river opened in December as the Foundry Lofts, a 170-unit apartment building with views across the Potomac to Alexandria and rentals ranging from $2,175 a month for one-bedroom units to $3,600 for two-bedroom penthouses. Foundry is part of the vast Forest City project, which is expected to be built over more than a decade. Two months after opening, Foundry has rented more than 75 percent of its units, said Ramsey Meiser, Forest City’s senior vice president for development.
The ballpark area is only 30 percent built out; if current plans are realized, the population would rise to about 16,000.
A more ‘presentable’ look
On the block where nightclubs named Wet and Edge sat alongside the In & Out adult video shop seven years ago, Joan Mahoney has found a home in the 14-story Velocity condominium, which opened in 2009. She and her husband walk to ballgames on summer evenings and are relieved that an espresso place has finally opened nearby. “We still have to drive to the supermarket, but that’s okay, we love it here,” she said. (A Harris Teeter market four blocks from the stadium is expected to open late next year.)
Developers say about a third of those moving into the riverfront area come from elsewhere in the District, a third from the suburbs, and the rest from out of the D.C. area.
Despite the new construction east of the ballpark, the area across Capitol Street in Southwest remains home to low-income housing projects where many residents were worried that baseball would price or push them out of the area.
One block west of the stadium, in front of the Friendly Food Market corner store on Half Street SW, three dealers at an open-air drug market sell marijuana and crack. With four teenagers stationed along the block as lookouts, dealers exchange plastic bags for cash in swift, well-practiced handshakes.
Despite the illegal sales in broad daylight, residents along this Half Street say baseball has been surprisingly good for them. “It made it look presentable around here,” said London Smith, 42, who found work at a stadium concession stand. “I just hope it doesn’t make it more expensive.”
Smith and other residents said traffic on game days hasn’t been as bad as expected. Metro officials said 44 percent of fans attending games last season used Metrorail, down from 53 percent in the park’s first two seasons. That’s most likely a result of fans discovering that parking was more plentiful than the team had warned it might be. But Nats officials say easy parking could be a thing of the past if, as expected, attendance jumps this year.
Gloria Sligh, who has lived in the area for 31 years, said baseball has brought order to rough streets. “I see more police patrols,” she said. “We were always on their radar, but not for good reasons. Now there’s all kinds of people around here. The stadium brought down the color barrier some. We mingle more.”
Some D.C. politicians welcomed baseball’s return as a way to reconnect the city’s majority-black population with a game that has had trouble retaining black fans, but black attendance has been disproportionately low. The team “continues to reach out to all segments,” Feffer said, and will break ground this summer on a youth academy in Ward 7 that will teach boys and girls baseball skills and provide academic support.
The stadium area’s new look is startling to those who knew it as a forbidding, desolate place. Ben Silverman, now 81 and retired in Arizona, spent more than 20 years on M Street SE, where he and his brother owned Normandie Liquors, which survived by selling wine and spirits at sharply discounted prices and charging locals to cash checks.
“When I was there, you had to watch your products 24-7,” he said. “We were a liquor store in an area nobody lived in. It was a tough place. What’s there now, I never even thought of that.”
But would that transformation have taken place even if baseball had never come back? The federal government released a chunk of the Navy Yard for development years before baseball considered leaving Montreal. Then-Mayor Anthony Williams’s plan to replace a decrepit housing project with mixed-income townhouses had been around since 2001.
But developers say it wasn’t until the city committed to Nationals Park that industrial properties, seamy night spots and scattered rowhouses were cleared and infrastructure was added to make development feasible. In all, 167 buildings have been demolished in the area, mostly at city expense.
“We’re applying precision 20-20 hindsight, but it’s clear that if that stadium hadn’t been built, you wouldn’t have all this development,” said Jim Graham, the Ward 1 council member who by his own count voted 11 times against the stadium — and once for it.
Graham remains wary of committing city financing to “enormous projects that drain off dollars for everything else we might build.” But he’s been persuaded that “sports are obviously a driver for prosperity when you can get a new neighborhood out of it.”
The worries that Graham, former mayor Adrian Fenty and other opponents shared about the ballpark becoming a financial dead weight seem to have been for naught.
In the past three years, the ballpark fee, a tax levied on the city’s 1,800 largest businesses, has brought in $85 million, double what the city had projected. Sales taxes at the stadium have lagged behind estimates because of lower attendance, but the city’s overall take has been so strong that millions in excess collections have been used to balance the D.C. budget. The gusher of tax dollars will allow the District to pay off the 30-year stadium bonds as much as 12 years early, which will let the city scrap the business tax sooner than planned, Ross said.
The city also is enjoying an increased flow of property taxes — about $13 million more per year so far — as land around the ballpark has grown much more valuable.
“It took 10 or 12 years for the area around the Verizon Center to boom,” Ross said. “The area around the baseball stadium is growing even faster.”
Building ‘mind share’
Despite sluggish attendance, the Nationals have taken in about the league average in revenue, according to WR Hambrecht and Co., an investment bank that monitors sports franchises.
One factor that has kept revenue from reaching levels associated with other markets of Washington’s size is the team’s TV contract. Nationals games air on the Mid-Atlantic Sports Network, which is controlled by Baltimore Orioles owner Peter Angelos. He was guaranteed a large majority of MASN’s profits when baseball gave a franchise to Washington, which Angelos argued was part of his team’s territory.
The Nationals’ TV ratings have been consistently among the lowest in the sport (27th of 29 teams measured last year, ahead of only the two Los Angeles teams). Feffer declined to comment on talks toward a new TV contract. People familiar with the talks, speaking on the condition of anonymity, said the Nationals are seeking a dramatic increase in revenue.
Feffer said the Nats are still building “mind share,” winning viewers to a new TV network and attracting fans with new eateries, such as New York’s Shake Shack, and promotions, such as the “Take Back the Park” drive to deter Phillies fans from turning Nationals Park into their satellite home field.
The days when owners could choose not to spend big money on developing a winning team are over, said Stan Kasten, the Nationals’ president for five seasons until 2010. Under baseball’s new agreement with the players’ union, “You can’t be a last-place team forever and succeed in a big market anymore,” Kasten said, because large market teams such as Washington are no longer eligible for the revenue-sharing dollars that wealthy franchises such as the New York Yankees or Boston Red Sox pay to lower budget teams.
That means the Nationals — who play in the nation’s eighth-largest market but have been stuck in the bottom third of attendance among the 30 teams — must field a credible team to win at the box office.
Public funding of stadiums remains unpopular among taxpayers and economists. As Evans notes, he and Vincent Orange (D-Ward 5) are the only strong advocates for the stadium deal who remain on the 13-member council.
Economists often argue that public financing of stadiums is a waste because revenue goes mainly to wealthy players and even wealthier owners, rather than to average taxpayers more likely to spend their money locally.
Dennis Coates, an economist at the University of Maryland Baltimore County who wrote a report opposing the stadium deal in 2004, said sports facilities only redistribute leisure spending. “Does it make sense to spend all those tax dollars on a stadium that will just attract the entertainment dollar from Georgetown or Adams Morgan to the ballpark area?” he asked.
But, he said, if the city’s goal was to win more of suburbanites’ leisure spending, “there could be a net gain for the District. If you stole from Virginia and Maryland, good on you,” he said.
That appears to be exactly what’s happened. Nationals officials say fans coming to games are about 60 percent from Virginia, 25 percent from Maryland and 15 percent from the District. That means city residents are slightly overrepresented, Marylanders lag well behind, and Virginians make a strongly disproportionate contribution to city coffers.
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