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Cropp Offers Alternate Funding Plan

Proposal Would Reduce Business Assessments

By David Nakamura
Washington Post Staff Writer
Tuesday, November 30, 2004; Page B01

D.C. Council Chairman Linda W. Cropp made an eleventh-hour proposal last evening that would significantly alter a plan to build a baseball stadium by reducing the amount businesses would pay, while erasing a specific commitment for $45 million to go to public libraries.

Cropp's proposal, made in a letter to her 12 colleagues, came in anticipation of today's council vote on Mayor Anthony A. Williams's stadium financing legislation. It was the latest in a series of moves she has made to try to limit the public costs of the stadium project.

Outside the Wilson Building, Ed Lazere, left, an activist who opposes the stadium plan, speaks while council members Adrian M. Fenty, David A. Catania and John Capozzi, another opponent, listen. (Juana Arias -- The Washington Post)

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Under the mayor's initial agreement with Major League Baseball, a stadium near the Navy Yard and South Capitol Street in Southeast Washington would be funded largely by a gross receipts tax on large businesses.

To gain council support, Williams (D) added a community investment package that included $45 million for libraries and $30 million for projects in Wards 5, 6, 7 and 8. It also had a provision to raise up to $450 million in bonds for other neighborhood needs.

To guarantee the money for libraries, Williams proposed increasing the amount collected in gross receipts taxes from $24 million to $26 million. The extra $2 million would be used to pay debt service on the $45 million in bonds for libraries. Business leaders balked, however, saying that all tax money should be used solely to pay for stadium construction.

"If we want to fund libraries, then let's fund it. But not through the baseball fee," Cropp said in an interview.

In her letter, Cropp also proposed eliminating the $30 million for other projects because that money would come out of the city's general fund. Cropp will formally introduce these amendments today.

Cropp is concerned about the potential rising costs of a stadium. Mayoral advisers said the project would cost $440 million, but the D.C. auditor put the bill at $484 million and the city's chief financial officer estimated the price could reach $530 million.

This month, Cropp blocked the council's first scheduled vote on the mayor's plan and proposed building the stadium adjacent to Robert F. Kennedy Memorial Stadium. When that failed to win widespread support, she agreed to the mayor's proposed site but said she wanted to explore private financing options. Last week, she said she would introduce legislation that would require the city's chief financial officer to reevaluate the costs and force the mayor to build at RFK if the price was too high.

It is uncertain how Cropp's latest amendments will affect today's vote. A spokesman for Williams declined to comment on Cropp's latest proposal last evening. Before Cropp's letter was distributed yesterday, Williams expressed confidence that the stadium legislation would prevail in the council.

Seven council members had supported the mayor's proposal earlier this month, including Jim Graham (D-Ward 1), who signed on only after Williams promised the money for libraries. Graham said yesterday he would not support Cropp's version of the legislation.

"What I was hearing is that people say there are higher priorities than building a stadium," he said.

Council members Sandy Allen (D-Ward 8) and Vincent B. Orange Sr. (D-Ward 5) also had been promised funding for community projects in their wards. Orange has solidly backed baseball, but Allen has said she wants to be sure her community benefits from the stadium.

But Cropp's move could persuade council member Phil Mendelson (D-At Large) to vote in favor of the stadium. A spokesman for Mendelson said yesterday that he would likely support a plan that lowers the business tax.

Cropp emphasized that she plans to introduce legislation in January that would help libraries and other needs. She said she also hopes that a new stadium would produce the $450 million in bonds that the mayor's staff has promised.

That money would come from a concept known as tax-increment financing, in which a district would be drawn around the stadium and tax money from businesses there would be dedicated to specific community funds.

Economists and civic activists have cast doubt on such a concept, saying stadiums do not generally generate a surge in business development. That's why Graham and other council members had pressed Williams to find a more solid revenue source and Williams responded by proposing to raise the gross receipts tax and use $30 million already in city coffers.

Cropp said she will continue negotiating until the council takes its final vote, which could come Dec. 14 or 21.

Staff writers Theola S. Labbe and Lori Montgomery contributed to this report.

© 2004 The Washington Post Company