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Cost Estimate on Stadium Jumps

D.C. Analysis Says Price of Deal Could Rise $91 Million

By David Nakamura and Lori Montgomery
Washington Post Staff Writers
Thursday, October 28, 2004; Page A01

The cost of building a baseball stadium and renovating Robert F. Kennedy Memorial Stadium could be $91 million more than city officials initially estimated, according to an analysis released last night by the District's chief financial officer.

In an eight-page letter to D.C. Council Chairman Linda W. Cropp (D), Natwar M. Gandhi said the total cost of the stadium package could reach $486.2 million, not the $395 million stated in the agreement between the District and Major League Baseball.

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The additional costs are in three areas: $50 million for improvements to roads, sewers and Metro; $11 million more than estimated to renovate RFK; and $30 million more than estimated for contingency funds for likely cost overruns.

"As a result of the increase in project costs, more money will have to be borrowed and debt service will increase," Gandhi wrote.

Gandhi's figure does not include an additional $40 million in financing costs, which would put his estimate for the total package at about $530 million. City officials have estimated the total at $440 million.

Under a pact with Major League Baseball, which intends to move the Expos from Montreal to Washington in the spring, Mayor Anthony A. Williams (D) has agreed to build the stadium through a gross-receipts tax on large businesses, a tax on stadium concessions and an annual rent payment by the team.

Gandhi estimated that the city would need to collect $2 million a year more in gross-receipts taxes on the city's largest businesses to pay the debt service.

"This just looks like a continuous spiraling upward with no end in sight," said council member Adrian M. Fenty (D-Ward 4), who opposes using public money for the stadium. "It would be fiscally irresponsible for the council to approve the plan."

But city officials disputed much of Gandhi's analysis. For example, they said that renovations to Metro are not necessary and, even if they were, could be paid for partly by Virginia and Maryland, whose residents would be attending games.

Furthermore, the officials said, they had built into their financing plan the ability to issue up to $500 million in bonds without changes to the gross-receipts tax.

"What [Gandhi] says doesn't really bother me," said Stephen M. Green, a special adviser to the mayor on economic and baseball issues. "It doesn't really change our financing. We can do this. . . . Every time I've dealt with him, he makes a fiscal impact statement like the end of the world is coming. It's what he does. . . . My job is to be middle-of-the-road."

Gandhi's conclusions set the stage for what probably will be a long and contentious public hearing on the stadium financing legislation before the D.C. Council at 10 a.m. today at the Wilson Building. Two hundred eight panels and individual speakers have signed up to testify, one of the largest lists in council history.

Two council committees will mark up the baseball legislation Wednesday, and the full 13-member council could take a first vote Nov. 9.

In an attempt to appease residents and groups opposed to using public funds, Williams announced yesterday morning that he would seek to create a community investment fund worth as much as $400 million to build and renovate schools, public libraries, parks and athletic facilities by harnessing the economic energy generated by a new baseball stadium on the Anacostia waterfront.

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