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Group Fights Losing Stadium Financing

Cropp Wants Proposal Reconsidered

By David Nakamura
Washington Post Staff Writer
Wednesday, March 23, 2005; Page B06

A group whose private financing offer for a baseball stadium was rejected by the District's chief financial officer has protested the decision, prompting D.C. Council Chairman Linda W. Cropp to request that officials reexamine the proposal.

Representatives of BW Realty Advisors contend in a letter to Natwar M. Gandhi that he misrepresented the details of their plan when he did not certify it last week. Of eight proposals submitted to the city, Gandhi certified only the ones offered by Deutsche Bank and the Cleveland-based Gates Group.

Natwar M. Gandhi, chief financial officer, called BW Realty's plan risky.

Cropp has met several times with representatives from BW Realty and has been intrigued by their proposal, under which investors would pay $500 million to build a stadium along the Anacostia waterfront. The investors would reap a return by writing off the stadium's depreciation on their taxes each year, while leasing the stadium to the city.

Cropp said she has instructed City Administrator Robert C. Bobb to examine the non-certified proposals, particularly the one from BW Realty. Bobb is conducting a two-week review of the two certified plans in order to recommend a course of action to Mayor Anthony A. Williams (D).

"We owe it to the citizens to reevaluate the plan," Cropp said.

Mary Ann Young, spokeswoman for Gandhi, said that Gandhi had received an e-mail from a representative of BW Realty saying that a letter was forthcoming, but Gandhi has not seen the letter. DSG Capital Group, whose plan was also rejected, also sent a letter of protest to Gandhi and council members, according to managing partner Brian L. Saulsberry .

The council has sought at least $140 million in private money for a baseball stadium.

To be certified by Gandhi, a plan had to reduce the city's need to issue bonds and reduce the debt service needed to pay for them. Council members said last week that they were not convinced that the Deutsche Bank and Gates Group plans would save the city money on the stadium project, estimated to cost $535 million.

Deutsche Bank has offered to give the city as much as $493 million in exchange for control of several sources of revenue related to the stadium. The Gates Group has offered as much as $175 million in exchange for revenue generated from curbside parking.

Last week, the council asked Gandhi to reexamine those two proposals to determine if either saves money when compared to the city's initial plan to pay for the stadium through a gross receipts tax on large businesses, a utility tax, a concessions tax and an annual rent payment by the Washington Nationals.

Gandhi said BW Realty's plan was risky because the Internal Revenue Service has expressed concerns about such a financial arrangement and because the city would have to back an even higher amount of bonds.

But Frederick D. Cooke Jr., an attorney for BW Realty, took exception to Gandhi's analysis in a four-page letter. "We are stunned by the numerous factual and financial inaccuracies and unfair comparisons littered in the report," he wrote.

© 2005 The Washington Post Company