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Parking Fees Nearby Could Alleviate Stadium Funding

The Nationals are scheduled to play next season at Robert F. Kennedy Memorial Stadium, where renovations are underway, but Major League Baseball could decide not to play there next season if it is not satisfied with the agreement for a new stadium.

Over the weekend, Williams is scheduled to give television and radio interviews, including some national talk shows tomorrow morning. His aides, meanwhile, probably will be working on finalizing details of several private financing proposals that they will share with Cropp on Monday, mayoral spokesman Chris Bender said.

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Bender declined to discuss the Gates Group's proposal, but he acknowledged that city officials have discussed several proposals.

"The focus for us is to sit down with the chairman and show her that there are multiple viable ways, private plans that have real meat on their bones," Bender said.

The council's legislation requires Gandhi to solicit private financing proposals for 120 days. Any plan that Gandhi examines and certifies would then be forwarded to the council. Mayoral advisers estimate that the stadium, excluding infrastructure and land acquisition costs, would cost $279 million, meaning about $140 million in private money must be found. If the money is not found, the stadium deal would die.

More than a dozen informal offers of private financing have been made, city officials said. But so far Gandhi has been asked to formally review just one. That plan, offered by BW Realty Advisors, used a tax loophole to return money to investors, who offered to finance up to $300 million of the stadium costs. However, Gandhi did not certify the deal.

The Gates Group, in consultation with city officials, is preparing its application for Gandhi to review, said Jeff Linton, a publicist for the firm. He said Gates has experience in parking industry investments but has not tried this specific plan before.

Under the proposal, the city would create a special parking district, with curb space for an estimated 3,000 vehicles, in neighborhoods around the stadium, which is slated to be built near the Navy Yard and South Capitol Street in Southeast Washington.

Motorists would be able to use cash or credit cards to pay an automated meter. The District would operate the parking area or hire a parking company to do so. In exchange for making a $100 million upfront payment, the Gates Group would get a percentage of the revenue generated by the parking district for up to 20 years. Final details are under discussion, officials said.

But financial analysts and Williams administration officials said there is a conundrum with any so-called private funding plan: Barring an epic act of philanthropy, any private financier who puts money into a plan would expect to earn a profit. That means the city would likely have to give up future ballpark-related revenue.

Under the Gates Group's parking plan, for example, the District would essentially give up millions of dollars in parking revenue over the next 20 years or so by taking its upfront fee of $100 million.

The Gates Group would likely expect to earn a profit of at least 10 percent -- possibly much more -- on that payment, financial analysts said. The District could decide instead to borrow the $100 million at a significantly lower rate, about 5 percent in today's market, and pay it back with the parking revenue.

However, by selling the parking rights to a third party for a huge upfront fee, the city would protect itself against various risks, which would instead be shifted to the private investor. For example, more people than expected might take Metro to the games. Or stadium patrons might prefer to park in a private lot as opposed to on the street.

Staff writer Thomas Heath contributed to this report.


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