Stadium Financing Plan Goes to D.C. Council

Mayor Anthony A. Williams officially sent a proposal to the D.C. Council yesterday that would provide private financing from Deutsche Bank for a new baseball stadium, setting up public hearings beginning Friday on the issue.

As instructed by council legislation, Williams (D) forwarded the version of the bank's plan that had been certified by Chief Financial Officer Natwar M. Gandhi in March.

Under that plan, the stadium project along the Anacostia waterfront in Southeast would be paid for by $313 million in publicly financed bonds and $246 million from Deutsche Bank. In return, the bank would receive the revenue stream from ballpark concessions.

Williams also sent a second version of the Deutsche Bank plan, under which the city would get a slightly lower interest rate and need fewer reserves for the project. Under these more optimistic financing assumptions, the District would need to issue $283 million in public bonds, and the city's annual debt service would be reduced from $38 million to $34 million.

John Ross, a top aide to Gandhi, said the administration presented both versions because the financing terms will depend on what the interest rate is when the city enters the bond market and other variables that are impossible to know now.

"This proposal is flexible," Ross said. "We've made guesses as to what the market will be in two months."

Gregory McCarthy, the mayor's legislative chief, said the Deutsche Bank plan was sent to the council to fulfill legislation approved in December under which the mayor was instructed to seek private financing and submit a plan that was certified by Gandhi.

But McCarthy said Williams was not necessarily recommending that the council adopt the bank's plan. The council and mayor will continue to discuss the matter and can make changes to the plan or even find another one, McCarthy said.

"We do not say to execute the plan. We may do that, but the law says merely to submit a plan," McCarthy said. "At the end of the day, we'll look at any plan."

The council narrowly approved a $535 million stadium financing package in December with the provision that the mayor find $140 million in private funding. Eight companies submitted financing proposals, but Gandhi certified only two. Of those, Gandhi recommended the Deutsche Bank plan as a way to limit the city's debt and reduce a gross receipts tax on large businesses that will be used to finance much of the construction.

The council's Committee on Finance and Revenue, chaired by Jack Evans (D-Ward 2), has scheduled public hearings for Friday and Monday. Government officials and representatives from the eight companies that submitted financing proposals will testify the first day, followed by the general public.

Williams last week sent the council private financing legislation that would give him the authority to enter into a transaction with a private lender, reduce the business tax if there is excess revenue and create a community development fund.

The Deutsche Bank plan was not sent to the council as part of the mayor's private financing legislation, McCarthy said. He said that the council will be asked only to approve the legislation submitted last week and that the mayor will enter into a private financing agreement independently once he is given the authority by the council.

But council aides said members are wary of approving private financing legislation without specifics about where the money would come from because they fear Williams could make changes that are not subject to council approval.

McCarthy said such concerns are unwarranted because the mayor's staff intends to work closely with the council to ensure the legislative body's support.

"Whatever we do will be consensual," he said.

Evans said his committee will hold a markup of the mayor's legislation June 1. Council Chairman Linda W. Cropp (D) could then schedule a vote on the bill before the council's summer recess July 15.