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D.C.'s Offers for Stadium Land Too Low, Some Owners Say

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By David Nakamura
Washington Post Staff Writer
Friday, September 9, 2005

District officials have begun making offers to buy land for a baseball stadium complex in Southeast Washington, giving property owners 30 days to sell or face eviction.

But some owners, who have received the letters via certified mail over the past several days, said the city's offers are too low.

Joe Lukaesko, who owns an auto repair shop on Half Street, said the city offered him $1.74 million for his property, which covers about 9,500 square feet. That is far higher than the $507,000 city assessors estimated his property to be worth for tax purposes this year. During the spring, Natwar M. Gandhi, the city's chief financial officer, did detailed analyses of the properties on the stadium site and valued Lukaesko's land at $1.2 million.

But Lukaesko, who has been working at the site for more than 30 years, said he believes the property is worth more than the city's offer because the nearby area has been undergoing redevelopment, including construction of a building for the U.S. Department of Transportation.

"I figure my property is worth a lot more," Lukaesko said. "This area didn't need any stroking by the city to improve. It was already on its way."

City officials have said they need to have control of the 20-acre site by the end of the year to break ground next spring and complete the $535 million stadium complex by 2008.

The District will be negotiating with more than 30 property owners, who control about 14 acres. The city owns the rest, which is made up of streets and public alleys.

If negotiations are not settled within 30 days, the city could place the money in a trust and take the properties through eminent domain, officials said. In that case, the owners could take the case to court, which would determine the price.

Stephen M. Green, the city's director of development, is spearheading the negotiations. He noted that the city hired an independent assessor to value the properties and environmental experts to identify any contamination problems.

"We had someone professional in the industry do this for us," Green said. "We really tried to go get an independent valuation."

In some cases, the city's offers for the properties are 20 percent to 30 percent higher than Gandhi's assessments, according to sources familiar with the process. Gandhi, who conducted his study for the D.C. Council, put the cost for both land and environmental cleanup at $85 million.

Green said the more recent assessment, conducted by consultants hired by the Office of Property Management, put that cost at $103 million. But Green said the cost for land, environmental cleanup and infrastructure will still remain below the council's cap of $165 million.

Two attorneys representing property owners confirmed that their clients received letters from the city with offers that are higher than Gandhi's figures. They would not comment on them because the city had not provided supporting materials showing how its assessments were conducted.

Real estate experts say that the city's offers are expected to be well below what property owners just beyond the ballpark site are getting from private developers who are speculating that the area will be a hot spot once the stadium is completed.

Under eminent domain laws, the District is not required to make offers that take into account the financial impact of the proposed stadium.

Benny L. Kass, a lawyer who represented business owners where the District built its convention center a few years ago, said it will be nearly impossible for property owners to block the city from building the stadium.

"It's a very simple process," said Kass, who writes a column in the weekly real estate section of The Washington Post. "If the city complies with the law and condemns the property properly, the property owner has no claim against the taking. All they can claim against is the value [of the property] in court."


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