Bidder Would Pay Overruns

Franklin L. Haney is the only one among the bidders for the team to also target development rights outside the 21-acre stadium site.
Franklin L. Haney is the only one among the bidders for the team to also target development rights outside the 21-acre stadium site. (By Jill Karnicki -- The Washington Post)
By Thomas Heath and David Nakamura
Washington Post Staff Writers
Thursday, October 27, 2005

Franklin L. Haney, a developer bidding to buy the Washington Nationals, pledged yesterday to pay potential cost overruns of up to $200 million for a new baseball stadium if he is awarded the team and the chance to buy land near the ballpark for private development.

The offer comes as Haney seeks to gain ground on the three front-runners for the team as the sale process by Major League Baseball enters the final stretch. Highly placed baseball sources have said the league could name a new owner within three weeks and have named two Washington-based groups, along with Indianapolis media mogul Jeffrey Smulyan, as the favorites.

Haney said he has been told by city officials that the costs of the publicly funded $535 million stadium project could soar because of several factors, including land values, the rising price of materials and construction delays.

"All costs over or above the originally budgeted $535 million would be our responsibility," Haney wrote in a letter to Mayor Anthony A. Williams (D).

In an interview yesterday, Haney said that if the city sticks to its budget, the Nationals will end up with an inferior stadium, and fans will end up with a poor experience. "I was told that by city officials," he said. Haney declined to say which city officials he had spoken with.

City leaders reacted cautiously to Haney's plan, saying that they were unfamiliar with it and that they did not think there would be any cost overruns in the stadium project.

D.C. Council Chairman Linda W. Cropp (D) said she was told at a briefing yesterday that the stadium remains on budget, although some changes might be made. "I always encourage people to make proposals if they save District taxpayers dollars," she said.

Tony Robinson, spokesman for D.C. Sports Commission Chief Executive Allen Y. Lew, said officials have decided to reduce stadium costs by taking out items such as on-site retail shops, grand plazas and underground parking. He characterized them as "non-core" items.

Vince Morris, spokesman for Williams, said the mayor is not concerned. "We talked in detail about the stadium just the other day, and the conclusion is that we'll have a real nice stadium," Morris said. "There was some talk about how everything would be allocated but that we'll keep it to $535 million."

Haney met with baseball Commissioner Bud Selig yesterday morning in Milwaukee, part of a series of interviews Selig is conducting with several potential ownership groups. Haney's bid to impress the mayor and D.C. Council, which has expressed concern over the public investment in the stadium, comes as several ownership groups have increased their lobbying.

Smulyan has added several D.C.-based partners, and another group headed by D.C. entrepreneur Jonathan Ledecky pledged over the summer to contribute $100,000 to improve youth recreation facilities. Haney, who splits time between residences in Tennessee and Washington, contributed $600,000 last month to the Nationals' charity foundation.

Haney is the only one among the bidders for the team to also make a play for the development rights outside the 21-acre stadium site. He and eight other developers have submitted proposals to the city to become the "master developer" of a ballpark district, which would feature retail and entertainment.

In his letter to Williams, Haney linked owning the team with developing parking and other business opportunities on the stadium site and beyond it.

"In return for financing any cost overruns, we would ask to be named the stadium co-developer," he wrote. "We would hope to be awarded the development rights to be awarded in the Ballpark District."

Council members and activists who oppose public funding of the stadium have said that selling the development rights to finance stadium construction is just another way to funnel public resources -- in this case, land -- to the project. Such a method does not relieve the city of its contribution, they said.

Haney said his plan would relieve the mayor and council of having to face a tough political problem down the road if costs go over budget and taxpayers balk at sinking more city resources into the project.


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