D.C. Ballpark's Rising Price Tag Compels Cuts
Monday, November 21, 2005
The District government significantly underestimated the price of a state-of-the-art stadium for the Washington Nationals and as a result has been forced to shift $55 million set aside for infrastructure improvements to cover escalating costs.
City officials had included money to repave roads and expand a Metro station near the stadium in the $535 million budget approved by the D.C. Council last year. Those funds now will go instead toward labor and building materials and to cover the cost of land for the stadium, which also is more expensive than anticipated.
The D.C. Sports and Entertainment Commission, which is overseeing the construction, determined that the cost of the distinctive ballpark designed by its architects has risen from $244 million to $337 million. That set off a scramble by top city officials who have since reduced the cost to $300 million but still are seeking money to complete the project.
The commission will ask the federal government and private developers to pay for the public works projects that have been removed from the budget, said its chairman, Mark H. Tuohey. Improving the roads and the nearby Metro stations is considered one key to creating a lively entertainment district around the ballpark. Some city officials fear that if the agency is unsuccessful in tapping those channels, the District may be forced to cover the void with city money.
D.C. Council member David A. Catania (I-At Large), who voted against the publicly funded ballpark, said the budget changes violate the law that authorized the stadium financing.
Infrastructure costs "are plainly included," he said. "Any effort to place them outside those categories is a violation. . . . This is business as usual around here where the people in power play hide-the-facts."
The sports commission and Mayor Anthony A. Williams (D) view the significant shift of money as necessary to meet the terms of the September 2004 stadium agreement with Major League Baseball. The promise of a stadium and all the revenue sources that come with it has allowed the league, whose 29 owners bought the Nationals three years ago for $120 million, to command $450 million for the franchise.
Mayoral advisers said that although the stadium will not go above budget, the money allotted to the project is not set in various categories and can be allocated according to changing needs.
"We're generally concerned about holding to a bottom line, but simply moving various line-items is standard," said Stephen M. Green, the city's development director, who is closely involved in the stadium project. "This is a massive undertaking. We'd like to have had everything completely thought through perfectly from the start, but we didn't even have drawings last year, so that's not reality."
The financial deliberations are delaying completion of a stadium lease agreement and the sale of the Nationals. Last week, District officials asked the league for $20 million to build underground parking. But baseball officials said they negotiated a detailed agreement that includes parking and expect the city to abide by it -- even if costs are rising.
The Nationals are scheduled to play their next two seasons at Robert F. Kennedy Memorial Stadium. When the new stadium is complete, the team is expected to pay an average of $6 million per year in rent.
"Baseball cut a deal in good faith when they came on board here," Nationals President Tony Tavares said. "They entered into very detailed negotiations that were comprehensively written and that were expanded into a full lease on RFK and a new building with all the accoutrements that come with it. Bottom line: Baseball has stayed the course and done everything it said it was going to do. The [stadium agreement] clearly stated that cost overruns were clearly the responsibility of the city."