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Stadium Price Tag Rises by Millions
RFK Site Cheaper But Problematic, Finance Chief Says

By David Nakamura and Thomas Heath
Washington Post Staff Writers
Tuesday, December 13, 2005

The price of a D.C. baseball stadium complex along the Anacostia River has risen to $667 million, $78 million more than the city's budget of $589 million, according to a new official study released yesterday that could mean city leaders will be forced to seek the additional funding from the federal government and private developers.

Moving the location of the ballpark to a site near Robert F. Kennedy Memorial Stadium would cost $606 million, a savings of $61 million, according to the report from Natwar M. Gandhi, the city's chief financial officer. Although the savings would be less than Council Chairman Linda W. Cropp (D) had suggested, council members concerned about the rising costs of the project could use the findings to advocate moving it from the Anacostia site.

But Gandhi, noting that issues related to the RFK site could cause significant delays if there were a push to relocate, cautioned that "one possible outcome is that [Major League Baseball] will not agree to a move to RFK and will leave the District for another location."

Meanwhile, Mayor Anthony A. Williams (D) named four developers yesterday to oversee the creation of a ballpark entertainment district near the Anacostia site. Williams maintains that the public investment in a stadium at that site would help spark massive economic development of the waterfront that would bring up to $75 million a year in new tax revenue to the city.

Monument Realty LLC of the District and the Cordish Co. of Baltimore were chosen to develop roughly 10 acres just north of the planned ballpark at South Capitol and M streets SE. Another team that includes Western Development of the District and Forest City Enterprises of Ohio was named as the lead developer for a roughly five-acre site a few blocks south, at First Street and Potomac Avenue SE.

"We're not in a cornfield in Iowa, but we're building [the ballpark] and they have come," Williams said of the developers, playing off the famous line from the movie "Field of Dreams."

Gandhi's report came as the council prepares to vote Dec. 20 on a stadium lease agreement between the city and Major League Baseball that is critical to the stadium project.

Until the lease has been approved, Gandhi has said he will not issue construction bonds and baseball Commissioner Bud Selig has said he will not sell the Washington Nationals. Williams, Gandhi and other government officials are scheduled to testify today at a council hearing, along with about 60 developers, baseball supporters and anti-stadium activists.

To help allay the council's concerns about costs, Major League Baseball agreed during the lease negotiations to contribute $20 million to the stadium construction. In return, the city would give baseball one-third of parking revenue at the stadium on non-game days.

"We have fulfilled our end of the bargain, and we expect the city to fulfill its end of the bargain," Nationals President Tony Tavares said. "Baseball negotiated a deal when Washington approached them about bringing a team here. Since then, the city has expressed some concern on some issues, and baseball has come forward and modified the deal to the benefit of the city."

Since the D.C. Council approved a $535 million budget last December, the costs of the stadium project have increased significantly. The council recently amended the financing legislation to allow Gandhi to remove $54 million in financing fees from that budget and pay for it with other money, meaning the city's total commitment would be $589 million.

Meanwhile, Williams and his aides have removed infrastructure costs, including upgrades to Metro and nearby roads, from the budget.

Gandhi's new estimate of $667 million is significantly higher than previous estimates and includes all infrastructure and bond financing costs. Gandhi found that the project could cost up to $713.2 million if the city is forced to build underground parking, which he did not include in the estimate released yesterday. His report noted that the city could build cheaper, surface-level parking if it changes zoning law.

In a written statement, Williams insisted that the city would borrow from Wall Street no more than the $535 million approved by the council last year. The bond fees would be paid with revenue earned for the city by the Nationals' first season and by interest earned on the bond money before it is spent on construction next year, Williams has said. The city would seek contributions from the federal government and private developers for the infrastructure costs, he added.

"The new review squares with what we've said all along -- the deal is a good one for District residents," Williams said in the statement. "I urge the Council to approve the stadium lease and reject irresponsible talk of returning to the starting line on baseball; we've come too far to return to the past."

Council member Adrian M. Fenty (D-Ward 4), who has opposed public funding for the stadium, said he does not believe moving to the RFK location is a good solution. "Both sites are costly and both sites require too much of a contribution from the public," Fenty said. "We need to cap the spending. . . . Eliminating public investment is my goal."

In his new report, Gandhi found that the city could save $121 million in land and infrastructure costs by building near RFK. Some of those savings, however, would be offset by complications.

Gandhi added $31 million in new contingency funds for the RFK location in case the federal government, which owns the land and leases it to the city, requires the District to conduct a two-year environmental study before building. That would delay a project that is supposed to be completed by 2008, and costs could increase, Gandhi said.

Another complication of moving to the RFK site is that the District would be unable to recover some of the money spent for the Anacostia site, including $22 million for contractors and some of the money related to invoking eminent domain proceedings to seize 14 acres of land there. The city has offered those landowners a total of $98 million and probably would be stuck with land worth about $40 million, an amount Gandhi included in his RFK location estimate.

The city is required under the Baseball Stadium Agreement negotiated with baseball last year to use its "best efforts" to build the stadium at the Anacostia waterfront in time for the 2008 season. Officials at the D.C. Sports and Entertainment Commission said that if the city decides to build near RFK, baseball could choose to go to arbitration to recover the lost revenue, which could come to $40 million per season.

"It's very unlikely you could build the stadium in time for the 2008 season if you charted a different course," commission Chairman Mark H. Tuohey said.

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