By David Nakamura
Washington Post Staff Writer
Sunday, January 1, 2006
District officials and Major League Baseball representatives continued discussions yesterday on ways to cover rising costs of a new ballpark project as a major deadline passed with no agreement on the critical stadium lease deal.
Baseball President Robert A. DuPuy has threatened to take the city to arbitration unless the lease was completed by midnight last night. Mayor Anthony A. Williams (D) withdrew the lease from D.C. Council consideration two weeks ago after it became clear he did not have enough support. His aides have said they will resubmit the document by mid-January at the earliest.
Top baseball executives were on vacation and could not be reached for comment on the arbitration issue, a Major League Baseball spokesman said.
Mark H. Tuohey, chairman of the D.C. Sports and Entertainment Commission and leader of the city's negotiating team, said city and baseball representatives met yesterday to explore ways to ensure that all costs above the council-approved budget of $535 million, plus $54 million in bond financing fees, are covered without having to tap the city's general fund. City financial officials recently estimated that it would cost $667 million to build the ballpark near South Capitol Street and the Navy Yard in Southeast Washington.
Asked about the possibility of arbitration, Tuohey said: "There is a group of us very hard at work as we speak. I can't get into specifics, but we're working hard and in good faith to come to a resolution and hopefully will resolve this without having to resort to other remedies."
Tuohey added that city officials, in consultation with baseball, could have a new package of options prepared by the middle of this week.
Meanwhile, D.C. Council Chairman Linda W. Cropp (D) stepped up pressure on Williams to demand more money from baseball for ballpark construction. In a two-page letter late last week, Cropp told Williams that the city should seek a greater contribution than the $20 million baseball officials promised in December.
In her letter, Cropp said the "owners of the Baseball Team, and not the District's General Fund nor other local revenues, must be responsible for any excess of the total ballpark cost over the $534.8 million borrowing cap enacted by the Council" in its financing legislation.
Last week, city officials revealed that they are pursuing several strategies to convince the council that any cost overruns will be covered without using city money.
One proposal is to sell development rights adjacent to the ballpark to the owner of the Washington Nationals in exchange for the owner covering overruns. Baseball officials have said they will not choose an owner from among eight bidders until the lease is approved.
A second proposal is to tap a special city-controlled account under the Metro system budget to help pay for a $20 million renovation to the Navy Yard Station to handle large baseball crowds.
And a third proposal is to make relatively minor changes in the lease deal with baseball to address council concerns. For example, the city is seeking more free baseball tickets for youth.
In private meetings, Tuohey also has proposed hiring a risk management company to take over part of the construction.
But some council members said the mayor should press baseball officials to allow the eight groups bidding on the Nationals to make their own offers to pick up cost overruns. Although two groups, one headed by developer Franklin L. Haney Sr. and one led by D.C. entrepreneur Jonathan Ledecky, have reportedly made such offers, Major League Baseball officials have told the bidding groups not to talk to the city about stadium costs.
"The fact that even one bidding group is willing to make such an offer is a reason to refuse MLB's insistence that the Council accept the lease as is," council member Phil Mendelson (D-At Large) wrote in a two-page letter to Williams on Thursday. "The opportunity to cap the public cost at the amount already approved by the Council is a resolution that will gain my support for the stadium."