Baseball to Seek Arbitration Over D.C. Stadium

By David Nakamura and Thomas Heath
Washington Post Staff Writers
Wednesday, January 4, 2006

Major League Baseball plans to file a claim with the American Arbitration Association today, asking the organization to settle a standoff with the District government over the construction of a stadium along the Anacostia waterfront, baseball President Robert A. DuPuy said.

The move is baseball's response to the ongoing dispute over a stadium lease agreement for the publicly funded ballpark project and could raise the stakes by shifting the decision making away from the city to a three-member arbitration panel.

Baseball officials said they had hoped to avoid arbitration but had little choice after the District failed to endorse the lease deal by Sunday, the deadline set last year in the stadium agreement.

"The December 31 deadline for achieving a lease has passed," DuPuy said, "and in an effort to move the process forward as rapidly as possible, we intend to avail ourselves of the contractual right and obligation to have mediation in an effort to have the parties fulfill their obligations under the contract."

The stadium agreement calls for the city to build the Washington Nationals a stadium near the Navy Yard and South Capitol Street in Southeast Washington and stipulates that disagreements over any part of the stadium contract be settled first through nonbinding mediation that is not to exceed 15 days.

If the sides cannot agree during the mediation period, the agreement calls for baseball officials and the city to claim a "dispute" and proceed to binding arbitration through the American Arbitration Association.

Some city leaders expressed dismay at baseball's decision, saying it could incite stadium opponents and further jeopardize ongoing negotiations.

"I am disappointed [baseball officials] would do that at this juncture," said D.C. Council member Jack Evans (D-Ward 2), an ardent stadium supporter. "They know we are in contact with them. We're working with colleagues on the council, and this is a delicate time. Filing a claim at this time, although it may seem logical from their point of view, it is like throwing gas on the fire."

Under the stadium agreement, the arbitration process may take no more than six months, with each party paying its expenses and sharing the costs of the mediator and a panel of three independent arbitrators. Binding arbitration means that both sides would have to abide by the panel's decision.

Aides to Mayor Anthony A. Williams (D) said they believe the D.C. Attorney General's Office would defend the city's case before the arbitrators.

Williams and his advisers, along with council Chairman Linda W. Cropp (D) and other city officials, continued yesterday to develop options to persuade more council members to support the lease. Williams asked Cropp to withdraw the lease from the council's consideration Dec. 19, one day before the 13-member body was scheduled to vote on it.

Five council members have said they probably would support the lease deal, and the others have expressed serious concerns over the rising costs of the stadium project. Although the council approved a budget of $535 million last year, a recent estimate by city financial officials put the price at $667 million.

Williams's aides have said they expect to submit a revised lease agreement to the council within the next two weeks.

"We knew the deadline had come and gone but fortunately we're still having good productive talks with Major League Baseball," Vince Morris, a spokesman for Williams, said in an e-mail. "The work we're doing this month will make the ballpark plan even better, and move us closer to having a new stadium for the Nationals to play ball in."

Adrian M. Fenty (D-Ward 4), who has opposed using public funds to build a stadium, said the only way the council would support the lease would be for baseball to contribute more money.

"While no one wants to go to arbitration, the other side is this council is elected by the people of the District of Columbia who overwhelmingly think the deal that has been presented is one-sided," Fenty said. "The only thing that's going to get any real movement on the council is a significant contribution by Major League Baseball."

DuPuy, however, said in an Op-Ed piece in yesterday's Washington Post that the stadium agreement stipulates that the District pay for any cost overruns and that baseball cannot be responsible for those costs because it is not overseeing construction.

DuPuy also said in the column that baseball's experience in other cities has shown that open-air stadiums, as the one in the District would be, can be brought in on budget if the project is well-managed.

City leaders have considered several options to cover potential cost overruns without going into the general fund. One is to sell development rights on land adjacent to the ballpark to the team's new owner or developers. Another is to use a city-controlled Metro fund to help pay for a renovation of the Navy Yard Station.

Cropp and Mark H. Tuohey, chairman of the D.C. Sports and Entertainment Commission, said they expected the lease deal to be worked out and approved by the council without the need for arbitration.

"They probably believe this is what they have to do," Cropp said of baseball's decision to begin the arbitration process. "We're still trying to work through it. I'm working toward a resolution that would not include arbitration."

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