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Baseball Consents To Revised Lease Deal
The stadium, to be built near the Navy Yard and South Capitol Street along the Anacostia River in Southeast, has been held up because the council has expressed concern about rising cost estimates. The council approved a $535 million stadium budget in 2004, but recent estimates by city financial officials have put the cost at $667 million.
The city cannot issue construction bonds for the stadium until the lease is approved. The council was scheduled to vote on the lease last month, but Williams asked Council Chairman Linda W. Cropp (D) to withdraw it from consideration because he did not have enough council support.
Archer, a former mayor of Detroit, was named by the American Arbitration Association to mediate the deadlock. The letter sent to the council yesterday was in response to a letter Cropp sent to Williams last week, asking that he meet 12 provisions from the council related to capping costs and winning new concessions from baseball.
The letter addressed each of those provisions, explaining how they would be met. Cost overruns would be dealt with in several ways, including negotiating a "guaranteed maximum price" contract with the three construction companies, it stated.
Under such a contract, , the construction companies would guarantee that the price of the ballpark structure would not exceed $320 million -- which includes a $20 million payment that Major League Baseball agreed last month to make, according to construction sources who asked that their names not be used because the agreement has not been finalized. In return, the District would cede control of the project to the companies.
The construction companies would have to follow the negotiated agreement between the city and baseball, but they could make decisions about how to keep costs down, the sources said.
The Anacostia Waterfront Corp., established by Williams to oversee development of the waterfront area near the ballpark, would cover any cost overruns on acquiring the needed 14 acres by selling development rights on the stadium site, the letter stated.
The city also is negotiating with the federal government for assistance with a $20 million renovation of the Navy Yard Metro Station. The mayor's statement said only that the city had "made headway" in talks with federal officials.
"There has been an attempt to address most of the concerns that the council had," Cropp said in an interview. "We need to look at the documentation to make sure it has been addressed completely and adequately."
Council members also had asked baseball to select an ownership group for the Nationals that has strong local ties. But the letter simply said the "MLB Constitution, the ownership guidelines and the best interests of the sport will guide the selection."