Private Stadium Funding Canceled

Gandhi had said that the deal was preferable to traditional public bond financing because the city would be able to borrow less money in general obligation bonds on Wall Street. Furthermore, the city would have been able to collect $6 million less in gross receipts taxes from city businesses, Gandhi had said.

However, Wall Street bond raters said they would give the stadium deal an investment-grade rating only if the city collected the full $14 million in business taxes.

Because of that, Gandhi said, the deal became less desirable.

"The sense here is that if they were not giving you any advantage, then why would you pay a $5 million structuring fee to them?" Gandhi said. "This did not happen yesterday or last week, but over the last several months. We have been talking about a variety of financing arrangements that could most benefit the city."

The city received eight offers last spring, but Gandhi certified only two -- the Deutsche Bank plan and another from a group that proposed buying the rights to control curbside parking near the stadium. In the end, Gandhi recommended the bank's plan, and Cropp endorsed it last summer.

Cropp's critics, including those running against her in this fall's mayoral race, were quick to criticize her for pushing for a private financing plan that many had called untenable.

"The whole bank plan was to appease Linda," said council member Vincent B. Orange Sr. (D-Ward 5). "They finally told us it was going to cost too much."

Vincent Morris, a spokesman for Williams, said: "The mayor has said all along he'd look at private financing if the council felt it would save money. But if at the end of the day the District doesn't save money, then we won't pursue this option."

Jack Evans (D-Ward 2), one of the council's most ardent stadium supporters, said yesterday that he had been ambivalent from the beginning about whether to use the Deutsche Bank plan. Evans added that he was unaware whether the bank had a signed agreement with the city to be paid $5 million.

"They do a lot of business here. They would not want to sue the city," Evans said. "Nobody wants to do that. Whether they are entitled to anything, I don't know."