Williams Revises Stadium Cost Plan

Linda W. Cropp is cautiously optimistic the lease will be approved. (Nikki Kahn - The Washington Post)

Mayor Anthony A. Williams delivered a comprehensive package to the D.C. Council yesterday that he says caps the price of a new baseball stadium project and includes promises from developers to pay $70 million to help cover potential cost overruns.

Williams (D) said after a 3 1/2 -hour meeting with council members that he has met their demands to limit the city's investment in the stadium. And he implored them to approve a critical stadium lease agreement with Major League Baseball at their legislative meeting Tuesday.

"The council should declare victory, say they improved the deal and move forward," Williams said. "We moved heaven and earth to get this to them today. We should vote Tuesday. The idea that this process can go on indefinitely is not okay with me."

The city and baseball officials have been deadlocked over the lease agreement for weeks. The mayor's announcement sets the stage for a critical council vote on the lease that could free the city to begin stadium construction and allow baseball to complete its selection of a new owner for the Washington Nationals.

Council Chairman Linda W. Cropp (D) was cautiously optimistic. If the hundreds of pages of documents the council received support the mayor's promises, she said, a majority of the 13 members probably would vote in favor of the lease.

However, she added that the council has hired consultants from DLA Piper Rudnick Gray Cary of Chicago to review the lease and other documents this weekend.

"An awful lot of work has gone into this," Cropp said. "I'm hopeful, but in all fairness we have to take a look at it. . . . These issues were the ones raised by the council members. To the extent they are addressed by these documents, we'll have seven votes or more."

Other council members, including key swing votes Vincent C. Gray (D-Ward 7) and Kwame R. Brown (D-At Large), said they wanted to review the documents before deciding how they would vote.

The Williams administration released a summary of the documents, along with letters from developers. It did not disclose the full construction contract, which appeared to be hundreds of pages long.

The stadium lease agreement outlines the terms by which the Nationals would rent the stadium, which would be constructed near the Navy Yard and South Capitol Street along the Anacostia River in Southeast. The city's chief financial officer, Natwar M. Gandhi, has said that until the lease is made final, he will not issue construction bonds, and baseball owners have vowed not to sell the Nationals to an ownership group.

The council was supposed to vote on the lease in late December, but Williams asked Cropp to delay the balloting until he could persuade a council majority to support the agreement. Eight council members have expressed serious concerns about the project's rising cost, which has risen from $535 million to $667 million.

After negotiating with baseball officials for a month with the help of a mediator, Williams gave the council a revised lease agreement last week that contained new contributions from baseball. The concessions included a commitment of $3.5 million for a youth academy and 2,000 additional free tickets a season for underprivileged youth.

But the council's chief concern, capping the city's project costs, was not addressed until yesterday when Williams gave the council two massive sets of documents.

One set was a "guaranteed maximum price" contract between the city and the three construction companies hired to build the ballpark -- Clark Construction Group, Hunt Construction Group and Smoot Construction. That contract requires council approval but will not be voted on at the same time as the lease agreement, officials said.

The contract would cap construction costs at $320 million and reduce the companies' fees by $100,000 a day if the stadium was not completed by March 1, 2008 -- the deadline set in the stadium agreement with baseball officials. The contract also includes a cap of an additional $68 million for "soft construction costs," including fees to architects and consultants.

The contract would transfer the control -- and the risk -- from the city to the construction companies. Although the companies would have to follow the guidelines of the stadium agreement between the city and Major League Baseball, they would be free to decide how to save money while building the ballpark.

The second set of documents delivered by Williams to the council was a plan from Anacostia Waterfront Corp. to pay for infrastructure and potential cost overruns related to buying 14 privately held acres for the stadium. The mayor established the corporation to oversee development along the waterfront.

Stephen Goldsmith, the corporation's chairman, wrote to Cropp that developers have offered to pay the District $70 million for the rights to build on land adjacent to a new stadium. The land would be within the 20-acre stadium site but not used by the ballpark structure -- two large parcels to the north near N Street SE and one parcel south of the proposed stadium between South Capitol Street and Potomac Avenue SE.

Of the $70 million, the city would receive $55 million and baseball owners would receive $15 million, Goldsmith wrote. The city's share would go toward building underground parking and repaving nearby roads. Council member Jim Graham (D-Ward 1) said the net effect is that the city would contribute an additional $55 million or more.

"If we did not pledge the development rights to this, we would have [the money] to use for other purposes," Graham said. "We're still taking out of our own pockets for baseball."

Goldsmith's letter also said the corporation is expected to take in millions more dollars from a special taxing district on new businesses in the area. Another special tax district farther from the stadium will raise money for a community benefits fund that Williams promised.

"We have an agreement that responds to the important concerns of the council," said Mark H. Tuohey, chairman of the D.C. Sports and Entertainment Commission, which is working with the construction companies. "We'll continue to meet with council members over the weekend."

Tuohey added that the construction companies have told him the price of labor and materials could rise significantly each month the city waits to begin work.

The documents released to the media did not address where the city would find money for a $20 million overhaul of the Navy Yard Metro station. Mayoral aides said the funds would be included in a federal budget to be released Monday.