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Stadium Lease Deal Leaves Questions
Baseball Officials Await Key Details

By David Nakamura and Thomas Heath
Washington Post Staff Writers
Thursday, February 9, 2006

As District leaders hailed the long-awaited approval of a baseball stadium lease yesterday, Major League Baseball expressed concerns about the deal, and great uncertainty remained about the construction timetable.

Richard Levin, an MLB spokesman, said baseball officials had not received a copy of the emergency legislation passed by the D.C. Council shortly after midnight yesterday and sought to review the document before endorsing the deal. The council conditionally approved the lease provided that baseball officials accept a spending cap on District funds of $611 million.

"We are very concerned about what we heard during the debate, and we need to read the materials and the legislative language so we can determine whether they are consistent with the agreements between Major League Baseball and the city," Levin said in a written statement.

Less than 12 hours after the council's final vote on the lease agreement with baseball, Mayor Anthony A. Williams (D) professed confidence at his weekly news conference that construction crews will break ground in the spring. He said he hoped baseball would support the council's spending plan.

"We have to have a full discussion [with baseball officials] in which we relay the discussions" of the council, Williams said. "I hope they look at the positive. We got nine votes for the lease."

Even if baseball were to endorse the council's legislation and the lease becomes final, city officials face a tight timetable to finish the ballpark by March 2008, as required in the stadium agreement.

The council's frantic conclusion to its Tuesday legislative meeting -- when members initially voted to reject the lease, then approved it with a heavily amended spending cap -- left many administration officials and council staff members wondering yesterday what was in the final document. Council aides expect to have the text available late today.

Meanwhile, council members discussed what they believed they had accomplished. The chief achievement of the spending legislation, they said, is to limit by law the amount of public funds that can be used for the stadium project at $611 million.

A cost cap that Williams submitted to the council last week contained some loopholes, according to council consultants. Under the council's measure, any cost overruns would be paid by the Nationals' owner, federal sources or other private entities.

Natwar M. Gandhi, the city's chief financial officer, has not yet reviewed the spending cap and was concerned about its implications on the city's plan to issue construction bonds on Wall Street, his spokeswoman said. Gandhi might not be able to sell bonds for four to six weeks, as final paperwork is completed, and the delay might increase the cost of construction materials.

The city has yet to seize control of more than a dozen privately held properties needed for stadium construction. Although District attorneys had asked a Superior Court judge to allow the city to force out property owners by Tuesday, no ruling has been made, and the next hearing is set for Feb. 24.

Some city officials have begun talking about the possibility that the stadium will not be ready for the Nationals until the middle of the 2008 season, around the All-Star Game break.

It also remains unclear when Major League Baseball will select an ownership group for the Nationals, a process that has dragged on for nearly a year.

"Baseball has told us it will be done expeditiously," said Mark H. Tuohey, chairman of the D.C. Sports and Entertainment Commission. "I interpreted that to mean a matter of a few weeks."

Although council members initially rejected the stadium lease, they reversed course and voted 9 to 4 to approve the lease with a spending cap. Late Tuesday night and into Wednesday morning, council members went through the four-page document, tweaking it line by line.

Yesterday afternoon, council aides worked to write the final legislative text, trying to make sure they accurately captured the amendments approved by council members. The group was reviewing videotape of the meeting and expected to finish this afternoon, after which copies of the legislation will be distributed.

Council member Sharon Ambrose (D-Ward 6), who voted in favor of the lease and spending cap, said the council meeting was so confusing that she turned to committee clerk David Grosso and said: "I'm not sure what's in there. Hopefully, it's not a mess."

Ambrose said yesterday that she did not think the spending cap approved by the council was significantly different from the plan Williams submitted to the council last week.

Under the city's plan, the stadium project along the Anacostia River in Southeast Washington would be funded by a gross receipts tax on city businesses; a utility tax on businesses and federal buildings; a concessions tax; and an annual rent payment from the Nationals.

The council asked Williams to cap city spending as cost estimates for the project rose from $535 million to $667 million. Under Williams's plan, spending for the ballpark structure would be limited to $320 million -- including a $20 million payment from baseball. The council's cap is the same.

Williams sought to protect against the potential cost overruns of building infrastructure and acquiring stadium land by selling development rights on the stadium site. The council's legislation allows that, also.

Even with the spending cap it adopted, the council acknowledged that the city's liability on land costs remains uncertain because a judge could award property owners more money than the city has allowed for in the stadium budget.

"Let the message go forth: There is a cap on the stadium," said council member Marion Barry (D-Ward 8), who initially voted to reject the lease agreement Tuesday but endorsed it after the spending cap was added. "We have made a bad deal just a little better."

But Ambrose, who has supported the stadium deal since the mayor struck it in 2004, said the council's plan was essentially the same as the mayor's.

Asked why her colleagues insisted on the legal cap, Ambrose said, "It's an election year, and people wanted to make sure the voters did not think they were giving away the store."

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