Baseball Questions Stadium Cost Cap
Saturday, February 11, 2006
Major League Baseball President Robert A. DuPuy told District officials yesterday that a stadium spending cap adopted by the D.C. Council has "seriously disrupted" the previously negotiated ballpark agreement, but he pledged that baseball officials will continue talking with the city.
In a one-page letter to Mayor Anthony A. Williams (D) and Mark H. Tuohey, chairman of the D.C. Sports and Entertainment Commission, DuPuy said baseball officials are reviewing the spending cap approved early Wednesday. The cap limits city investment in the project along the Anacostia River in Southeast Washington to $611 million.
"It clearly contains conditions, restrictions and new provisions which go well beyond our previous agreements and raises a number of questions," DuPuy wrote. "We want to make sure that the kind of ballpark we agreed upon will be built."
Already, there are signs that the cap could compromise the design of the complex. The council's legislation leaves the city about $34 million short of the cost of an underground parking garage, which D.C. and baseball officials have said is crucial to creating a lucrative entertainment district.
The latest development raises questions about whether baseball officials will endorse the spending cap or seek to negotiate changes. DuPuy added in his letter that MLB wants to see analysis from the District's chief financial officer and the D.C. attorney general before making a decision on the council's cap. D.C. finance chief Natwar M. Gandhi is conducting a review.
On Wednesday, the council also approved a stadium lease agreement with MLB contingent upon it accepting the city's spending limit.
Under the council's legislation, cost overruns, except those related to acquiring land, must be paid by the Washington Nationals' owner, the federal government or other private entities.
Mayoral spokesman Vince Morris said DuPuy's letter does not represent bad news for the administration. "It shows MLB is just as keen to press ahead with the ballpark as we are," he said. "So far as we can tell, the late-night revisions made by the council do not jeopardize the deal and mostly reaffirm our existing plans."
But baseball sources said a contingent of MLB officials -- led by Chicago White Sox owner Jerry Reinsdorf, chairman of the relocation committee -- was leaning toward taking the city to binding arbitration. Under that scenario, baseball officials would seek to force the city to abide by the original stadium agreement, under which the District is responsible for all cost overruns.
DuPuy was taking a more moderate position, hoping to negotiate a final agreement with the city, said the baseball sources, who spoke on condition of anonymity because the deliberations are ongoing. DuPuy and Reinsdorf could not be reached to comment.
Williams has said that land adjacent to the stadium should be used for a mixed-use entertainment district, featuring retail businesses, restaurants, residential units and office space.
On Feb. 3, Williams offered the council a plan under which the city would sell development rights for land adjacent to the stadium. Under one provision, the money would be used to build an underground garage.