D.C. Finance Chief Approves Council's Stadium Spending Cap
Tuesday, February 14, 2006
D.C. Chief Financial Officer Natwar M. Gandhi yesterday endorsed a baseball stadium spending cap adopted by the city council last week, saying he has no objections as long as Mayor Anthony A. Williams and Major League Baseball approve the plan.
In a three-paragraph letter to Williams (D) and D.C. Council Chairman Linda W. Cropp (D), Gandhi said the council's $611 million spending limit on city funds for the project will not jeopardize his bid to get an investment-grade rating from Wall Street on the construction bonds.
Gandhi said he will issue bonds once baseball officials, who are conducting their own review of the spending cap, endorse the deal and sign a final copy of the stadium lease agreement.
"Right now, the major issue for me is MLB agreeing the District will not have to pay for [cost] overruns," Gandhi said in an interview. "I'll wait to see what they sign. Then I'll certify it."
Baseball officials, who said last week that the spending cap had "seriously disrupted" the stadium agreement, said they have had ongoing contacts with city officials in recent days regarding the lease.
"We are eager to see the [chief financial officer's] conclusions and to discuss them with him," said MLB Vice President John McHale. "We are also eager to pursue the other issues raised in our letter of last Friday," including a cap on city spending on the stadium and baseball's potential liability for cost overruns on the proposed stadium.
Under the council's legislation, all costs in excess of $611 million, aside from overruns related to buying stadium land, must be paid by the Washington Nationals' owner, the federal government or private sources. That is a sharp departure from the stadium agreement signed by Williams and baseball officials in 2004, which stipulated that the District would pay for all cost overruns on the project along the Anacostia River in Southeast Washington.
Gandhi's review was made in deliberation with bond financing consultants, who are paid to determine whether Wall Street brokers will look favorably on bond offerings. The D.C. Attorney General's Office also has endorsed the council's legislation, government officials said yesterday.
The mayor has offered his support of the council's spending cap.
"Getting the okay from Dr. Gandhi should reassure folks that this legislation is fiscally safe and sound," Vince Morris, a spokesman for Williams, said in a written statement. "His approval takes one more question mark out of the equation, and we hope it will get Major League Baseball on board."
Even if the mayor and baseball sign off on the council's stadium lease conditions, it could take Gandhi about six weeks to be able to issue bonds because his office must complete a considerable amount of paperwork, financial officials said. The city is facing a tight timetable to complete the ballpark by March 2008, as required by the stadium agreement.
Last week, in a letter to Williams, MLB President Robert A. DuPuy said baseball officials were concerned that the council's legislation "contains conditions, restrictions and new provisions which go well beyond our previous agreements and raises a number of questions. . . . We want to make sure that the kind of ballpark we agreed upon will be built."