By Lyndsey Layton and Thomas Heath
Washington Post Staff Writers
Saturday, July 8, 2006; B01
The owners of the Washington Nationals criticized the city's plan to tuck stadium parking into condominium towers as a "speculative development" that won't work and could cause "considerable damage" and harm to the team "for years to come."
Incoming team president Stan Kasten released a written statement yesterday discrediting the plan that the D.C. Council appears poised to approve next week. Kasten said the plan is shaky and threatens to blow the construction deadline and budget for the project, which could delay completion of the stadium and cost the team and the city "tremendous losses" in the tens of millions. He urged its rejection.
"There are neither firm developer or financing commitments, nor feasibility studies," Kasten said. "The plan does not even guarantee the city cash payment of the full value of the development rights. . . . We do not think the city should support such a speculative development."
Although the city went through protracted lease negotiations, often acrimonious, with Major League Baseball, the discord over the best approach to parking on the stadium site is the city's first clash with Theodore N. Lerner, the team's principal owner. The disagreement has simmered for weeks, and Mayor Anthony A. Williams (D) stepped in with a proposal combining below and aboveground parking.
The Lerner group is pushing to ensure that the stadium near South Capitol Street and the Washington Navy Yard is completed by April 2008. The city has committed $611 million to the project and wants to maximize development at the site. Their dispute flared into the open just as the city's parking plan cleared several key hurdles.
On Thursday, the D.C. Zoning Commission voted unanimously to allow the city to build two 13-story towers. In doing so, it rejected a proposal favored by the Nationals to build simple, aboveground parking garages of the type at shopping malls and Metro stations. Yesterday, a council committee voted 5 to 0 to declare as surplus the land where the towers would be built, clearing the way for sale of its development rights.
The next test comes Tuesday, when the council will vote on whether to sell the right to build the towers on public land adjacent to the stadium to developer Herb Miller in exchange for $61 million. Council member Jack Evans (D-Ward 2) predicted the council will approve the sale.
"It'll pass subject to the chief financial officer certifying at some point in the future that this thing is fiscally viable," Evans said. "Personally, right now, I'm willing to give Herb a shot at getting this done. It's the best solution."
Mayoral spokesman Vince Morris defended the parking plan and issued a mild rebuke to the Lerner group.
"The mayor's parking proposal is a good compromise, and it's a shame that the Lerner family does not see the value of a plan [that] blends practicality with neighborly aesthetics," Morris said. He added: "Our plan creates jobs, tax revenue for city residents, new homes and countless opportunities. And we remain confident in Herb Miller and the ability of his team to get the job done on time and on budget -- at no cost to taxpayers."
If the council rejects the Miller plan, it lacks a good alternative. The Zoning Commission has ruled that the city cannot build standard parking garages at the stadium. The city could pave the property it owns around the stadium and create surface lots that could handle 640 cars, but it would have to provide 585 spaces elsewhere in the neighborhood, which would violate the city's agreement with the Nationals that all 1,225 spaces be on ballpark land.
Still, the Nationals said the city will be gambling if it awards the project to Miller. "The proposal will not work for many reasons," Kasten said. "But most important, it has the potential to cause considerable damage. Our efforts to create a strong fan base will also be harmed for years to come."
Under a deal it signed with Major League Baseball, the city is paying for the stadium project and must provide 1,225 parking spaces by the stadium's opening. To meet the 2008 deadline, construction has to start about Labor Day.
By putting 925 of the required parking spaces inside two condominium towers on two adjacent lots on the north side of the stadium, the city is counting on Miller to complete construction by the deadline.
If the project falls behind schedule, the city and the Nationals will face steep financial penalties. The District has sold more than $535 million in bonds to finance construction of the stadium, and any delay makes it vulnerable to lawsuits from investors.
The District also could be forced to pay penalties to the Nationals. The city's chief financial officer, Natwar M. Gandhi, has estimated that the District could lose $30 million if the stadium is delayed by one season, and it risks an additional $50 million in legal damages.
Lerner, who paid $450 million to buy the Nationals from Major League Baseball, would also lose millions in revenue from the gate and from sponsors if the stadium and parking lots are not open on time. Baseball chose Lerner two months ago to be the new owner of the Nationals from among eight bidding groups, and ownership is expected to be officially transferred from MLB to Lerner this month.
The Nationals echoed the concerns of Gandhi, who told the D.C. Council this week that he could not certify the Miller plan as financially sound because the developer lacked a financing agreement from a lender, title insurance to the property and a number of other basic requirements.
Miller, who met with members of Gandhi's staff yesterday and will visit them again Monday, is scrambling to assuage all concerns about the project. "We have the money to build, and we are prepared to meet all the requirements of the city," Miller said.
One skeptic Miller has yet to win over is Lerner, who must approve Miller's design plans.