By David Nakamura and Thomas Heath
Washington Post Staff Writers
Saturday, September 16, 2006
District government officials believe a plan to build condominiums and parking garages adjacent to a new baseball stadium in Southeast Washington is in danger of collapsing and have offered to buy out the developer for nearly $1 million.
The D.C. Sports and Entertainment Commission, which is overseeing stadium construction, delivered a contract to developer Herbert S. Miller yesterday that would give him the right to build two 13-story towers just north of the ballpark on city land.
The contract includes a termination clause specifying that the commission would pay Miller $990,000 if the project fell through, said a government official who spoke on condition of anonymity because negotiations are ongoing. Miller has until Wednesday to sign the agreement, which would then require approval from Washington Nationals majority owner Theodore N. Lerner.
Lerner and his partners have strenuously opposed Miller's plan, saying they believe it would impede the plan to open the ballpark by March 2008. Under the stadium agreement, the Lerner group has the right to reject development plans on city-owned stadium land if it has reasonable concerns.
Several District government officials said it is unlikely that the owners would endorse the contract. In that case, the deal would be killed, and Miller would be paid the buyout fee, the city officials said. The $990,000 figure is just below the $1 million threshold that would require approval by the D.C. Council.
"We gave Mr. Miller the land disposition agreement today," commission board member William N. Hall said yesterday. He declined to disclose specifics. "It contains a fair and equitable termination provision. I would rather not get into more detail about it than that. We have done it expeditiously and expect an expeditious response."
Miller, who was selected by the city last year as one of four master developers for the ballpark area, said yesterday that he received the contract late in the day and had not reviewed it. He reiterated that he can finish his project on time and within budget. And he added that he has spent $5.5 million on architectural designs, engineering work and planning and legal fees, at the request of the city.
"I am not interested in doing projects where I lose money because the city did not fulfill its obligations," Miller said.
The outcome of the negotiations could go a long way in determining the look and feel of the neighborhood near South Capitol Street and the Navy Yard near the Anacostia River. Mayor Anthony A. Williams (D) has called Miller's proposed towers -- including condominiums, garages, shops and restaurants -- the cornerstone of an entertainment district that would bring significant tax revenue and offset the city's $611 million investment in the stadium.
If Miller's towers are not built, commission officials have said they would consider paving over the area to provide surface-level parking spots with the potential for future development. Another possibility would be to ask the D.C. Council for more money to build garages underground or aboveground, commission officials said.
The stadium agreement between the city and the Nationals calls for 1,225 parking spots at the ballpark site. The stadium budget includes about $21 million for parking, but officials now say that even free-standing garages would require more money.
Len Sanderson, a spokesman for the Lerner family, would not comment yesterday. D.C. Council member Adrian M. Fenty (D-Ward 4), who won the Democratic primary to replace Williams as mayor, is scheduled to be briefed on the matter next week, his aides said.
The Lerner group, which paid $450 million for the Nationals, has expressed concern that the stadium could open with the critical 965 parking spaces that would be built with the Miller project unfinished. They also said they are fearful that Miller's buildings would overwhelm the approaches to the ballpark from the Navy Yard Metro station and would be an eyesore for fans sitting in the stadium and looking north toward the U.S. Capitol, Lerner associates have said.
D.C. Chief Financial Officer Natwar M. Gandhi also has raised questions about the Miller plan, saying that the proposed deal would violate the stadium cost cap set by the D.C. Council.
Steve Goldsmith, chairman of the Anacostia Waterfront Corp., which was chartered by Williams to oversee development near the ballpark, said yesterday that putting mixed-use development on the stadium site is critical.
"There has to be development on the site categorically," he said. "It's critical to the area and the financing. That's the position of the mayor, the council and the zoning board."
Negotiations between the city and Miller have gone beyond the Sept. 5 deadline that Miller had eyed as a starting date for his project.
"We're still working very closely with Herb Miller, because the mayor believes very strongly that parking combined with development benefits the city and taxpayers," Williams spokesman Vince Morris said.