Nationals Withhold Rent on Ballpark
Friday, July 11, 2008
More than midway through the baseball season, the Washington Nationals' owners have failed to pay $3.5 million in rent for the District's new ballpark, contending that the state-of-the-art stadium is still incomplete.
Besides withholding rent, the team is demanding damages of $100,000 a day, dating from March 1. The team and the city are also at odds over the timing of sales tax payments on tickets, with the Nationals paying game-by-game and the city wanting tax revenue from pre-sold ticket packages upfront.
D.C. officials said they plan to hire a special lawyer to handle what they expect to be prolonged arbitration over the ballpark, which was built with tax dollars.
"They are playing games there; the fans are paying the money to see the games; and no one I know of has asked for a refund," said D.C. Council Chairman Vincent C. Gray (D). The Nationals "ought to pay the rent for the facility they are using. The city is banking on this revenue. . . . It seems unreasonable at this stage that the team would not fulfill its obligation."
The fight is the latest in a series of disputes that has led to increasing ill will as the city and team seek to reap dividends from the investments they made to bring baseball to Washington. The District paid more than $611 million in public money to build the stadium complex along the Anacostia River, while the family of Bethesda-based developer Theodore N. Lerner spent more than $450 million to buy the franchise from Major League Baseball.
Although each side needs the other to make the stadium a success, neither appears willing to back down. The fight centers on whether the ballpark was "substantially complete" by March 1, when the city, which oversaw the construction, was contractually obligated to hand the keys to the Lerners.
District officials said the city secured a certificate of occupancy, as well as an additional letter from the architects, that declared the building fit for business before the season began. Since March 29, when the Nationals faced the Baltimore Orioles in an exhibition, the team has played 48 regular-season games at the ballpark, selling an average of 29,000 tickets a game.
Lerner's alma mater, George Washington University, played at the stadium March 22, and the city held a high school championship game there May 31. Pope Benedict XVI was there April 17, delivering Mass before more than 45,000 people without a glitch.
Through a spokeswoman, the Lerner family declined to comment.
Because they view the project as incomplete, the Lerners have refused to pay $3.5 million in rent, asked for damages and demanded that the city pay for various items that remain in dispute, including LED lights used in the scoreboard.
Construction crews turned the ballpark over to the team in phases so that there would be time to prepare the playing field and clubhouse and have time for concession workers to be trained. Construction officials said all the revenue-generating portions of the ballpark were completed well before Opening Day. Under their deal with the city, the Nationals receive all of the profits from food, drinks and other items sold.
But office space for team executives, connected to the south side of the ballpark, was not ready until three weeks after Opening Day. Before that, the team continued to use its old offices at RFK Stadium rent-free.