Nationals Park Revenue Falls Short of the Mark
Friday, September 19, 2008
The Washington Nationals' new ballpark is on pace to generate about $13.5 million in sales taxes for the District government in its inaugural season, well below the $16.1 million city officials had projected when the ballpark was under construction.
Meanwhile, as the Nationals continue their final homestand of the season, the team owners still have not paid $3.5 million in rent that was due in the spring, contending that the ballpark is not "substantially complete."
The tax revenue and rent money are used by the city to help pay down debt on the stadium project near South Capitol Street and the Navy Yard in Southeast Washington. Although D.C. financial officials said they have enough money to cover the debt service -- in part because a special tax on city businesses is bringing in more money than anticipated -- the fight over the rent appears headed toward binding arbitration.
Some city leaders said the dispute with the Lerner family might not be resolved until after a second rent payment is due from the team early next year, which could begin to hamper the debt service schedule.
"The stadium for purposes of use as a ballpark obviously was complete," said D.C. Council Chairman Vincent C. Gray (D). "It's been universally well received as a venue, which is just first-class. We did what we were supposed to do, so to be in this kind of debate is frankly shocking."
In negotiations with the D.C. Sports and Entertainment Commission, which oversaw stadium construction, Lerner representatives have cited problems with the ballpark, including the quality of the sound system and the lighting on the scoreboard, according to sources familiar with the talks who spoke on condition of anonymity because of the dispute.
Nationals officials declined two requests for an interview. In a statement, the Lerner group said the team and city "have worked extremely hard every single day since opening the ballpark to fulfill the terms of the agreement. We remain firmly committed to fulfilling the promise made to all of our fans that Nationals Park will be the finest facility in all of baseball and we thank them for their patience."
Matthew Cutts, chairman of the D.C. Sports and Entertainment Commission, which oversaw stadium construction, said the agency is in the process of hiring the law firm Seyfarth Shaw to handle the case.
Business leaders expressed frustration at the lack of progress. The faster the city can pay off the bond debt with ballpark tax revenue and rent money, the faster the businesses can be relieved of the special tax, said Barbara Lang, D.C. Chamber of Commerce president.
"It was never our intent for our money to be used as a stopgap if stadium revenues were down," Lang said.
Through Wednesday, the Nationals, who have been plagued with player injuries this season, had a 58-94 record, one of the worst in the major leagues.
In 74 home games, the team has sold about 2.2 million tickets at Nationals Park, a game average of 29,261, which ranks them 19th out of 30 teams. If the Nationals continue on that pace, they will sell 2.4 million tickets this season.