Metro: D.C. Stadium

Comments on District's Proposal to Build New Ballpark

Washington Post staff writer Thomas Heath was online Friday, Jan. 13, at 11 a.m. ET to field your questions and comments about the District's proposal to build the Washington Nationals a new ballpark on the Anacostia River.

Recent Post Coverage:

Cropp Proposes 'Compromise' on D.C. Stadium (Post, Jan. 12)

Baseball to Seek Arbitration Over D.C. Stadium (Post, Jan. 4)

Heath, who is currently covering the sale of the Washington Nationals baseball team and the city's proposal to build the new ballpark, has covered the economics of sports for The Washington Post for the last 10 years. His coverage has included the sale of the Washington Redskins, the last labor negotiations between Major League Baseball and it's players' union and the opening of the MCI Center and FedEx Field.

A transcript follows.

____________________

Thomas Heath: Hi everyone. Glad to be here. Ready to answer questions about the Nationals, the proposed stadium and other topics associated with baseball in Washington.

_______________________

Washington, D.C.: Thomas --

I don't get the people that argue that the council should rubber-stamp the stadium because Mayor Williams agreed to it, and "a deal's a deal." Wasn't everyone involved aware that any deal that Williams made had to be approved by the council? If the council has to approve things just becuase the mayor has already promised, what's the point of council approval anyway? Wasn't it incredibly stupid of Williams to sign a deal when he hadn't made sure he had the votes on the council to ratify it?

Thomas Heath: Apparently, the council and people on the mayor's side of city hall weren't sure whether the council had to actually approve the lease. If the city administrators knew that a year ago when they signed the baseball stadium agreement with baseball, they probably would have ensured they had council approval of the lease at the same time. Of course the council shouldn't rubber stamp the mayor's proposals. But the council probably should have been more heavily involved a year ago, before the D.C. Sports COmmission and the Baseball agreed to bring the team here and build a $535 million stadium project. The council probably should have been in from the start, so that everyone was working on the same page. Readers can decide for themselves who is to blame.

_______________________

Capitol Hill, DC: Hi Thomas - thanks for taking our questions/comments. Can you explain to me why the bulk of the residents of DC do not see the benefits of a baseball stadium in near Southeast?

This situation is very analogous to Penn Quarter and the effect the MCI Center had on spurring development in that area. A baseball stadium on South Capitol will only serve as a catalyst to the development of an extremely poorly-used section of the city. It could actually bring life to the Anacostia river front and help to complete a large section of the planned, but stagnating, Anacostia Riverwalk Trail.

Sure, the MCI Center was privately funded but, as I understand it, the taxes to be collected for the stadium are new taxes and therefore, are not taking away from existing public monies. These taxes would not be implemented but for the stadium - thus, any concern regarding the diversion of funds from schools (or other underfunded public programs) to pay for a stadium is misplaced.

Further, the taxes generated by the construction and occupancy of surrounding businesses and residences, as well as the potentially significant amounts of sales taxes to be levied against those (including VA and MD residents) attending the 81+ games each summer, eating in the restaurants, drinking in the bars, and shopping at the shops, will provide new money to be used for city purposes.

I live in the city, in the ward in which the development is proposed to occur, and believe that the new stadium would be a wonderful addition to the city's waterfront. It just seems that the opposition is for opposition's sake.

Thomas Heath: Not sure whey residents don't know the pros and cons of a baseball stadium. The city and baseball probably could do a better job of promoting its economic benefits, which they are trying to rectify now with talk of a media offensive to boost the stadium in the public's eyes. As far as the stadium not taking away from schools or other public projects, I think taxes are taxes. When you go to the public for new taxes, whether it's for a stadium, schools, convention center, or to increase a municipality's revenues in general, you are using public authority to tax the citizens, businesses or whatever. You are levying a tax that wasn't there before. I don't buy the argument that "it's just a stadium tax." A tax, is a tax. If you weren't building a stadium, who is to say you wouldn't tax the citizens, businesses or property owners in some other way for something else in the future. I don't accept your premise.

_______________________

First base line of RFK: What is the latest on asking developers to pay more of the money for the stadium so that DC taxpayers will not be paying?

I know a lot of people are going to scream out about DC taxpayers footing the bill, so I want to remind them that VA and MD fans are paying for a lot of it with taxes we wouldn't bring to DC otherwise. Special business taxes are paying for much of the rest. Certainly the higher cost of the land ensures that higher property taxes will pay for even more. Steven Pearlstein's article was one I am sure many opponents didn't read, since it was in the Business section, but it laid it out better than anyone else has.

Thomas Heath: As I understand it, under one plan being discussed the developers may - and I emphasize may - pay for infrastructure costs such as roads and streets and parking, and may cover overruns on land and environment, in return for development rights around the stadium. Without analyzing tax effects in depth, I am guessing that the taxes for this stadium will in some way be distributed to the suburbs through ripple effect of the city taxes, although I think D.C. residents and businesses will pay the biggest share.

_______________________

Arlington, Va.: The article re: the Linda Cropp agreement states that the DC Council expects that baseball should select a local owner - clearly aimed at Smulyan. But the DC Council doesn't seem to really have any way to force this, other than to continue to stall on this process... but baseball isn't going to name an owner before a deal is signed, no matter what DC's councilmembers do.

Right?

washingtonpost.com: Cropp Proposes 'Compromise' on D.C. Stadium (Post, Jan. 12)

Thomas Heath: Correct. Baseball has made it clear it will not select an owner until the lease is signed. I'm not sure if Cropp's insistence on a local owner is aimed at Smulyan or not, but I believe she and the rest are sincere in wanting baseball to select an owner with strong ties to Washington so they have some comfort that a D.C. baseball team isn't going to leave again - which would be the third time a baseball team has left Washington. Baseball doesn't want an owner involved in the negotiations for the stadium at this point because the league, I think, is concerned that the city will ask concessions of the new owner and that it will delay the process even longer.

_______________________

Arlington, Va.: Has there been any feedback from MLB on Cropp's recent proposal? Thanks.

Thomas Heath: I haven't heard feedback from baseball on Cropp's proposals, except to say that the league has been much more guarded in its optimism than city administrators. I believe baseball is in touch with the city every day on Cropp's proposals and other proposals for a new stadium, but my baseball sources have told me that they aren't as close to a deal as some would think.

_______________________

CLEVELAND PARK, Washington, D.C.: Why have not the Nationals entered into a serious PR campaign to further this agenda? Is there a reason why they seem to be sitting on the bench? RFK is NOT an acceptable long term solution!

Thomas Heath: No. RFK is not an acceptable long-term solution. The Nationals are owned by Major League Baseball, and so it would be up to baseball to conduct the public relations campaign. I must say that neither baseball nor the city has done a particularly good job of promoting the team's benefits to the city and to the area. But as I said earlier, I think they are going to try to rectify that in the near future. Or at least try.

_______________________

Arlington, Va.: So, Thomas, what's going to happen and when concerning the decision on the stadium lease?

Thomas Heath: That's the $64,000 question. What is going to happen and when? Baseball has requested a mediator to help solve the lease question. The council would have to approve the lease with seven votes for things to get solved, and Cropp may or may not have those seven votes. This could get solved in two weeks if she gets the votes, or it could drag on for months or longer in mediation, arbitration and, perhaps, even in court. The good news is that, I think, a lot of this political noise accompanies big stadium projects in most cities involving most sports. So baseball is accustomed to this sort of controversy.

_______________________

Alexandria, Va.: I had taken my eleven-year-old daughter to five games at RFK last year. To my surprise she has turned into a big National's fan with her favorite player being Nick Johnson. For Christmas she asked for a received a National Jersey. This has help bring her closer to a teacher at her school also a big baseball fan and myself as another fun event to look forward to. It would be a big disappointment if baseball were again to leave Washington DC and I am sure it would not be back in our life time. It seems that the intangible benefits of baseball to this area along with future development out weight the costs.

Thomas Heath: The only way I see baseball ever leaving D.C. is if the city flatly refuses to build baseball a stadium, period. If the city doesn't live up to the Baseball Stadium Agreement it signed last year and says it wants to renegotiate and pay a much smaller portion of the stadium, baseball may continue with arbitration, hope to get some sort of financial payment for the cost of not playing in a new stadium, and bide its time until another city or location wants the team. I don't think that will happen. Washington is too good a market and baseball doesn't want to leave. And yes, even with an expensive, publicly built stadium, there are economic benefits to having the team here and revitalizing a section of the city. There are lots of pluses, especially if a stadium can do for Southeast what the MCI Center did for downtown. I really don't think baseball wants to leave at all, but they just might if they can't get the deal done. But I don't think it would be for a couple of years.

_______________________

Washington, D.C.: The council wants to make sure the city doesn't end up spending more than originally agreed. But then they float a deal in which developers pay overruns in exchange for development rights or parking revenues or whatever? How does that solve the problem -- by giving up the development rights or parking or whatever, the city is in fact paying more. (I don't necessarily mind that, but it annoys me when the deal is presented as a major new benefit to the city.)

Thomas Heath: Correct. The city can't get something without giving something in return. And asking developers to cover infrastructure and cost overruns in return for giving them development rights is a valuable concession from the city. But this is a zero-sum game. The city can't get this stadium built without financial sacrifice on one end through the taxes it can raise or the other end through the land and development rights it controls. There's only so much to go around. The money for this project has got to come from somewhere.

_______________________

Lincoln Square, DC: Thomas,

There's a line of thought that MLB doesn't really want to go to arbitration, because if it does, there's a chance that the ruling will be that they do, in fact, have a lease. But because DC has a rule requiring all contracts above $1 million to have Council approval, that there will be no way to actually force the city to actually approve the expenditures.

All that would happen is that they could start the penalty phase, which is capped at something like $19 million, but then they'd be back at square one without a council-approved lease, and have to restart negotiations.

Have you heard anyone talking along these lines, and do you think that this would have any bearing in the endgame with the Council, particularly among stadium opponents?

Thomas Heath: Those are interesting points, but I am not sure what is in baseball's mind. I do know that they find the option of going to arbitration unpalatable. But baseball believes it will win that case and receive substantial damages from the city I think. The league would much rather get the stadium built according to the stadium agreement it signed with the city, however. Arbitration is a way to exert pressure on the city to get the deal done and keep the entire stadium project from languishing in the city council or elsewhere.

_______________________

SW Washington, D.C.: Mr Heath I am confused. Everyone is saying how the Mayor and D.C. sports pushed this project without the approval of the city counsel, but wasn't this whole thing voted on and approved by the counsel last December

Thomas Heath: You are correct, but it was a different council back then. Several, I think three, of the stadium's supporters who voted for it last year are no longer on the council. And they have been replaced with opponents, or at least skeptics, of the stadium plan. The council should have had the lease signed and approved when supporters had the votes, which was a year ago. Clearly, the lease and stadium agreement should have been on the same track.

_______________________

Washington, D.C.: Tom,

Thanks for your great work on this story over the past year.

Regarding the gross receipts tax on large businesses, you make a fair point that "a tax is a tax." But it's my strong impression that most of the public opposition to the ballpark comes not from the business tax but from the assumption that ordinary D.C. taxpayers (those of us who simply live in the city) are the ones paying for the stadium. That's simply not true -- but why do you think the Mayor hasn't done more to hammer home that point?

Thomas Heath: In my humble opinion, taxes usually trickle down to the citizens one way or another. Businesses increase prices to cover the new tax, or their landlords do, or someone does. Taxes are eventually born by the citizens as a whole, I believe. That said, we could debate that point another time. Clearly, the mayor and baseball and everyone else have not done the job in promoting the economic benefits this stadium could bring. It probably should have started two years ago and included a grass-roots effort, strong business promotion, Board of Trade, real estate industry, developer involvement. I think there needed to be a much more coordinated effort than what we have seen. I know there has been some promotion, but clearly not enough if the council - which reacts to its constituents - is so hesitant.

_______________________

washingtonpost.com: Pearlstein: Baseball Stadium Still Shows Up in the 'Win' Column (Post, Jan. 6)

Pearlstein: Private Financing Of D.C. Ballpark Just a Tax Shelter (Post, Nov. 12, 2004)

_______________________

Anonymous: Nobody can really explain to me how Bud Selig could say at various points over the summer "We'll name an owner by the All-Star break/World Series/etc." Suddenly the World Series is over, and then DuPuy starts saying that they can't name an owner until a finalized stadium agreement is made, which, even last summer, everyone knew couldn't happen until last month at the earliest.

My take is that MLB leaders are basically liars, and were leading us on to build enthusiasm for the staidum and sell more tickets, hats, etc. during the season. Where's the outrage about this?

Thomas Heath: I don't agree with you that MLB executives are liars. The league clearly set some goals for the sale of the team, but missed those deadlines. This is a complicated process, with the stadium, lease, ownership etc. I am not apologizing for baseball. They probably could have run this move and the sale of the team in a speedier way. That said, dealing with governments and elected bodies is not easy, and I think baseball is frustrated with the District. There is blame enough to go around to all parties. I know baseball would like to sell this team and get its money and move on, with a new, strong owner who can run it. There is no motivation to sell more hats and make more money. The effect of the Nationals on leaguewide revenue is marginal.

_______________________

Chevy Chase, Md.: Is baseball making money right now? In other words, if the Nationals make a profit, is that shared among the owners?

Thomas Heath: Yes, the Nationals are making money. That's a big improvement over the past, when they lost tens of millions in Montreal, when they were the Expos. The Nationals are owned collectively by the league's 29 owners, and the owners I know want the team sold and want their money. The league is going to get $450 million, which comes to about $15 million apiece for the owners. They want that money rather than owning the team another year. But Bud Selig wants to select a strong owner with local connections and make sure the Nationals are on a strong financial footing and are an integral part of the community as they move forward. The league wants the right owner here.

_______________________

Vienna, Va.: Couldn't the city have been doing SOMETHING at the stadium site this entire past year?! Even without a signed lease? Doesn't the council's foot-dragging make it a virtual certainty that the stadium will never be ready when the city promised it would?

Thomas Heath: My guess is that we are at the 11th hour when it comes to this stadium opening up in 2008. If work doesn't start soon, and I mean within weeks, this stadium I predict will not open on schedule. Time is running out. As for doing work at the stadium site, who knows? Seems crazy to start major work down there without authorization and with the possibility that the council may not agree to the stadium or move it to RFK site.

_______________________

Alexandria, Va.: You said that you feel that DC residents will pay the biggest share.

Have you seen any statistics about Stadium attendance by jursidiction? Certainly the city or the Nationals have done some studies on this to see the effect of the de facto commuter tax, right?

Thomas Heath: That's a really good question. I am guessing that the Nationals keep pretty close tabs on where their fans come from. Most teams follow that information closely because it affects their marketing and advertising budget. If we haven't written a story about this yet, we probably should if we can get that information.

_______________________

Arlington, Va.: I love your and Mr. Nakamura's work on the stadium issue. Simple Question: Would any of this be occurring were it not for the mayoral elections next fall? The ammount of grandstanding by Linda Cropp makes me sick to my stomach.

Thomas Heath: I am sure the mayor race has an effect on this discussion. And it should. If someone is running for the mayor's office, this is one of the things they should be asked about. Of course the council members are positioning themselves on the stadium issue based, at least in part, on how D.C. residents will vote in the mayoral election. That's how it should be.

_______________________

Georgetown, Washington, D.C.: What plans are folks in Virginia cooking up to lure the Nationals if the District continues to botch this deal? Certainly baseball would prefer to keep the team in the area, and Virginia is preferable to Portland.

Thomas Heath: Good question. I haven't heard of any movement yet in Virginia to recruit the Nationals if D.C. stadium falls through. If they haven't started yet, they may soon, especialy if this doesn't get solved. My bet is some people in Virginia are watching this closely. Stay tuned. Gotta go soon. One more question.

_______________________

Hyattsville, Md.: If I'm not mistaken, isn't there a provision in Major League Baseball's CBA that allows the league to contract a team following this season without having to get approval from the Player's Union? If the situation continues to deteriorate here in DC, could you see the owners taking that course of action?

Thomas Heath: I haven't recently looked at the collective bargaining agreement between baseball and the players' union, but I thought baseball was prohibited from contraction until the next negotiation. After what baseball and Commissioner Selig went through several years ago when they tried to contract the Minnesota Twins, I think the league will not pursue contraction for quite awhile. They received much criticism and Selig, as I recall, was hauled before Congress to answer questions. No, if worst comes to worst, the league will move the team rather than contract it. But baseball really, really wants the Nationals to stay here, so they will avoid moving at all costs - or unless they never get a stadium. Thanks for all the good questions.

_______________________

washingtonpost.com: Thank you for joining today's discussion with Thomas Heath.

_______________________

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.