With Rent Unpaid, D.C. May Raise Ballpark Sales Tax
Thursday, July 17, 2008; Page B01
The fight between District officials and the Washington Nationals is getting nastier. And it might end up driving up costs of tickets, hot dogs and souvenirs.
Fed up with the Nationals' failure to pay $3.5 million in rent, eight D.C. Council members proposed legislation this week to capture more revenue another way: increasing the sales tax by 5 percent for most items sold at the new ballpark in Southeast Washington.
The city charges a 10 percent sales tax. Council members said the money raised from the tax increase would help make up for tax revenue lost because of lower-than-projected ballpark attendance.
And they said it would bring money into the city's coffers while the Nationals continue to hold off on paying rent on the ballpark. The team contends that the ballpark, up and running since March, is not complete.
Besides withholding rent, the team is demanding $100,000 a day in damages dating to March 1, a move that is galling to some D.C. officials, who are quick to point out that the District put up more than $611 million in public money to build the stadium complex along the Anacostia River.
"I have yet to hear them articulate how they intend to rebate a portion of ticket prices for a 'substantially incomplete' experience," said council member David A. Catania (I-At Large), who is pushing the tax increase for Nats tickets and items. "If they won't pay their rent, it means other businesses will have to pay."
The council is about to go on recess until mid-September, so any tax increase probably would not take effect until next season. The Washington Examiner reported the plan yesterday.
Nationals officials, who have maintained that they are following the letter of their contract with the city, declined to comment yesterday.
In addition to Catania, the sales tax measure is sponsored by council Chairman Vincent C. Gray (D) and members Marion Barry (D-Ward 8), Kwame R. Brown (D-At Large,), Muriel Bowser (D-Ward 4), Mary M. Cheh (D-Ward 3), Jim Graham (D-Ward 1) and Phil Mendelson (D-At Large). One member not on the list: Jack Evans (D-Ward 2), a ballpark supporter who chairs the committee that could get the first look at the legislation.
The team's failure to pay rent, in conjunction with diminished revenue, threatens the solvency of a special fund set up by the city to pay off the stadium bonds, according to Catania, who opposed the ballpark project from the start.
Natwar M. Gandhi, the city's chief financial officer, said that Catania's numbers are faulty and that the fund is able to pay its debts, even if the Nationals do not pay the rent. The debt service for this year is $32 million.
"There is no revenue gap," said David Umansky, a spokesman for Gandhi. "There are ample funds to service the debt."
The uproar is part of a continuing saga in which council members have said the team is not being a good partner. Mayor Adrian M. Fenty (D) said last week that he expected the disputes to be resolved. The Nationals issued a statement that played down the dispute.