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  D.C. May Have Deal for Downtown Sports Arena

By Thomas Heath
Washington Post Staff Writer
Tuesday, June 7, 1994; Page A01

District business leaders and sports entrepreneur Abe Pollin worked out the final details yesterday of a plan to bring the basketball Bullets and hockey Capitals to a soaring, glass-fronted $150 million arena in downtown Washington.

The plan could include an increased tax on alcoholic beverages to help pay the costs of building the arena, a source said. The D.C. Council would have to approve any tax increase.

The two sides met for several hours yesterday afternoon, and city representatives left the session believing that they had struck a deal. The mayor and city officials are to be briefed on the details this week, a source said.

The District has been in a heated competition with Maryland to build a new arena for the two professional sports teams, which now play in the 20-year-old USAir Arena in Landover. Talks with Pollin's representatives had taken on urgency in recent days because of the District's desire to conclude a deal before Maryland and Virginia get proposals off the ground.

Maryland leaders said they are pressing ahead with a plan of their own. Consultants will be hired this week, and Prince George's County will be able to put a proposal on the table sometime in early August, according to lawyer John Davey, the county's point man on the arena project.

Efforts to reach Pollin by telephone yesterday were unsuccessful.

Several stadium and financial consultants from across the country have been hired by the Federal City Council, a nonprofit group dedicated to improving the city, to research the financial aspects of a deal and to participate in discussions with Pollin.

Those discussions resulted in plans that are being shown to influential leaders in the city. Current plans call for the arena to rise 130 feet above Gallery Place in Northwest Washington. It would have a curved facade on its western side, with lots of glass around the outside to make it appear less bulky.

Dorn McGrath, a member of the Committee of 100, a group of civic leaders, said renderings show the arena floor below street level, so many fans would descend into their seats, much as they do at the USAir Arena.

The proposed arena would be close to the Gallery Place Metro station, making the arena easy to reach by public transportation. On the south side, a section of G Street NW would be relocated. On the north end, the arena would have a 2,000-space underground parking garage.

City business leaders "are very anxious to do this because they see it as an opportunity to attract a big revenue generator to the center of the city," McGrath said.

McGrath, a professor of urban planning at George Washington University, said he was briefed about the proposed arena and shown drawings by two members of the Federal City Council and by local architect Colden Florance.

During talks over several weeks, disagreements arose over how to provide Pollin with enough revenue while putting a minimal burden on District taxpayers.

The two sides dickered over how to split revenue from such sources as executive boxes, other ticket sales and food and novelty concessions, according to people familiar with the negotiations.

It was in the course of those discussions that the idea arose of raising the tax on alcohol sales. The exact amount of the possible increase is unclear. The tax now is 8 percent.

The arena has been envisioned from the beginning as a public-private venture. How much revenue Pollin could draw from the arena would depend, at least in part, on the size of the public contribution to its costs.

The Federal City Council and the D.C. Chamber of Commerce have led the city's efforts to woo the Bullets and Capitals.

The groups have turned to national experts in arena financing, including the Dallas office of Coopers & Lybrand and Public Financial Management in Philadelphia, to analyze the financial aspects of the deal. The District also has consulted informally with Ellerbe Becket Inc., a Kansas City, Mo., architectural firm that specializes in sports structures.

Last week, financial consultants on both sides held a highly technical discussion in an effort to hammer out a deal.

All sides, including Maryland officials, have looked to downtown Cleveland's sports complex as a model for their respective plans. That project relies largely on public financing, with some income from skyboxes and concessions used to pay debt service. The District and Maryland are both following that model, but are hoping to keep taxpayer financing to a minimum.

District business leaders, in briefing McGrath on the arena proposal, said that "there was no expense to the city," he said. After much wrangling, both sides apparently have settled on an arena with 21,000 seats, including 150 executive suites and a special section for premium seating, sources said.

McGrath said Ken Sparks and David Parr, both of the Federal City Council, told him they were briefing several people and groups about the project.

The Gallery Place property is a city-owned urban renewal site that has been the subject of a series of redevelopment plans in the last decade. None of the plans has gotten off the ground. The current city comprehensive plan calls for housing and retail development on that site, but the D.C. Council is considering amendments to the plan today that would allow the arena to be built there instead.

Davey and Bruce Hoffman, Maryland Stadium Authority executive director, already have met with Pollin's lawyers to discuss what kind of arena the sports entrepreneur requires.

Maryland insiders said they were optimistic that Pollin is keeping his options open. "Prince George's is aggressively reviewing the feasibility of a new arena ... and as quickly as possible will be in a position to sit down and negotiate with Mr. Pollin," Davey said.

Staff writer Mark Asher contributed to this report.

© Copyright 1997 The Washington Post Company

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