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  Md. Running Fast Break on D.C. Arena

By Thomas Heath and Mark Asher
Washington Post Staff Writers
Wednesday, June 8, 1994; Page A01

Maryland officials, betting the District cannot close a deal with sports entrepreneur Abe Pollin, accelerated their plans yesterday to build a new arena for the hockey Capitals and basketball Bullets next to the teams' current home in Landover.

District officials expect to sign a "memorandum of understanding" with Pollin this week to build a downtown arena at Gallery Place by the fall of 1997.

The city would pledge an initial contribution of at least $18 million during the next two years toward the estimated $150 million to $180 million cost of building the arena, according to D.C. Council member Bill Lightfoot (I-At Large).

About half of that $18 million is expected to come from a proposed increase in city taxes on alcoholic beverages. The details of the tax increase have not yet been worked out, Lightfoot said yesterday.

It is not clear where the cash-strapped city government would find the rest of the money.

After meeting with Pollin for an hour yesterday at USAir Arena, Prince George's County Executive Parris N. Glendening said that Pollin is keeping his options open despite a "constructive offer" from District officials.

"A memo of understanding is just that: that they will try to work everything out," Glendening said. "It's not a signed contract... . If they have that, fine. We will still compete... . We will be aggressive either way."

Some Maryland insiders now are saying that Pollin's first choice for an arena may be the District because of the trend toward building stadiums in downtown locations.

But they question the District's ability to bring the project to completion, citing the failure of negotiations to build a new stadium for the Washington Redskins in the city even though a memorandum of understanding had been signed with owner Jack Kent Cooke.

Pollin spokesman Jerry Sachs said yesterday that Pollin had received a "very constructive offer" from the District but that he and city business leaders had "not finalized any arrangement or any agreement."

Even with an informal agreement, various details and political pitfalls could derail the proposal. But District officials appeared optimistic yesterday that they could bring the deal home.

Private business leaders from the Federal City Council and the D.C. Chamber of Commerce plan to meet Friday with Pollin, Mayor Sharon Pratt Kelly and members of the D.C. Council to brief them and sign an agreement to go forward with the arena.

Lightfoot said a sports authority created yesterday by the D.C. Council will raise about $93 million by issuing revenue bonds.

The authority will operate as an independent entity, with the power to issue revenue bonds without council approval.

It also has the power to collect and spend District revenue dedicated to it, such as the revenue from the proposed alcohol tax.

"What we've given the sports authority is great economic independence to compete in the marketplace without government interference," Lightfoot said.

Several details in the financing package for the new arena still are unclear.

"The debt service is in flux," Lightfoot said. "A substantial portion will be covered by operating revenues," such as ticket costs, concessions, novelties and, most of all, executive suite rentals.

If a memorandum of understanding is signed, the District government will have 30 days to review the proposal, conduct public hearings and vote up or down by the time the council goes on its summer recess July 15.

The arena is envisioned as a 21,000-seat facililty that would rise 130 feet above the Gallery Place Metro station.

It would include 150 skyboxes, several thousand "premium seats," and broad glass exteriors that would minimize its bulk, according to city leaders who have seen renderings of the facility.

Kenneth R. Sparks, executive vice president of the Federal City Council; David Perry, the group's deputy director; and Kwasi Holman of the D.C. Chamber of Commerce have been briefing civic and business leaders about the proposal.

The Maryland Stadium Authority and Prince George's lawyer John P. Davey hope to begin giving Pollin information about their arena proposal within the next few weeks.

"We will ask the consultants to accelerate their reports," Davey said, "so that sooner, rather than later, we will be in a position to begin negotiations with Mr. Pollin."

Staff writer Yolanda Woodlee contributed to this report.

© Copyright 1997 The Washington Post Company

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