D.C. officials have told business leaders for the first time that they might be asked to contribute up to $20 million a year in new taxes to fund construction of a major league baseball stadium, but business leaders say they need more details before they endorse the proposal.
Mark Tuohey, chairman of the D.C. Sports and Entertainment Commission, met June 2 with the city's largest business groups to sketch the broad outlines of Mayor Anthony A. Williams's plan to pay for a ballpark entirely with public funds. The financing plan is a critical component of the mayor's bid to persuade baseball officials to relocate the financially struggling Montreal Expos to the nation's capital.
During the meeting, Tuohey told representatives of the D.C. Chamber of Commerce, the Greater Washington Board of Trade and the Federal City Council that the financing package is likely to include $18 million to $20 million a year in new taxes on business -- more than double the $9 million the groups endorsed last year under an earlier stadium proposal.
Tuohey also told them that the city has yet to decide whether to impose a tax on gross receipts, as Williams sought last year, or whether to tax personal business property, dramatically altering the type of businesses that would be hit hardest.
Tuohey said the city also might seek a combination of the two taxes, and he told business leaders that the city has yet to determine which businesses would be affected or at what rate they would be taxed.
Afterward, Chamber President Barbara Lang said Tuohey asked the groups for their support. Though all three said they remain enthusiastic about luring baseball back to the District, none was ready to commit to the mayor's plan without more details, she said.
Lang said she is especially concerned about the possibility of a business property tax, which could hit businesses that own significant tangible property much harder than the tax on gross receipts contemplated last year. For instance, Lang said, PEPCO would have paid $12,000 in additional taxes under last year's proposal. With a property tax, she fears that the company's annual levy could jump to $100,000.
"We told them if they wanted us to sell this, we needed a lot more information. And even then, we weren't quite sure we could sell it," Lang said. "We found some of this troubling. . . . We wanted to be supportive, but we could not do it, at least the way we see it right now."
Board of Trade President Bob Peck and Federal City Council Chairman Terry Golden said they are hopeful that the city and the business community can reach an agreement on a financing package.
"I think you can safely say that the Federal City Council and the business community that we represent is very supportive of having baseball come to Washington, D.C., and supportive of the mayor's and city council's efforts in that regard," Golden said. "We recognize that we're going to be asked to support that financially, and we're prepared to do that."
But Peck said he won't broach the subject with his members until the mayor and D.C. Council lay something more concrete on the table.
"We continue to support strongly bringing baseball somewhere to the region," Peck said. His organization has members in Northern Virginia, which has launched a separate bid for the Expos. "I've not taken the time or spent the energy to ask our members about what we hear might be a personal property tax."
Ambivalence in the business community about the mayor's financing plan raises doubts about his ability to deliver on promises to baseball officials, who plan to decide this year on a permanent home for the Expos. The team has been floundering financially in Montreal. In addition to the District and Northern Virginia, the league is considering Las Vegas, Portland, Ore., Norfolk and Monterrey, Mexico.
A baseball official did not respond to a request for comment yesterday. The league prefers that the Expos go to a city with a publicly built stadium.
Tuohey, the sports commission chairman, said he is "confident that we can deal with" the concerns of business leaders. He said reaction to the financing plan was positive.
"We assured the representatives that we will make sure this is fair and equitable," Tuohey said. "I felt very good about the reaction."
Mayoral spokesman Tony Bullock said that Williams (D), too, is confident that he can win the backing of the business community.
"Obviously, we need the support of the business community for this to work," Bullock said. "They want baseball here. They recognize the economic benefit to businesses across the District. We just have to find the right balance, and we will."
Staff writer Thomas Heath contributed to this report.