As Major League Baseball steps up negotiations with Northern Virginia over relocating the Montreal Expos, a key question has yet to be answered: whether the Virginia General Assembly will back the bonds needed to pay for a $360 million stadium near Dulles International Airport.
Powerful legislators across the state's political spectrum have voiced conflicting views just as major league officials say they are nearing the end of a protracted -- and highly secretive -- selection process. That lengthy procedure has pitted Virginia against the District and other cities in a hectic competition to be home to the financially ailing Expos.
The District also would require legislation to build a publicly funded stadium, but Virginia's bid has recently been complicated by timing. Major league officials, who say they want to decide the fate of the Expos by November, are seeking immediate assurances from Virginia that the state would endorse the ballpark financing plan. But the General Assembly does not convene until January.
That has left supporters and opponents of Virginia's tangled, public-private ballpark financing plan scurrying to make their cases to Major League Baseball without the benefit of a vote. The Virginia Baseball Stadium Authority, which was created by the legislature to finance and build a ballpark, has yet to provide legislators with an explanation of how the financing plan would affect the state budget, which lawmakers just finished piecing together after an extended fight.
"We anticipate it will have a positive impact, but the impact has not been calculated," said stadium authority spokesman Brian Hannigan, adding that legislators will be briefed well before they vote. "We intend to provide them with every bit of information needed to make an educated decision," he said.
Some lawmakers said they would need time to consider the financing question, given the high stakes.
"It's something we should enter in very carefully," said Sen. Emmett W. Hanger Jr. (R-Augusta), a member of the Finance Committee. "Sure, I'd love the state to have a baseball team. . . . I'd like us to have basketball and football teams, too. But we need to be careful on how this is going to impact our credit rating."
At issue is whether the state should put its "moral authority" behind bonds used to fund construction of a stadium.
The state usually sells general obligation bonds, which are approved by voters to pay for such things as public buildings, roads and parks. The debt service on those bonds are paid from state revenue and carry a top AAA credit rating.
So-called moral authority bonds are a second-tier type of financing that benefit from the state's good credit but are somewhat riskier than the traditional general obligation bonds. Under such bonds, the state would pledge to consider making debt service payments in case of default. Using that pledge would make borrowing cheaper, saving the stadium project millions of dollars.
That risk to the state in putting its imprimatur on such a bond is stopping some legislators.
Unlike many issues in Richmond, debate on the stadium generally has not been driven by partisan or regional differences.
Senate Finance Committee Chairman John H. Chichester (R-Stafford) has joined House Speaker William J. Howell (R-Stafford) in arguing that the state should not put its credibility on the line for such a purpose. They fear it could make it more difficult to borrow for other public projects.
Other influential lawmakers, such as House Appropriations Committee Chairman Vincent F. Callahan Jr. (R-Fairfax) and Del. L. Scott Lingamfelter (R-Prince William), a member of the Finance Committee, have argued that the stadium financing arrangements are a good investment. The stadium plan, backers say, is based on conservative assumptions and does not leave the state vulnerable.
Sen. Mary Margaret Whipple (D-Arlington), a longtime supporter of the stadium authority's quest for a team, said putting the state's weight behind the stadium bonds is no different than backing other private investments intended to create jobs and stimulate local economies. Moreover, she added, the authority is doing what it was created to do.
"The General Assembly has already determined that [luring a baseball team] is a legitimate purpose," Whipple said. "We're the ones who said, 'Go out and get us a team.' "
In interviews, Hanger and other members of the Senate Finance Committee echoed their chairman's skepticism about such a bond plan. The committee would vote first on the plan.
How the bond plan could affect the state's finances depends on a host of unknown factors, state finance officials said. But the primary question is theoretical: How likely is a shortfall in repaying the bonds?
Authority officials said the chance of a shortfall is remote. Their plan, they said, would pay off the bonds even under a "meltdown scenario" in which game attendance falls precipitously.
"Our plan works if the attendance goes down to the lowest attendance in Major League Baseball," said Gabe Paul Jr., the authority's executive director. "At the end of the day, our plan works if we go down to 1 million attendance a year. That's not a bad year. That's every year."
The plan calls for two-thirds of the stadium cost to be funded with taxes on stadium-related business, such as concessions, players' salaries and also revenue from developers working with the authority. Team owners would pay the other third in rent. Hannigan said a recent decision to sharply reduce the size of a development around the ballpark would have no impact on the stadium financing.
Authority officials and their advisers also said that even if there were a default, Virginia would not be required to repay the bonds because the state is not guaranteeing them as it would traditional general obligation bonds.
Hannigan, citing the authority's legal advisers, said the moral obligation pledge, while "not legally enforceable," is a powerful stamp of approval because it goes to the state's credibility.
"If the bonds are never called on, there really is no impact" on state finances, said Pam Currey, Virginia's deputy finance director. She said she could not estimate the potential costs to the state in the case of a default, largely because it would depend on the size of the debt. "There are a lot of different variables," she added.
Detractors said the state should direct its resources toward more important public pursuits.
"This is corporate socialism at its worst," said Del. Robert G. Marshall (R-Prince William), adding that the state should not put public money into a stadium for private business that will help "some millionaires to get richer. Forget that spitball!"
But proponents said putting the Expos in a Northern Virginia stadium would provide an economic engine.
"It really has long-term benefits for the commonwealth as a whole," said Sen. Benjamin J. Lambert III (D-Richmond), a member of the Finance Committee. "It stimulates tourism and would bring some excitement to Virginia."
Added Callahan, "It would be a feather in the governor's cap if, on his watch, Virginia gets a baseball stadium."
Baseball backers are counting on those promises of economic benefits and a survey showing support among many Virginians to persuade lawmakers to follow through with the financing.
Paul Shiffman, a lawyer who is part of the Virginia Baseball Club, an investment group seeking to buy the team, said, "In the end, the question is going to be, 'Do these politicians want an epitaph written that they are the reason baseball doesn't come to Virginia?' "