The District's chief financial officer yesterday stood by a previous decision not to certify a private financing proposal for a new baseball stadium that was favored by D.C. Council Chairman Linda W. Cropp.
Natwar M. Gandhi said in a nine-page letter to Cropp that a proposal from a group of investors represented by Fred Cooke and Richard A. Gross did not meet the city's criteria for providing funding for the $535 million stadium project.
The group had proposed to provide several hundred million dollars and build the stadium, then lease it to the city. The investors would earn a profit by writing off the ballpark's depreciation on their federal taxes.
Gandhi had said previously that the plan was risky because federal tax regulators could choose to close that loophole. He also had other concerns, including that the proposal would significantly increase the cost of the project.
The investment group made changes to its proposal, but Gandhi wrote yesterday that "nothing in the revised plan affects my previous decision not to certify."
Cropp (D) had expressed interest in the plan and had requested that Gandhi take another look after he failed to certify it the first time. She said yesterday she would now rule it out.
"It looks like it's not something we would do," she said.
That leaves the city with just one plan that could provide private financing: a $245 million payment from Deutsche Bank that Gandhi has said is the best way to help finance the stadium project. The alternative is to use a mostly public financing plan that relies on a mix of a gross receipts tax on businesses, a utilities tax on businesses and federal buildings, an annual rent payment by the Washington Nationals and a concessions tax.
In exchange for its payment, Deutsche Bank would receive the revenue stream from tax money on concessions at the ballpark. Gandhi favors the plan because the city would have to borrow less money on the bond market.
But Cropp and others have said that Deutsche Bank had asked the city to guarantee that the concessions tax revenue would reach a minimum of $18 million a year.
Yesterday, bank representatives delivered a letter to several city leaders that said the bank was not demanding such a guarantee.
Cropp said she has been in contact with Deutsche Bank and is keeping open the option of using its proposal. A final decision probably will be made in the next few weeks, she said.