D.C. Mayor Anthony A. Williams personally entered the negotiations with Major League Baseball officials over terms of a new stadium lease yesterday, reiterating the city's request for a $24 million letter of credit to help finance the ballpark for the Washington Nationals.
Williams (D) met with Chicago White Sox owner Jerry Reinsdorf, the league's chief negotiator, to lay out the city's position in the tense lease negotiations that are seen as critical to the future of the $535 million stadium project. Also, baseball officials have said they will not name a new owner for the Nationals -- owned collectively by the league's 29 owners -- until a lease is in place.
The District wants to have stadium financing in place by the end of this year and begin construction early next year to meet the tight timetable to open the ballpark along the Anacostia River by March 2008. One of the highest priorities is securing investment-grade construction bonds from Wall Street.
Therefore, city officials said they are seeking the $24 million credit letter to satisfy bond raters that stadium rent will be paid by the Nationals even in an unforeseen event such as a player strike or terrorist attack. The bond raters said they will not grant the construction bonds investment-grade status without such a guarantee.
Also yesterday, the D.C. Council voted 11 to 2 to give final approval to three technical amendments to correct mistakes in wording in the baseball stadium financing package, which relies primarily on public money. The amendments deal with tax issues and were also sought by city officials to help secure investment-grade ratings.
The council's approval relieved the fears of some city officials who had worried that some members might attempt to move the stadium to another location or force Major League Baseball to contribute more money.
Williams left for a business trip to Atlantic City yesterday afternoon and could not be reached. Of the meeting between Williams and Reinsdorf, mayoral spokesman Vince Morris said Williams "felt he had to step into the process. Mostly it's been lawyer-to-lawyer, and the mayor thought it was important to be there today."
Also present for the meeting were Mark H. Tuohey, chairman of the board for the D.C. Sports and Entertainment Commission, and William N. Hall, a commission board member.
After that meeting, baseball officials resumed lease negotiations with Tuohey and other commission and city officials in a closed-door meeting that went on for several hours. Both parties declined to discuss details of the negotiations.
"We are trying to help the city to deliver the deal that it promised to deliver," said Rick Weiss, the attorney representing Major League Baseball on the negotiations. "It's a complicated project, and the city is encountering some financing problems. MLB wants to be creative and helpful, without turning the deal inside out."
An agreement had not been reached last night.
"The mayor was very persuasive and energized in discussing several of the financial issues involving the lease," Tuohey said. "And the ensuing discussion was very productive."
In addition to the $24 million credit letter, city negotiators asked baseball officials for $20 million to help cover the construction of 1,200 parking spaces at the stadium, sources with knowledge of the talks said.
Baseball officials have said the parking spaces are part of the stadium agreement with the city that was struck last year. City officials said the league has recently made requests that 400 spots for VIP ticket holders be built adjacent to the ballpark or underground, which could cost $20 million more.
City negotiators made clear that the District will not exceed its $535 million budget. They have said that additional requests from baseball officials would have to be paid for by baseball or a new Nationals owner, the sources said.
Even if the sports commission and baseball agree to a lease, the deal still might not be finished. D.C. Council member David A. Catania (I-At Large) is lobbying for the council to get a chance to vote on the lease terms.
Council Chairman Linda W. Cropp (D) has said she is awaiting a legal ruling by the city's attorney general and the council's lawyers before deciding whether to offer the lease for a vote.