Many of the D.C. businesses that would be taxed to help pay for a new baseball stadium said yesterday that they support the preliminary details of the proposal, which as currently envisioned would cost the city's largest companies up to $28,000 a year.
The proposed tax would apply to District-based businesses that take in at least $3 million a year in gross receipts -- nearly 2,000 businesses in all, city officials said. They said the smallest of those businesses probably would pay about $2,500 a year and the largest about $28,000.
Bob Peck, president of the Greater Washington Board of Trade, said most members of his group responded favorably to the proposal after city officials laid out preliminary details for them during a flurry of hastily scheduled briefings over the past two days.
"We're talking numbers that for a lot of the larger members, at least, are not going to break the bank," Peck said.
Jamie Williams, president of the D.C. Building Industry Association, said his members also generally supported the plan after being briefed by Deputy Mayor Eric W. Price last night.
"While in general no one is in favor of new taxes, it seems in this case that the benefits certainly outweigh the burdens," he said. "The hope, of course, is that the numbers might change and be less than that, but I think we need to have faith in both the executive branch and the council that the details will be worked out in a fair and timely manner."
The tax proposal, which would raise money to help finance a $440 million stadium project, is closely modeled on the levy imposed on businesses to help pay for MCI Center. Several business leaders said their experience with that plan helped persuade them to support the proposed stadium tax.
"This is deeply reassuring to many of us if you liked what happened there," said Charles "Sandy" Wilkes, chairman of the Wilkes Co., a real estate development firm.
To help pay debt on the bonds sold for MCI Center, the city collected an average of about $9 million a year in taxes from companies with gross receipts of more than $2 million a year. The city paid off the debt early, ending the tax and retiring the 15-year bonds in 2001 after seven years.
To pay the debt on 30-year bonds for the stadium, which would be built on the Anacostia waterfront, city officials propose collecting $21 million to $24 million a year from the gross receipts tax; $5.5 million in rent from the baseball team's owners; and between $11 million and $20 million a year from in-stadium taxes on tickets, concessions and merchandise.
John Ross, a senior adviser to the city's chief financial officer, said such a revenue stream would enable the city to retire bonds early once again. "If [in-stadium taxes] come in at less than $11 million a year, we'll still have plenty to make payments, but we just won't be able to pay early," Ross said.
Peck said Board of Trade members were told by city officials that conservative estimates suggest the bonds could be paid off in about 23 years.
Some business leaders said they were told months ago that a gross receipts proposal might be part of the financing package. But they said the whirlwind briefings from city leaders during the past two days have not provided much time for them to poll members and come up with firm endorsements or rejections of the plan.
The D.C. Chamber of Commerce, whose president and chief executive, Barbara Lang, attended a city briefing Wednesday, issued a general statement of support for a baseball stadium, saying the city's bid "looks very promising." But Lang declined to comment further, saying in her statement that she needed to go over the details and discuss the issue with members.
Price said city officials decided to brief the business community before describing the proposal to the general public because businesses would be footing much of the bill for the stadium. He said he realized that city government still needs to make the case for a stadium to residents, and he pledged to do so through public hearings and other community meetings when the D.C. Council considers stadium financing legislation.
Charleen Drew Jarvis, president of Southeastern University in Southwest Washington and a former council member, said the people she has talked to "are excited about the growing vitality of the Southwest-Southeast community from which we draw many of our students. When a baseball stadium is added to the excitement of waterfront development, of additional housing and of new retail, we believe that we are really going to have a revived urban community."
The challenge, she said, is to build the stadium "without increasing the responsibility on resident taxpayers."
Some critics of the gross receipts tax contend that it would indirectly burden city residents because it would make it more difficult for officials to raise taxes for other, more pressing needs.
"Elected officials don't like to raise taxes, and if they do a substantial tax increase now, it's hard to imagine that they could do it again in the near future if an urgent need should come up," said Ed Lazere, executive director of the D.C. Fiscal Policy Institute, a liberal think tank concerned with fiscal impacts on the city's low- and moderate-income residents.
Staff writers Debbi Wilgoren and Lori Montgomery contributed to this report.