The cost of building a baseball stadium and renovating Robert F. Kennedy Memorial Stadium could be $91 million more than city officials initially estimated, according to an analysis released last night by the District's chief financial officer.
In an eight-page letter to D.C. Council Chairman Linda W. Cropp (D), Natwar M. Gandhi said the total cost of the stadium package could reach $486.2 million, not the $395 million stated in the agreement between the District and Major League Baseball.
The additional costs are in three areas: $50 million for improvements to roads, sewers and Metro; $11 million more than estimated to renovate RFK; and $30 million more than estimated for contingency funds for likely cost overruns.
"As a result of the increase in project costs, more money will have to be borrowed and debt service will increase," Gandhi wrote.
Gandhi's figure does not include an additional $40 million in financing costs, which would put his estimate for the total package at about $530 million. City officials have estimated the total at $440 million.
Under a pact with Major League Baseball, which intends to move the Expos from Montreal to Washington in the spring, Mayor Anthony A. Williams (D) has agreed to build the stadium through a gross-receipts tax on large businesses, a tax on stadium concessions and an annual rent payment by the team.
Gandhi estimated that the city would need to collect $2 million a year more in gross-receipts taxes on the city's largest businesses to pay the debt service.
"This just looks like a continuous spiraling upward with no end in sight," said council member Adrian M. Fenty (D-Ward 4), who opposes using public money for the stadium. "It would be fiscally irresponsible for the council to approve the plan."
But city officials disputed much of Gandhi's analysis. For example, they said that renovations to Metro are not necessary and, even if they were, could be paid for partly by Virginia and Maryland, whose residents would be attending games.
Furthermore, the officials said, they had built into their financing plan the ability to issue up to $500 million in bonds without changes to the gross-receipts tax.
"What [Gandhi] says doesn't really bother me," said Stephen M. Green, a special adviser to the mayor on economic and baseball issues. "It doesn't really change our financing. We can do this. . . . Every time I've dealt with him, he makes a fiscal impact statement like the end of the world is coming. It's what he does. . . . My job is to be middle-of-the-road."
Gandhi's conclusions set the stage for what probably will be a long and contentious public hearing on the stadium financing legislation before the D.C. Council at 10 a.m. today at the Wilson Building. Two hundred eight panels and individual speakers have signed up to testify, one of the largest lists in council history.
Two council committees will mark up the baseball legislation Wednesday, and the full 13-member council could take a first vote Nov. 9.
In an attempt to appease residents and groups opposed to using public funds, Williams announced yesterday morning that he would seek to create a community investment fund worth as much as $400 million to build and renovate schools, public libraries, parks and athletic facilities by harnessing the economic energy generated by a new baseball stadium on the Anacostia waterfront.
"We've heard the call from our public to link our baseball initiative to continued support for other important priorities in the city, and that's what we're going to do," Williams said at his weekly news conference, where he was flanked by a dozen ministers and labor union leaders and two D.C. Council members.
"We're going to . . . match our community investment to the value of the stadium project," Williams added. "We've listened to our citizens, we've listened to our leadership and we're acting."
But the mayor's proposal was immediately denounced by some stadium opponents, who said the lack of details showed that the plan is theoretical at best.
"Can they really generate $400 million? It's not clear. When will it start? Unclear," said Ed Lazere, co-leader of a group called No D.C. Taxes for Baseball. "It will be interesting to see how people react to it. Do they believe it? Do they trust that it's real?"
Under the mayor's new proposal, the city would sell as much as $400 million in bonds and dedicate the money to the community investment fund. Williams said he and council members have yet to decide how to allocate the money. His only requirement, he said, is that it be spent to build and renovate facilities rather than to pay salaries and operate programs.
City Administrator Robert C. Bobb said the bonds would not be paid back through existing revenue, but he declined to elaborate. After the stadium is built by 2008, officials said, development in the surrounding community is expected to contribute a gush of new taxes to city coffers. At that point, those new taxes would be used to repay the bonds.
While the city has used this form of financing -- known as tax increment financing -- on a number of city projects, much remains to be determined about this one. The mayor said he has yet to decide the boundaries of the tax district.
The Rev. H. Lionel Edmonds, pastor of Mount Lebanon Baptist Church, said the mayor's promise to create the fund marks a significant improvement over what the stadium legislation initially promised the community.
Gandhi's analysis of the stadium deal was based in part on interviews his office conducted with officials from the D.C. Sports and Entertainment Commission, the D.C. Department of Transportation, Metro and the D.C. Water and Sewer Authority. Also considered were previous large projects, such as the Washington Convention Center, and similar stadiums in other cities.
But Green challenged many of Gandhi's basic assumptions. Cost overruns to renovate RFK might not occur because not all renovations have to be completed before Opening Day on April 15, he said.
He argued that an upgrade to the Metro station nearest the proposed site for a new stadium in Southeast -- near the Navy Yard and South Capitol Street -- is not necessary because people can get off at other nearby stations, too.
Council member Jack Evans (D-Ward 2), one of the leading supporters of the stadium plan, said Gandhi's estimates did not change his position.
"People are comparing apples to oranges to tomatoes, throwing numbers around," he said.