D.C. Council Chairman Linda W. Cropp blocked approval of a bill to build a baseball stadium with public money yesterday, announcing that she has a plan that could provide up to $350 million in private funding.
Cropp's action came during two hours of closed-door debate by the council shortly before its legislative session and marked the second time in five days that she has stunned her colleagues with a new stadium proposal.
Seven of the 13 council members said that they were prepared to vote in favor of Mayor Anthony A. Williams's plan to construct the stadium along the Anacostia River in Southeast Washington. Cropp (D) abandoned an alternative proposal she made last week to build near Robert F. Kennedy Memorial Stadium. That proposal had failed to muster much council support.
But after telling colleagues that she would support the mayor's site, she tried and failed to get them to agree to delay the vote for two weeks. Cropp then exercised her power as chairman and removed the bill from consideration, placing it on the agenda for Nov. 23.
Cropp said that over the next two weeks, she will finalize details of a plan to provide private financing for the stadium, estimated to cost as much as $530 million.
But by last evening, Cropp had tempered her morning actions by telling reporters that she would back the mayor's financing plan if her support was needed to save major league baseball's return to the city. Cropp said that if her private financing package "does not make sense, I am prepared to move immediately forward with the mayor's proposal to bring baseball to this city."
The idea of private financing was proposed to Cropp late Monday afternoon by Richard A. Gross and his business partner, Michael Sununu, son of John Sununu, who was White House chief of staff under President George H.W. Bush.
Gross and Sununu, who own the firm BW Realty Advisors LLC, offered to pay two-thirds of the cost in exchange for exclusive rights to build the stadium, said Fred Cooke, their attorney. The District would provide about $150 million for infrastructure improvements and 21 acres near the Washington Navy Yard and South Capitol Street.
Under the plan, the city would lease the land to Gross and Sununu, who would recruit investors to raise $350 million. That money would be used to build the stadium, a small office building and a parking structure. Gross and Sununu would lease the stadium to the baseball team, using the rent money and revenue from ticket and concession taxes to repay the debt.
The city would not collect rent on the land for about 25 years, after which Gross and Sununu would have the option of paying off the lease or giving the city the stadium.
Stephen M. Green, the mayor's point man on baseball, described the proposal as a tax shelter that relies on a loophole in the federal tax code to generate tax benefits for a private investor claiming depreciation on a public facility.
"My plan will eliminate government financing and eliminate the risk," Cropp said. "Everyone would have to admit that if we were able to deliver a stadium at the South Capitol site while saving the citizens and our businesses $300 million to $350 million, it is extremely valuable for us to take this two-week period to see if it can be accomplished."
Council members reacted with skepticism yesterday.
"What was pretty clear is that this was a proposal that was not ready for prime time. It was not thought out," said Adrian M. Fenty (D-Ward 4), who opposes using public money for the stadium. "There's no way to negotiate with a private developer to build a $500 million stadium in two weeks. That proposal is dead. It's not going to happen."
Williams (D), who was attending a ceremonial reopening of a pedestrian plaza on Pennsylvania Avenue in front of the White House, hustled back to the Wilson Building. At a hastily arranged news conference, he called the chairman's move a "setback" because it was slowing down the process of getting a team.
Under Williams's plan, the stadium would be financed through a combination of a gross-receipts tax on big businesses, a tax on concessions and an annual rent payment by the team. Under Cropp's new proposal, the city would implement a gross-receipts tax to raise its $150 million share. But the top rate would be reduced from $48,000 a year to $7,000.
Williams said he had hoped the council would approve his plan and then explore private financing options during the next several months. The financing structure could always be altered by the council, he said.
"I don't think the way to do this is to delay the vote," Williams said. "This project is still at risk because of the uncertainty."
Williams said his administration had been approached by other developers with similar plans, all of which were deemed too risky or uncertain.
Like most professional sports leagues, Major League Baseball favors public financing of stadiums because it reduces risk to the owners and the organization and increases the value of the franchise.
Major League Baseball officials, who have agreed to relocate the Montreal Expos to Washington in the spring if the mayor's stadium plan is approved, have given the city until Dec. 31 to complete a deal.
Williams "knows the legislative process better than we do," John McHale Jr., baseball's executive vice president for administration, said yesterday. "So we will refrain from any public comments until we reach the deadline."
In 2002, Gross's former company, Property Funding Group LLC, was hired to put together for the St. Louis Cardinals a deal similar to the one offered Cropp. The Cardinals plan to open a $402 million ballpark in 2006.
Under the terms of that proposal, Property Funding Group was responsible for finding $60 million to $75 million in private investment, according to the St. Louis Post-Dispatch. The deal collapsed last year after the Cardinals learned that a principal in Gross's firm had been named in a terrorism investigation. The man, M. Yaqub Mirza, is not involved in BW Realty, Cooke said.
David J. Roodberg, president of Horning Brothers, a D.C.-based developer, said Cropp's plan would be hard to work out in two weeks. "This is an incredibly complex deal," Roodberg said. "I would think it would be incredibly difficult to put this on a fast track. But if all of a sudden you have private people saying they're willing to put up the money, strange things can happen."
Williams expressed outrage that Cropp had held private discussions with the council on a matter of such significance. He said he would pursue strengthening the city's open-meetings laws. "Why you do it in the dark of night is beyond me," Williams said. "This is a classic example of the need for more transparency."
Staff writers Thomas Heath, Dana Hedgpeth and Neil Irwin contributed to this report.