Metropolitan Washington Baseball, a group of investors seeking a baseball expansion franchise for the District, yesterday reached agreement with the D.C. Armory Board for a 45-year lease on RFK Stadium.
The lease, which would supplant the letter of understanding Metropolitan Washington Baseball has had with the Armory Board, is subject to approval by the City Council.
"I think it will help our effort to get a team," said Metropolitan Washington Baseball's organizer John Akridge. "We have a place to play. All we need now is a team."
The proposed lease includes a significant change in a mechanism that would be used to finance the $35-40 million renovation program the group would undertake if awarded a 1993 National League team.
The renovation was to be partially funded by $25 million in tax-free revenue bonds the Armory Board was going to issue prior to Dec. 31, when its authority to issue the bonds expires. Under the lease, the Armory Board would issue taxable bonds only if Akridge's group is awarded a team.
In the long-run this may cost more in interest payments, but it solves a number of potential problems for the Armory Board and keeps open its options with regard to the Washington Redskins, whose lease for the stadium expires at the end of this season.
If it had issued the tax-free bonds, the Armory Board would have had to pay non-recoverable underwriting costs of about $1 million without even knowing whether Akridge's group had made the short list of expansion finalists.
Also, Internal Revenue Service regulations regarding the bonds would have required the Armory Board to spend the money that it would have raised, regardless of whether Akridge's group was awarded a team.
The Armory Board and Redskins owner Jack Kent Cooke have yet to reach an agreement on Cooke's plan to build a new football stadium or on an extension of the current lease.
Tax-free bonds could have jeopardized a lease extension because IRS regulations might have forced the Armory Board to make renovations under a timetable that caused scheduling conflicts with the Redskins.