December 19, 2005

Opinionist: Approve the Stadium Lease

2005_0516_Image of Baseball.JPGEditor's Note: Tomorrow the D.C. City Council will choose whether or not to approve the lease on a new stadium for the Washington Nationals, a historic and decisive vote that will either give the go-ahead to its construction or send city officials and MLB back to the negotiating table. Being that this issue has generated so much debate since last year, we are honored to have two guest writers offering opposing opinions on the stadium lease. First off is Vincent Morris, chief spokesman to D.C. Mayor Anthony Williams, speaking in favor of the stadium.

Approve the Lease Already!
By Vincent Morris

The biggest problem we have with this project is people who don't understand the 2 key parts of this: what the stadium costs and how the city is paying for it. I am hoping that DCist readers are sharp enough to see through the murk and understand what this deal is all about.

First the cost. $667 million is really not a fair description of the cost of the ballpark. It describes the stadium complex, which includes a lot of items that probably never should have been counted as part of the project. The actual stadium itself will probably cost about $315.4 million. Read that number again because you hardly ever see it written by the Washington Post or elsewhere. $315 million pays for the seats, lights, restrooms - all the hard costs of the structure. So what accounts for the difference? Here are some of the items that, when added to $315, gets you to $667.

>> $24 million to renovate RFK Stadium last year; this includes new turf, sprinklers, rolling stands, etc. I've never understood why this was counted as part of the cost of the new stadium, but there you go.

>> $3 million for public art (DC law requires any public building include artwork - I am not kidding here.)

>> $3.5 million to build a grand public park/plaza that will stretch far beyond the stadium footprint.

>> $4 million to build some sidewalks around the stadium; obviously the benefit here extends far beyond the ballpark.

>> $30 million in financing costs, even though financing is rarely counted against the cost of an item, like a house or a car.

>> $1.5 million for the city to pay its own permitting fees.

>> $12.9 million that Pepco is charging us to pay for utility upgrades in the area around South Capitol Street.

2005_0516_Nats Hat.JPGRemove all those items and the ballpark price looks easier to digest.

Then there's a whole separate tally of things that are related, but do not go for the stadium structure itself.

For instance, of the $667 million, fully $100 million of that goes to buy the land. We can't really do much about the hot real estate market - other cities typically pay a fraction of that for land. On the plus side, we are making average property owners very rich.

Despite the fact that the property owners are becoming millionaires (most parcels in the 19 acre site were valued at over $1 million) the city has agreed to pay another $4 million to help them relocate their businesses.

In addition, the parking garage that we're building costs $21 million. It will only be used 81 times a year for baseball. Beyond that, it will be used by commuters and we will keep two-thirds of the revenue. Of course, it also benefits the entire area.

Also in that category is the Navy Yard Metro stop. For 365 days a year, that stop will be used by federal workers at the Navy Yard, the new Department of Transportation headquarters and others. Yet we are setting aside $21 million to improve the Metro and another $12 million to pave roads. Again, these costs will benefit a whole range of development in the area - not just the ballpark. Yet critics count all of those costs against the stadium complex.

Second is how the ballpark is being paid for. There are 4 sources of revenue, and none of them directly impact the average citizen in Washington DC, Maryland or Virginia:

>> Ballpark Fee, paid by 2,000 of DC's largest businesses. Will raise $14 million a year.

>> Utility tax, will be paid for primarily by the federal government and large businesses (like the Washington Post). Will raise $12 million a year.

>> Ballpark taxes, assessed only on people who buy tickets, concessions, etc. 80 percent of those live outside DC. This raises $10 million a year.

>> Lease payments, assessed on the Nationals. This raises $5.5 million a year.

These 4 sources will raise more than $40 million a year, which is more than what the city has to pay each year to cover the bonds. In addition, we get to own the stadium and DC gets a baseball team after a 24 year absence, revitalize a neglected corner of the city and protect taxpayers from direct harm.

One other major point. The Washington Post, very sloppy when it comes to reporting on the stadium project, ran a story this weekend on cost overruns. They omitted several critical points, including:

>> The paper never mentioned Baltimore's Camden Yards, which was about 95 percent paid for with public funds - yet is obviously considered a success in that city.

>> Failed to note that three of the stadiums with significant cost overruns, in Seattle, Arizona and Milwaukee, were built with retractable roofs. That makes them more costly and subject to overruns. Very different from our stadium and not useful for comparison sake.

>> Besides a $20 million payment, the Nationals are also paying $5.5 million for 30 years as lease payments. The total amount the team will pay is $165 million, though the net present value for accounting purposes is $85 million. The combined share is $105 million, which is one third of the stadiums' $315 million cost. Not bad.

>> They also failed to mention that our construction company has a track record of delivering projects on time and on budget.

I hope you consider these facts as you weigh the pros and cons of this project.


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Comments (13)

Rest assured the virginia republicans are dying for us to stumble so they can steal our stadium.

 

"Read that number again because you hardly ever see it written by the Washington Post or elsewhere."

Perhaps because that's not the amount we'd have to pay? Or because that number is not what is being requested? Or what the final cost of the project will be? Or a cost that would reflect a functioning structure featuring, for instance, electrical power? Or even the land it stands on?

To extend your comparison with purchasing an auto, there's a reason the window sticker doesn't show you the price of a car without tires or transmission fluid sitting in a warehouse in Osaka, but rather the amount they'll expect you to pay before they'll let you drive off the lot. (And you sure better budget to include the cost of financing it.)

Many of the points you make are valid, but it's frankly disingenuous to make this effecively fictional number the center of your opinion piece. If the city decides to build a park, upgrade the sidewalks, etc., then that's within their prerogative as a municipal government. I just don't think that this particular monopoly-shielded corporate interest has done the legwork to convince me I should give them my tax money to make their enterprise more profitable, and it's certainly not a question of whether I'm
"smart enough" to agree with your opinion.

 

Nice posting Martin. I have already seen it reposed on the MLB Nats message board, etc.

I hope the more rational in the Council understand that on top of this, there are millions of dollars in monies coming back to the city coffers which will be "free and clear" money which CAN be used for schools libraries etc.

The hype and mis-information on both sides of this issue are nauseating.

Andrew

 

didn't the Post just endorse the deal? The Stadium Lease Deal

 

I am smart enough to see a con job. Baseball made a significant amountof money off of RFK. The attendance they drew was record. MLB is pretty hard pressed to find another locale with the earning potential.

Mr. Morris is the latest Anthony Williams/Natwar Ghandhi ploy. The comparions between costs and benefits at a stadium at South Capitol or a stadium at RFK have never been evaluated in a transparent fashion by an independent player.

Here is what people need to know - Tony Williams is engaging in a project as a lame duck Mayor who is not accountable to the voters. Natwar Ghandhi has sidestepped the limits placed on him by the Council. VA Congressmen such as Tom Davis will not be paying for any mistakes by the soon to be former Mayor Williams. AT the end of the day, MLB wants baseball in Washington. They do not want RFK because they fear that they will have to compensate Peter Angelos for his lackluster Orioles. It is truly disgusting to see this much energy and resources on baseball and for profits that are going to go to a bunch of millionaires.

 

The best figure of the text above was:


>> Ballpark taxes, assessed only on people who buy tickets, concessions, etc. 80 percent of those live outside DC. This raises $10 million a year.

So this means that the stadium is being built in a city where only 20% care enough to go to the games? Makes sense that DC reisdents don't want to pay for something that is being enjoyed by more residents living outside of DC. Maybe if there was some cost sharing with Maryland & Virginia this bitter pill might be easier for DC residents to swallow....

 

Nikolas,
I'd just like to point out 80% of ticket buyers coming from outside DC doesn't translate into only 20% of the DC populace caring enough to buy tickets. 20% of ticket purchasers will be DC residents (or so they are projecting) but that 20% could be 50% of the DC population or 10%. The two populations are independent.

 

Nikolas:

That's a remarkable misunderstanding of statistics. Saying that 80% of attendees at baseball games are from D.C. does not mean the same thing as "only 20% [of D.C. residents] care enough to go to the games."

Last season, there were 2.5 million tickets sold to Nats games. Of those, approximately 20% were D.C. residents: that's 500,000. Now, I don't know if 500,000 D.C. residents came to one game each (unlikely), but the 2004 population estimate for D.C. was 553,523. I'd say between one third and half of those people probably came to at least one game, with a small number of them coming to several.

Further, if Virginia is expected to kick tax money in to the stadium, then D.C. had better be willing to kick tax money to Virginia for assorted infrastructure upgrades: I don't think that's a game that D.C. is willing to play.

 

Nicholas,

No offense, but that is a specious argument. The fact of the matter is that the populations of MD and VA are far greater than DC. If anything your rational is supportive of the stadium for all the new non-DC money that will be coming into the city coffers.

Andrew

 

Comments noted ;-)
Lemme do some math really quick:

from ESPN, total attendance was 2,692,123 and..

2,692,123 / 80 games = 33,651 per game average
2,692,123 X 20% = 538,424 approx DC attendees
538,424 / 80 games = 6,730 DC residents per game

33,651 - 6,730 = 26,921 from outside of DC.


The main point I'd like to make, something that many folks have over looked, is that the council members are only accountable to DC RESIDENTS not residents from MD or VA.

With a majority of attendees being from outside of the district, its important to note that as a DC resident I will be paying for suburbanites to come into the city to support a corrupt monopoly known as MLB.

I have attended Nationals baseball games at RFK but due to MLB's legalese, I am not allowed to talk about what goes on at baseball games because the MLB is that corrupt.

http://tinyurl.com/a3pnw

Remeber to check the back of your ticket before you talk about the last baseball game you went to because you might be violating MLB's stipulations- known and unknown in the universe....

 

Nikolas, I think these comments are a little dogmatic. Making a public investment in a stadium project that is intended to generate revenue for the District and spark economic development in the district is quite the opposite of being "accountable" to suburbanites.

With that logic, you would also have to oppose all publicly-funded efforts to promote tourism in DC, as one other example. The whole concept of public investments like these is to generate economic development and revenue for the District. Debating the economic benefits of this particular deal is absolutely fair game, but arguing that we shouldn't support the stadium b/c mostly non-residents go to games isn't valid. As Andew mentioned above, that fact actually supports the idea of the stadium bringing revenue to DC.

I appreciate that you want our officials to be accountable to DC residents, but this issue is just much more complex than that.

 

Nikolas,

I think it was pretty clear that as a tax payer, you have no financial burden in funding the stadium. I am not sure any of your arguements are going to fly on this one.

As for the DCist people, great scoop you guys have here. Tomorrow at this time we shall have a new source of revenue for the city, and a way to clean up one of the worst sections of the metro area.

Nick

 

Well done article - one edit - DC has been without an MLB team for 34 years, not 24.

And Nikolas, building a stadium in DC creates the opportunity for residents of MD and VA to come into DC and spend their disposable, entertainment dollars - with 10 cents off of every dollar at the stadium going to the District's tax coffers.

 
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