Morning Roundup: Bounce Back in Your Step Edition

D.C. CFO Gandhi's newest scare tactic is based on Herb Miller not even paying for his own project. Of course, we should realize that this not why the Mayor chose Herb Miller to lead the mixed-use project at the stadium site. I think it is safe to say that Herb Miller should be able to secure financing for his own project. He already has preliminary funding lined-up anyway. The hysteria never ends.....just like when the new D.C. Convention Center was (narrowly) approved. Even with the cost overruns for the new convention center, D.C. still has gained more than it spent in increased revenue and economic activity.

How the heck did we agree to build parking for a baseball stadium that is so close to a Metro station? There's no parking at AT&T Park (built in 2000, admittedly financed privately) or at Wrigley Field (admittedly, far older).
What a stupid waste. And certainly won't promote a transit first planning policy for the district. Which again makes me think that this area is going to have all the character of Dulles Town Centre.

Even with the cost overruns for the new convention center, D.C. still has gained more than it spent in increased revenue and economic activity.

"Do you have numbers to back up these claims? I haven't personally seen any assessments on the economic results of the convention, but I haven't been looking either."

I welcome a good challenge. I have some other work to do right now because I actually have a life which I like to keep exciting and rewarding. But, when I return later today, expect a thorough report from me on this topic which you better believe will be detailed and current. I study D.C. economics and revitalization issues for fun, and it will be my pleasure to share some of what I know with you, GhettoBurbs (whatever that means) :-)

I love the photo.

Metro is already stressed during games of only moderate attendence at RFK.

Is this really true? Certainly after a baseball game or soccer match there are more people on the platform at once than at any other time (excluding July 4th, special events) but I'm not sure the wait time is that much more (than weekends or late nights, for example) or that the crowding on the train is that much more (than rush hour, for example). Metro usually provides enough trains frequently enough to move people out of the Stadium Armory station fairly quickly.

Ok, I am back now!

I know that the convention center talk is a little off-topic for this specific thread, but some posters on dcist deserve a little extra attention and care. I am happy to provide it with facts and intelligent knowledge so that they know where they stand and I stand for future conversations.

Let us run through some numbers:

* Total cost of Washington Convention Center - Approximately $850 million.

* In 2005, 191 events were hosted at the convention center. 1.15 million attendees were at these 191 events. These 1.15 million attendees spent $424 million throughout the city.

* The positive economic impact of moving from the old to the new convention center has already been realized in its third year of operation.

* Total assets for the Washington Convention Center Authority are more than its liabilities. Total assets = $834 million. Total liabilities = $540 million. Basic finance ladies and gentlemen!

* 12,000 direct and INDIRECT new jobs were created as a result of the new convention center.

The reason why cities building convention centers is for their direct and INDIRECT economic benefits. When attendies come to D.C., they spend money. Over $400 million dollars in INDIRECT spending happened in 2005 as a result of the city building the new convention center. This means more sales tax revenue for the city. This means more hotel tax revenue for the city. This means better business for hotels. This means better business for restaurants. This means better busines for stores. Better business for hotels, restaurants, and stores means more money the city gets in tax revenue.

Over the life of this new convention center, the direct and INDIRECT economic activity generated in the city is MORE THAN the cost to build the convention center by the city.

Yes, convention centers may operate at a (slight) budgetary loss year over year, but the INDIRECT economic benefit of increased sales tax, hotel tax, etc. greatly exceeds these small costs.

I hope you all can understand this! This is basic economics people.

Now, back on topic. This is the same idea for the Baseball stadium and environs. Yes, the baseball stadium costs the city something INITIALLY. But the mayor is ensuring a viable and economically profitable baseball district to ensure that the city realizes the maximum INDIRECT economic benefits that the stadium will bring. Have a development with 660 condos, 50,000 square feet of retail, and a hotel on the stadium site itself will help the city ensure that it realizes the increased hotel tax revenue, sales tax revenue, real estate tax revenue, and income tax revenue (from the new residents in the condos). The same will happen when the rest of the area gets built out around the stadium. These INDIRECT economic benefits over the 30-year baseball lease should outweigh the initial costs of using public money to build in the first place.

The problem is that most politicians and the public in general can only think to the next election, which is most times 2 or 3 years down the road. You have to spend money to make money in our capitalistic society. Over 30 years, the City should gain back the initial costs through direct and INDIRECT revenue. Most people do not think long term. This philosophy has eluded mankind for centuries now.

For (audited) annual reports on the Washington Convention Center Authority and the Washington Convention Center itself, direct your attention to:
www dot dcconvention dot com

Otavio_dc,

IMHO you're comparing apples and oranges. The Convention center had 191 events, the baseball stadium may be used less than 100 days/year. CC visitors stay in hotels, rent cars, etc., whereas for the most part stadium visitors will buy a view hot dogs and beers. Important differences that can't be ignored.

Arguing to spend $600 million (which ends up being considerably more when you add the debt service) on the stadium assumes there is no other way to spend that much money that will generate a similar rate of return. I'm not sure that's the case. Why not spend that money on a massive public works project to replace the water and sewer system in DC or start funding community based development of distressed properties or use it to subsidize the establishment of a Hydrogen fuel delivery infrastructure?

Then there's the possibility that baseball could ultimately be a crushing failure in DC and the Nats could decamp for greener pastures in 10-15 years. Where would be then?

With all that said, your point about long-term thinking is a good one and worthy of serious consideration. I'm reflexively against the spending of public money on behalf of professional sports teams when there's not a shared risk partnership as in the case of the MCI Center; so I've never really considered that POV. You've given me something to chew on.

Peace,

Hill Rat

Hill Rat,

Thanks for commenting. I believe the Baseball Stadium will primarily serve as an economic accelerator for the Near SE area of DC. I believe the stadium development will accelerate and enhance investment so that maximum tax revenues will be achieved sooner than later. Also, the baseball stadium will diversify the uses in that area, instead of mainly an office park. The cool factor has some value also. Residents, especially future residents, want to be near "cool" things and entertainment - not an office park. An office park was the curve that the Near SE area was on until the stadium was introduced into the mix.

As far as comparing, another poster challenged my comments on the benefit of the convention center. I wanted to stay on topic since the thread is supposed to be about the stadium and parking, so the convention center and baseball stadium appeared to be tied together in my response. These two projects are very different.

As far as how long the Nats stay in DC, I do believe there is a guarantee that the Nats will be in DC for the entire 30-year lease agreement. This is why the lease agreement is so, so important to the city and baseball. I believe this is why it took so long to be signed also.

Even with all the built-in entertainment options that D.C. has, unfortunately, most people outside of the city and D.C. area think of it as largely boring, uninteresting, and totally political. Trust me......I know. I don't live in DC. I live in Europe, and D.C. never gets mentioned as a place that people want to visit. I always hear New York City out of people's mouths. The Baseball Stadium and other developments like Gallery Place will chip away at what the real D.C. really is to outsiders. Plus, most new residents to D.C. come from outside of the area anyway. These developments and amenities will make people think twice when they move the D.C. area for jobs, etc. It will be more likely in the future that they might pick D.C. proper instead of other areas.

It is all these tangible, intangible, direct, and indirect values that will make this stadium project successful. Yes, the direct costs are high, but to tell you the truth, D.C. has some wiggle room right now. D.C. has money in the bank....D.C. has an excellent bond rating...and D.C. has the momentum going for it right now.

Yes, I know we have other concerns in our city like crime, education, etc. But you know what, some of those issues could have been addressed or looked at with significance long ago. It is the elected officials, especially in the D.C. Council, who are to blame for this. The legislative branch makes the law in this city. But then again, new schools and new books don't mean that a student will be ready to learn either. The issue runs much deeper than that.

I believe the long-term value of what the Near SE area will become outweighs the $600 million cost/risk to the city. At a minimum, the stadium will thrust Near SE to a much more fun and diverse part of the city. We really don't need strictly office parks here, you know! The cost of this project, amortized over 30 years really is a drop in the bucket compared to the larger economic engine at hand.

Plus, if you haven't noticed, the business community is a big supporter of this project as a whole. They have been largely quiet after their initial concerns were addressed. They are the ones financing this stadium anyway...........

Well......a lot of tourists visit from the rest of the United States of America.

To a lot of people in Europe and other places, D.C. is an afterthought. May I mention to you New York City again......... Or how about Miami......... Or how about San Francisco............

Washington, D.C. needs more coolness factor.

Of course, there are international tourists that come to D.C., but other U.S. cities have a far, far higher number of international tourists in relation to total visits.

By the way, I was born (Washington Hospital Center) and raised in D.C.

I am returning to D.C. next year, and I can't wait. Just because an ocean separates me from my hometown, it doesn't mean that I don't keep abreast of the latest happenings......

Great find! D.C. can do much better as the nation's capital. New York City has a wide lead in international arrivals to the tune of 3.1 million more arrivals.

Have a great week everyone and thanks for the stimulating conversation. I appreciate it!

Nate,

You are probably right. I hope that people understand that I am a D.C. insider, but right now I am on the outside looking back in. And, from what I can see, Washington, D.C. is not even on the radar as a place people travel to for pleasure because it is fun, cool, or entertaining. A lot of people discover D.C. as an afterthought while they were here on their business trip. New York City is "cool", Miami is "cool" too, and so is San Francisco. People go there for pleasure.

Even with almost 80 museums, even with world-class restaurants, even with the second highest amount of theatre seats in the country, Washington, D.C. is such an unloved city around the world.

As the nation's capital of the United States of America, D.C. should and can do better. D.C. needs some real visionaries at the top who can set the city up for the future instead of just thinking 2 or 3 years down the road.

The current D.C. City Council does not cut it. And, now we are going to elect one of them to represent us to the nation and world? LOL Now, that is a laugh. Well, not really......

You all may not have seen the architectural renderings of the 2 buildings that Herb Miller wants to build on the stadium site, but they don't look like typical D.C. buildings at all. From the roof right on down to the street level, these 2 buildings have a style which will be very new to this city. And you know what, that is exactly what this city needs. We need to break out of the mold of the same ole', same ole'. It does not cut it folks.

By the way, the Lerners, being the conservative bunch, have already shot the buildings down architecturally. I bet you people will be stepping all over each other to get a residence in those buildings once they are built!

D.C. has a lot going for it. This city needs to address the problems and issues that face the people, but D.C. needs to step out of the box and secure a few architectural gems that will bring people here. People want to see stuff like that. I was just in Barcelona 2 weeks ago, and you would not believe how many people go there to look at "cool" buildings and architecture.

You know that shiny, brightly lit Gallery Place complex down on 7th Street? Well, so many boring critics who want the same ole' same ole' shot it down architecturally. But, Gallery Place is exactly the kind of building and place that people want to look at. Oh yeah, Herb Miller was part of that project, too.

People may also not realize the impact that Mayor Williams has made on this city on the international scene. As some of you may complain that he travels too much, Mayor Williams has almost got this city on the radar as a place that has something other than politics. He has done a lot for D.C. awareness around the globe, but a lot of people are too shortsighted to even realize what is happening.

We need visionaries in this city on the command deck.