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Councilmember Carol Schwartz
Statement on ballpark financing bill
November 30, 2004




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Councilmember Carol Schwartz
November 30, 2004

Madam Chair, I was excited about the prospect of baseball returning to the District. I was looking forward attending a major league game in this city and rooting for the home team. But, then I saw the deal.

I understand that the District must be willing to concede certain things to Major League Baseball to get a team and I am more than willing to do so. However, I am not willing to give the store away—and that is exactly what the legislation before us, as it stands today, will do.

This deal was negotiated grossly in favor of Major League Baseball. I often wonder who was negotiating for us – who was protecting the interests of the District!

There are so many examples of why this is a bad deal for the District, but—because of time limitations—I will only elaborate on what I think are the most egregious.

The District is required to pay for any cost overruns for the construction of the stadium, and who knows how much that could be? We haven’t even broken ground yet, and the CFO has already upped the ante by $91 million, and our auditor even more! In addition, the cost of any environmental cleanup of the site has not yet been factored into the current figures, nor have costs associated with any water level problems caused by the site’s proximity to the river. And we don’t even own any of the land, so we will have to negotiate with 65 different property owners with great potential for additional costs, court cases, and delays. Those delays would mean not just construction cost overruns, but huge compensatory damages that would be owed under this agreement to the team owners. And this is perhaps my greatest concern.

And – listen up here folks. If the stadium is not completed by March 1, 2008, the team is entitled to recover compensatory damages from the District, including without limitation, lost profits derived from private suites, club or other premium seats; parking, concessions, naming rights and other advertising, signage and sponsorships, and other costs incurred by the team as a result of the missed deadline, and this is irresponsible.

So, in essence, the Council would be writing a blank check to Major League Baseball. And, when all is said and done, it is not hard to imagine us looking at a final price tag of closer to $1 billion.

On the other hand, if the District builds the stadium and the team decides to leave DC before the end of the 30-year lease, the District is then entitled to damages. How much? We don’t know because the agreement provides that that little detail will be negotiated later in the lease. I can just see it now…when we finally get to the lease, the team offers us $3.00 if they leave early, and we balk and say it should be $300 million, not $3.00. Then people start saying we have to take the $3.00 or the team will walk. And, of course, we take it – tough negotiators that we are.

I am also not convinced that the Anacostia Waterfront is the best location for a stadium. This site is already home to tax paying businesses, whose tax dollars we will lose when we displace them. Furthermore, there are numerous construction cranes dotting the skyline in that area, so economic development around this site has already begun in earnest without the stadium. I recently spoke with a developer’s representative who told me that they attempted to do another project in that area but was told "No" by the city. I can’t understand why the city would impede a private developer’s efforts to develop the waterfront and then ask the taxpayers to subsidize a stadium in that area to spur development.

I also have concerns about the level of business taxes that would be levied to pay for the stadium. Now, proponents of this legislation have often indicated that the same thing was done for the MCI center. But, it was really quite different. The legislation before us today would require the top tier businesses to pay $48,000 per year for the next 35 years. That’s $1.68 (one-point-six-eight) million for each business! That’s quite a burden to place on businesses that can easily walk away from the District and take their jobs with them. By contrast, according to the CFO’s office, the top tier businesses under the MCI legislation paid a mere $11,000 per year for 6 years for a total of $66,000. That’s not even close to comparable in my book.

For all of this investment of District taxes the District gets a team and not much else. We don’t get any portion of the naming rights of the stadium that we are building and will own. And, we only get to use the stadium for other purposes for 12 days per year. Whoopee! The rest of the time the team owners can rent our stadium out and get paid for it.

This baseball proposal has caused me great consternation, and rightly so. Do I want to be remembered as someone who helped kill off baseball? And the answer is no. But do I want to be remembered as someone who helped cause financial instability to return to the District, after working so hard to regain it, and then to maintain it? The answer is an even more resounding no.

For these reasons – and more – I intend to vote "no" on the legislation before us today. I do hope a better deal will be negotiated before the second vote, so that I might be able to vote differently then.

Thank you Madam Chair.

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