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Councilmember Carol Schwartz 
Current Thoughts on Baseball
December 19, 2005




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Councilmember Carol Schwartz's Current Thoughts on Baseball

12/19/2005, 7:29 p.m.

When the announcement was made that the District was chosen as the newest Major League Baseball city, I was thrilled because I had long wanted to see baseball's return to the District. But that was before I saw the deal -- the big, fat giveaway deal where the District pays for everything. I had never seen such a one-sided deal in my life. So I voted "no."

I was told, however, that some of the inequities that tilted the agreement against the District could be taken care of in the lease. Obviously there was confusion, because Major League Baseball's perceived inequities are the only ones that got addressed. Ours got lost somewhere. 

I have been worried about this whole deal for more than a year now: the site, where we had to negotiate with 23 different property owners to acquire it; the unlimited compensatory damages, (finally capped at $19 million -- still far too high); the unlimited cost overruns, which could mean hundreds of millions of dollars -- all of which would have to be paid by the District; the ballooning costs of the project, initially figured at $435 million and now, only a year later, projected at $667 million; the fact that these ballooning costs now do not even include the needed infrastructure improvements, such as adequate roads and sidewalks, Metro station expansion (which must be done to avoid dangerous circumstances), and necessary security; the wholly inadequate planned parking of a motley 1,100 spaces for a stadium where the minimum capacity would be 41,000; the environmental concerns about a site which has housed trash transfer stations and other industrial operations; the uprooting of established, revenue-producing businesses; and the dislocation of essential WMATA and WASA facilities, which would have to be relocated to some other central site, and who knows at what cost to taxpayers and ratepayers; etcetera, etcetera, etcetera.

And the beat goes on. As a Sunday Washington Post article pointed out, of the last nine publicly funded baseball stadium deals, six had cost overruns ranging from $30 million to $115 million. However, only one of those deals required the public to foot the entire bill for the cost overruns. I do not want the District to be the second. The original agreement gave Major League Baseball 2,000 club seats, and the lease, a year later, gives them at least 3,800 club seats. And now, the Construction Administration Agreement, which just arrived late Friday, appears to give them 4,300. And the beat goes on. Even the $20 million "gift" from Major League Baseball, which is not even due to arrive until 2008, came with a price -- one-third of non-game day parking revenues worth at least $13 million, and that "gift" was directed to "fixtures and equipment" (another benefit for MLB). And the beat goes on.

Mark my words: even though we set a borrowing limit of $535 million, this project as proposed by the current lease will likely cost a billion DC tax dollars. We have already taken $125 million from our federally mandated rainy day fund for this deal that will not be paid back by the Sports and Entertainment Commission for three years, if ever. We don't even know if Congress will allow us to leave that money out of the fund for three years or if they will require us to replenish it sooner.

There are just too many unknowns here. Is there underground parking or not? And if there is, who's paying for it? I keep hearing that the federal government and/or developers will pay or share the cost of infrastructure improvements. Who knows what the federal government will do? And, of course, developers are in business to make money, not to give it away. So, you can be sure that if they do pay for the infrastructure, they will want something in return -- be it more development rights or tax increment financing. So, either way, we pay. Then we are told of all the benefits the community will reap from the Washington Nationals Foundation, but with no dollar amount attached to it. 

It has been said by top stadium advocates that the Council should go ahead and move forward by approving this lease, and then negotiate with the team once owners are chosen. I agree that we should have been negotiating with the owners all along, and I find it extremely unfair that we did not have that opportunity because Major League Baseball unilaterally decided not to choose an ownership group until the deal is finalized. However, let's be clear, if this lease is approved, that is it - in spite of the wishful thinking of some. I cannot imagine there being any renegotiations with the team. What leverage would we have in such negotiations? The city will be committed to building the stadium by then, and the owners will have just paid nearly half a billion dollars to Major League Baseball for the team. Who really believes they will be lining up to give money to the District? It just doesn't work like that -- and the Washington Post, its December 18th editorial notwithstanding, knows it.

Furthermore, I have very little faith in the Sports and Entertainment Commission to negotiate on our behalf anyway. They have proven they cannot and will not. The baseball agreement and the lease speak for themselves. Let me also remind you of the mess they got us into when they negotiated to plop a racetrack down in the middle of a residential neighborhood -- a deal we still have not been paid for.

We need an opportunity to consider the RFK site. I have always said that RFK was the site that would make the most sense for a new baseball stadium. Even the baseball stadium site evaluation commissioned by the Mayor concluded that a new stadium could be built without impeding the use of the existing stadium, and that the vast amount of land at the RFK site "provides unparalleled opportunity for complementary development." The evaluation also showed that RFK would be the least expensive site on which to build. So, why was RFK largely ignored? In a briefing to the Council last year, a member of the Mayor's baseball negotiating team indicated that the RFK site was never seriously considered. Well, it's time to seriously consider it.

The Southeast site also has the misfortune of being surrounded by three military complexes and is in close proximity to the U.S. Capitol, which will require the District to provide heightened security on game and other event days, as we were reminded of by the Washington Times today. And security is not a one-time expenditure. This will be an ongoing operational cost borne by taxpayers that will remain from here to eternity.

If the deal comes back with only "technical changes" that render it essentially the same as before, I am prepared to vote "no." It would be reckless to commit tax dollars to such a hugely expensive project so rife with risks -- risks written into the deal itself, and risks still unknown. We must get this right. If we do not, we jeopardize our hard-earned financial stability and could lose our limited home rule. It has happened before and, unfortunately, it could happen again. I, for one, will not be complicit in bringing back a federally imposed control board.

If a "no" vote from me means baseball walks -- and I hope that it won't, but it might -- I know I will be among those who will be blamed. But I would rather be blamed now for being responsible than be blamed later for being irresponsible.

ADDENDUM (12/20/05, 9:55 a.m.): The above issues have been raised directly with Major League Baseball and I hope that many of them will be adequately addressed so that, in the end, I may have the opportunity to vote favorably.

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