Mayor Anthony A. Williams
Press release on signing of ballpark financing bill
December 29, 2004

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It's a Home Run - The MLB Deal is Done
Mayor Signs Ballpark Financing Bill

(Washington, DC) After 33 years, it came down to the stroke of a pen. Today, Mayor Anthony A. Williams signed the Ballpark Omnibus Financing and Revenue Act of 2004, creating jobs and contracting opportunities for District residents and businesses, bringing economic development to the Anacostia Waterfront - and returning baseball to the nation's capital.

"Baseball is a powerful economic engine," Mayor Williams said. "It will bring in about $450 million in resources for city health clinics, recreation centers and police cars - that's money we don't have now and money we wouldn't have without baseball." 

As part of the legislative process for returning Major League Baseball to the District, the Council on December 21 passed the "Private or Alternative Stadium Financing Emergency Act of 2004." Under that Act, the Office of the Chief Financial Officer will seek and review submissions for proposed "alternate or private" financing to lessen the new stadium's burden on the business community. Financing plans are due by January 17, 2005. 

The Washington Nationals will begin play at Robert F. Kennedy Memorial Stadium in the spring of 2005. RFK is currently undergoing redesign and upgrade work, including field renovations, changes in the seating bowl, and improvements to the press box and media facilities. Several local, small, disadvantaged businesses (LSDBE) including Devrouax & Purnell, Delon Hampton & Associates, Capital City Associates and Tompkins Builders are involved in the RFK work.

Already, the Nationals have reported that nearly 15,000 season tickets have been reserved for the 2005 season.

The Nationals are expected to move into the Anacostia Waterfront ballpark for opening day 2008. The preferred site for the ballpark on the Anacostia has both Metro and highway accessibility, and will merge well with the area's current and/or planned development:

• The Anacostia Waterfront Initiative: construction of more than 3 million square feet of new office space, more than 4,500 units of new housing, 32 acres of new public parkland, and a 20-mile Riverwalk along both sides of the river. These new uses are expected to generate up to $1.5 billion in new tax revenues over the next 20 years, in addition to more than $4 billion in private investment;
• Nearly 6,000 units of affordable housing in Ward 7 and 8;
• The Southwest Waterfront.

The Financing Plan - Hands Off the General Fund

According to the financing plan, DC's ballpark will be funded by four sources:

• An annual lease paid by the team owners;
• Taxes on ballpark activities including tickets, parking, concessions and merchandise;
• Maintaining the existing utilities tax of 11 percent on non-residential customers;
• A special ballpark fee that will be paid only by DC's largest businesses-those with gross receipts over $5 million a year.

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Bill Summary

• Authorizes the District to issue up to $534.8 million in revenue bonds for the purpose of directly paying or financing the development of a new ballpark, renovations to Robert F. Kennedy Stadium for interim use by the new baseball team, and for future renovations, maintenance, and upgrades of the ballpark.
• Establishes a 4.25% additional sales tax on gross receipts from ticket sales, a 4.25% additional sales tax of gross receipts from sale of baseball merchandise. In addition the District shall collect 1/11th of the 11% gross receipts tax paid by utility providers to the District as well as an additional charge on electricity. Finally, the District shall collect a ballpark fee from businesses, ranging from $5,500 for the smaller businesses to $16,500 for the largest businesses; businesses that make less than $5 million in-gross receipts are exempt. The proceeds from these taxes and fees will be deposited in the Ballpark Revenue Fund to pay debt service on the bonds.
• Establishes a Community Benefit Fund to support community area priorities including recreation centers, small business development incentives, job training and readiness programs, school athletic facilities, and other worthy priorities. The fund will be supported by real property and sales tax increment revenues from the D.C. Baseball TIF area around the ballpark, in order to support up to $450 million in bonds. Of the $450 million, the following earmarks apply:
  • $125 million for school construction and modernization
  • $50 million for infrastructure improvements within the TIF area o $45 million for libraries improvements
  • $45 million of revenue from the bonds shall go to commercial development along Good Hope Road, South Capitol Street, MLK Jr. Avenue, and Minnesota Avenue corridors.
  • $1.0 million for feasibility assessment for the National Capital Medical Center
  • $5 million to DPR for capital investment in a learning and sports center facility at Fort Greble Rec Center
  • $5 million for school-based athletics based upon DCPS needs
  • $5 million for projects in Ward 6
  • $5 million for projects in Ward 7
  • $2 million for McKinley Tech High School
• Ensures that all contracts entered into by the District with respect to the ballpark comply with the District's LSDBE and First Source Employment laws. Mayor is required to take measures needed to assure that at least 50% of work under such contracts are awarded to LSDBEs. Mayor is also required to ensure that contracts comply with apprenticeship requirements, where 50% of all apprenticeship hours performed are performed by District residents. Mayor will also encourage baseball franchise owner to enter into broadcast media rights agreements with LSDBEs.
• Requires Mayor to seek private financing for the ballpark. The CFO will seek submission of proposals, establish criteria for evaluating the proposals, conduct evaluations, and report to the Council on submissions. If CFO finds that at least one proposal meets the criteria and certifies that at least 50% of the cost of constructing ballpark can be financed privately, Mayor is required to submit legislation to replace public financing with proposed private funds, provided that this does not violate the underlying obligations and economics of the agreement with Major League Baseball.
• Requires CFO to re-estimate land acquisition and infrastructure costs prior to May 15, 2005. If the re-estimate comes in above $165 million ($50 million over the CFO original estimate of $115 million), then the Southeast Waterfront site will be deemed financially unavailable. Mayor will be required to seek less costly site, subject to approval by the baseball franchise owners.
• Provides for a Construction Administration Agreement to implement risk management and reduce the liability and cost exposure of the Sports and Entertainment Commission as well as the District government. The baseball team will share insurance costs; be entitled only to insurance proceeds for compensatory damages owed due to force majeure; be subject to compensatory damages that can be offset by license fees for the use of RFK stadium during the first 12 months following a missed deadline and limited to $19 million with regard to the second 12 months following the missed deadline.