Washington, D.C., baseball reach new stadium deal

By David Lawder

WASHINGTON (Reuters) – Washington, D.C., struck a deal with
Major League Baseball on Friday for further changes to a new
stadium lease, clearing the way for a crucial city council vote
on the $667 million project.

Mayor Anthony Williams, who has been struggling to win
council support for the Washington Nationals stadium in the
face of rising costs, signed the agreement with league
president Bob DuPuy and mediator Dennis Archer, the former
mayor of Detroit.

The changes include a cap on total stadium construction
costs and cede to the District of Columbia some development
rights on part of the ballpark property, located south of the
U.S. Capitol building on the Anacostia River.

Williams spokesman Vincent Morris said the changes will
result in “tens of millions of dollars” in savings for the
city, although he declined to detail them.

The deal met a Friday deadline for the lease to be
considered at the council’s February 7 meeting, but any further
delays now threaten the stadium’s April 2008 completion date.

Williams withdrew the previous lease from council
consideration in December after council members said they
wanted guarantees that the city would not have to pay for any
cost overruns.

“We forced Major League Baseball to come up with additional
concessions, we leveraged millions of dollars in new developer
money from the private sector and we made headway in talks with
the White House about helping to pay for needed Metro
upgrades,” Williams said in a statement.

A Major League Baseball spokesman could not immediately be
reached.

The city has agreed to sell $535 million in tax-exempt and
taxable bonds to help finance the proposed stadium, to be built
south of the U.S. Capitol building on the Anacostia River, but
it cannot proceed with any issuance until the lease is
approved.

According to a D.C. Sports and Entertainment Commission
memorandum obtained by Reuters, the changes to a private
portion of the ballpark financing would free the city from
funding a reserve account. It had previously agreed to fund a
$60 million reserve to boost the ratings on $256 million of
bonds to be sold privately to Deutsche Bank.

“The District has now determined not to proceed with that
private financing,” the memo said. However, a Deutsche Bank
spokesman said the bank expects to remain a key part of the
financing package.

“They’re still in the deal,” added Maryann Young, a
spokeswoman for D.C. Chief Financial Officer Natwar Gandhi.

Williams said the project, which Gandhi previously
estimated at $667 million, would be paid for from team rent,
valued at $92 million over 30 years, taxes on tickets and
concessions, valued at $369 million over 30 years, a gross
receipts tax on larger businesses, and utility taxes, worth
$215 million over 30 years.