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

Posted on: Friday, 27 January 2006, 19:08 CST

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.

Source: REUTERS

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