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Nader Calls for DC Council Oversight on Stadium Project
October 24, 2005
Ralph Nader sent the following letter to all members of the DC Council illustrating problems with the publicly-subsidized baseball stadium project and its location, and outlining oversight points and questions that must be addressed publicly by the Council in the interest of the taxpaying residents of the District of Columbia.
The Honorable Linda W. Cropp, Chairman
Dear Ms. Cropp:
Where is the DC Council oversight on this runaway stadium gravy train? The recent maneuver to introduce as “technical” three amendments to last year’s rush-job stadium bill, and to block all other amendments, is the latest example of a Council which has fallen to its knees. As reported by the Washington Post on October 18, 2005 regarding the utilities tax amendment, “Wall Street wants a guarantee in the legislation that the utilities tax will bring in at least $12 million a year, enough to cover the ballpark debt service.” This amendment is a substantive change and anything but technical.
This latest obstruction aside, other aspects of the stadium project and its costs must be publicly addressed to ensure accountability if the DC Council has any desire to hold to the commitments and promises made when the deal was approved last December. From the beginning of this boondoggle, Major League Baseball has dictated terms for the stadium and the DC Council has failed to provide adequate oversight. Consequently, it’s no surprise that the deal is changing to further maximize the profits of Major League Baseball, at the added expense to the District and its residents.
Too few questions were asked and too few specific answers were provided during Council hearings on the stadium proposal last year. And under pressure from the salesmen -- in this case Major League Baseball, the DC Sports and Entertainment Commission (DCSEC) and Mayor Anthony Williams -- to immediately sign on the dotted line, the DC Council agreed to a bad deal for DC taxpayers. The stadium bill was hastily shoved through (passing with a slim 7-6 vote) as if the District had no elected city legislature to look out for its residents (69 percent of whom opposed public subsidies for a stadium). Like infomercial scams, stadium deals around the country are a great way for rip-off artists to prey on the powerless.
The Council’s reluctance in representing the peoples’ best interests through project oversight, after subordinating DC resident’s life necessities to the avarice of a private, for-profit, monopoly entertainment corporation is indefensible. Without ensuring accountability to the citizens of the District of Columbia, the Council is allowing the incompetent DCSEC and city planners who are in charge of the stadium project to do even more damage behind closed doors. This situation invites Major League Baseball freeloaders and wealthy, opportunistic developers to manipulate terms and further profit at the expense of the under-represented District taxpayers.
The Council’s committees generally responsible for oversight of the stadium project are chaired by members who unforgivably prioritized this corporate welfare development, against the will of the people, over investments in public education, public health, literacy, affordable housing and other long-suffering social services. Still, to sidestep accountability and avoid verifying costs for this continuously altered debacle is negligence and an insult to taxpaying residents.
Members of the Council who are skeptical of -- or opposed to -- the stadium project must not wait for the submissive committee chairs to raise the stadium issue and get answers. That day may never come, or purposely come at a time too late to protect the city from further pillaging.
In addition to answers regarding the stadium lease, the DC Council is responsible for oversight ensuring: (a) an extensive, accurate and accountable environmental analysis of the stadium site; (b) that promises regarding the stadium project are kept, including those involving the financing and lease, community benefits and fan amenities, public transportation, parking and other infrastructure, and that all contracts and documents -- including those for the lease -- are made public; (c) that land valuations for the preferred stadium site do not tie the value entirely to the existence of the stadium but to the entire massive redevelopment of the area; and (d) that the RFK Stadium site be seriously considered in the interest of obtaining the cost certainty that the current stadium site cannot provide.
Following, are just a few of the oversight points and questions that must be addressed publicly by the DC Council in the interest of the taxpaying residents of the District of Columbia:
1) When the Washington Redskins were attempting to site their new stadium next to RFK Stadium in 1993, the team’s owner Jack Kent Cooke sought to handle the matter privately, hiring private entities that deemed the site to be environmentally sound. As part of this procedure, the District along with the National Park Service (NPS) initially agreed to conduct a brief environmental assessment of the proposed site. However, community concern prompted both parties to undertake a more in-depth analysis by the NPS and the Environmental Protection Agency (EPA) in the form of an environmental impact statement. The new study yielded a finding of lead contamination at the site, apparently placed in the ground by the Army Corps of Engineers during dredging of the Anacostia River. Remediation of the contamination was estimated at $8 million to $12 million.
The current stadium process has even more need for extensive environmental analysis given its proximity to the waterfront and the varied uses of the land - including industrial uses - in its history, yet no such thorough analysis has been completed despite the precedent established during the Redskins’ stadium process. The people in charge of getting the stadium built may not be giving proper weight to the need to adequately examine the Anacostia waterfront site for environmental issues, especially since each remediation impacts the cost cap associated with the site.
The question isn’t if an in-depth and, most importantly, independent environmental impact study needs to be conducted as it was in 1993; the evidence is overwhelming that it must occur with all speed. The question is: Will the Council put the well-being of the citizens and the environment above the wishes of those who are continuing to fast-track the stadium in order to meet arbitrary time-lines and avoid cost caps and other overruns?
2) The DC Council needs to use its powers of oversight on the stadium to ensure that proposals that are completely contrary to the promises made by proponents of a subsidized stadium are disallowed. As reported by WTOP on September 29, 2005 the DCSEC is attempting to circumvent DC Council oversight on terms for the stadium lease. The Washington Examiner reported on October 14, 2005 that Major League Baseball is actually refusing to guarantee its stadium rent payments (an average of $6 million per year), the one and only revenue source promised that the team would have to provide every year they used the taxpayer-funded stadium. DCSEC Chairman Mark Touhey’s attempt to keep private some contracts and documents pertaining to the stadium must be confronted head-on to ensure accountability on the final lease and stadium legislation.
Questions must also be answered regarding the planned 60 percent cutback of the promised Navy Yard Metro expansion, under pressure to cut corners to secure a qualifying estimate for stadium project costs from the Chief Financial Officer (CFO). This would eliminate the Metro expansion needed to ensure adequate service to baseball fans and would lead to a transportation nightmare before and after games.
On October 6, 2005 the Washington Times reported that the DCSEC is now demanding above-ground parking for the stadium because below-ground parking would threaten the cost and time-line of the project and thereby threaten the workability of the current site. To do this, the DCSEC is attempting to change existing zoning laws against the wishes of the Anacostia Waterfront Corp. (AWC). In addition, unnamed “city officials” who insist on below-ground parking, “are considering removing parking entirely from the cost of the stadium and paying for it separately, using tax-increment financing or other revenue streams.” These issues demand scrutiny by the DC Council. All along, stadium project costs were all-inclusive, and parking was specifically designated as part of the project in every estimate.
Likewise, questions must be answered as to why, after years of promises as to superior fan-amenities in a new stadium, as opposed to those at RFK, plans now are to appease only the wealthiest few fans while most fans would likely have no better, if not worse, fan amenities at the new stadium than at the present RFK stadium.
As the Washington City Paper revealed in its October 7, 2005 cover story, Major League Baseball has prevailed over the DCSEC’s objections for a double-decked layer of luxury suites that will boost construction costs. An extra level can be built, explained DCSEC CEO Allen Lew, because of “certain changes that they made that reduce certain costs.” In addition, the DCSEC is now indulging Major League Baseball with a 7,500 square-foot conference center and a 10,000 square-foot lounge for “Diamond Club” members, both of which were -- among other perks -- rejected in a February 28, 2005 memo from the DCSEC explaining that it “cannot agree to changes that would result in an increase in the project budget.” Though the DCSEC again objected to the changes in a June 7 letter to the Nationals, months after final costs for the ballpark had been estimated by District Chief Financial Officer Natwar Gandhi, the changes have been implemented nonetheless with no proof that the budget would not change accordingly.
Such major changes warrant scrutiny over rising costs and what cuts (or additional changes) are being made to offset them. Thanks to the double-decked layer of luxury suites, fans are likely to have worse seats in the upper deck of the new stadium which would be 21 feet higher than those at RFK Stadium. And due to a reduction in the planned upper-deck seat widths for the new stadium, fans would be wedged into their 19-inch-wide seats as opposed to the seats at RFK which are 20-21 inches wide. “Planning documents,” according to the City Paper, even call for non-refrigerated drinking fountains in the new stadium’s public concourses, with only suite and club-seat fans enjoying cold drinking fountain water. Why are the taxpayers of DC paying the bills for all of this fan discomfort in a new stadium that would accommodate 5,000 fewer of them than RFK? These consumer-related changes are completely contrary to years of fan-amenity promises made by proponents of a subsidized stadium.
3) According to the September 25, 2005 Washington Post, the District’s Director of Development Stephen Green said that “in making assessments, contractors hired by the District considered property values in other areas in the city because sale prices for the land around the stadium site had skyrocketed after the plans were unveiled. ‘We looked at other locations where there was not as much speculation,’ he said.” Were this stadium being placed in an area that had no prospects for massive redevelopment without the stadium and would likely not see such development without the stadium, then the city's valuation approach would have been more legally justifiable and the results more legitimate.
However, the values of the properties in question would continue rising even without the stadium being placed there. Abandoned warehouses and industrial facilities near the current site are being replaced by massive office, retail, and residential projects in development speculation sparked by factors other than the stadium, the site of which was in question [as was the chance of getting a team in DC] and wasn't even announced until late last year. The size and scope of the SE Federal Center project combined with the Navy Yard and the new Department of Transportation (DOT) headquarters have been the driving force for the extensive redevelopment that has been occurring and growing at the area surrounding the current stadium site before the stadium plan was announced.
Contrary to the notion that the stadium can be held solely responsible for land valuation are the statements of officials from DC’s Office of Planning that accompanied the site evaluation studies conducted in 2002. Andy Altman, former director of the Office of Planning, said in these presentations that the area would be redeveloped and economically transformed “whether a ballpark is there or not,” and excerpts from the site evaluation study confirm this opinion. In light of Director Green’s recent comments, the Council must secure new valuations that do not tie the value entirely to the existence of the stadium but to the entire massive redevelopment and transformation of the area surrounding the current stadium site.
4) District CFO Natwar Gandhi developed an estimate for land acquisition, environmental remediation and infrastructure costs for the planned stadium site at the Anacostia waterfront well before accurate answers to those questions could be gathered. Because of the existing businesses and residences on the site in question, it was impossible to gauge if and when the city would be able to secure the properties -- and at what cost -- due to litigation concerning land values. It was also impossible to develop an accurate cost estimate for environmental remediation due to the extensive amount of analysis that would have to have been completed for this site with its proximity to the waterfront and its varied history of uses including industrial uses. The point of having a stadium estimate was to gauge if a stadium could be built at the site in time for the 2008 season at an acceptable cost level in keeping with the revenue projections for the stadium.
However, recent reports make it clear that almost every phase of the stadium planning is still incomplete, including the design of the stadium. In addition, reports such as those in the July 17, 2005 Washington Times suggest that “land acquisition issues, environmental remediation issues, political issues, [and] design issues” could cause the new stadium to not open until 2009 or even 2010. Most troubling is the report in the October 22, 2005 Washington Post stating that “the city is facing myriad issues with the remaining properties” and that “once the District begins eminent domain proceedings, the legal battles could drag on for months, even years, to determine how much the city will ultimately pay for the land.”
Given the promises of further lawsuits from landowners at the proposed site [Washington Post, September 25 and October 22, 2005] and the uncertainty that additional design issues and potential environmental issues present, no city official from the CFO to the head of the DCSEC [especially with its history of overspending and overruns] can verify the current cost estimate for the stadium, making the CFO’s estimate meaningless as a gauge for assessing the workability of the site.
In the interest of obtaining the cost certainty that the current site cannot provide, the DC Council must seriously consider the RFK Stadium site, where most of the challenges facing the current site have been addressed or do not exist and the temptation to cater to cost and time constraints is greatly alleviated.
As reported in the Washington Post on October 15, 2005: “The bidding groups have been informally polled by baseball officials about their willingness to buy the team if a stadium is built near RFK Stadium, rather than near South Capitol Street and the Navy Yard along the Anacostia River, according to sources familiar with the process who asked not to be named because of the sensitive nature of the negotiations.” Two (unnamed) potential ownership groups contacted by the Post “said they would still offer to pay $450 million for the team if the ballpark is constructed on another site.”
The significance of Major League Baseball treating the Council’s possible selection of the RFK site as a potential reality cannot be overemphasized. Despite the tough front put up by Baseball officials, this indication that the sale price for the Nationals would be unaffected if the RFK site is chosen should put to rest any worries that a change in the stadium site would be a deal-breaker for Major League Baseball. This evidence, added to the growing problems and costs at the current site, should make a site relocation the only viable option.
Furthermore, any concerns by the Council that a change in site for the stadium would adversely affect developers in the area near the current site should be eased. On October 16, 2005 the Washington Post reported that “Rockville-based developer Ron Cohen, who recently paid $51 million for a city block at Half and K streets SE, a few blocks north of the stadium site, said he didn't think developers would be harmed if the site changed. ‘The area has come into its own,’ he said. ‘Baseball gives it some identity, but with the Navy Yard down there, the [U.S. Department of Transportation], all the other office buildings along M Street and the waterfront redevelopment, they’re not feeding off of the stadium. They’re feeding off of commerce.’”
Instead, the Council should be concerned for the existing property owners of the current stadium site who stand to have their land taken from them by eminent domain. Such careless and needless disregard for the welfare of these people by the District government could be prevented by choosing the RFK site. It is an alternative that would also reduce costs to taxpayers, improve the timeline of the stadium project, offer public transit capable of handling game crowds, include known remediation cost, and even provide development opportunities.
If the DC Council cannot now find the motivation to publicly address the stadium project and its costs through oversight to ensure accountability, then shame on its members. The District can not benefit while its residents are taken advantage of in favor of autocratic corporate welfarists. This issue is not going to go away.
I look forward to your considered response, and to thorough DC Council oversight hearings on the stadium issue which are long overdue. You have always said you want the facts.
Sincerely,
Ralph Nader
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