DC Council Urged to ‘Stop the Hemorrhaging’ of the Stadium Project

The stadium project that was initially touted as costing $200 million in public funds,[1] and then $325 million, and then $440 million, and then supposedly capped at $611 million, is now becoming an ever larger taxpayer burden. Incoming Council Chair Vincent Gray agreed last year when it was suggested that the project might hit the billion-dollar mark, and it now appears that conjecture might turn to reality — unless the Council acts now to stop the hemorrhaging.

Despite the sunk costs at the new site, having the team play at RFK stadium remains the best option for the District. Upgrading RFK would still be cheaper than concluding the new stadium; and the infrastructure fiascos at the new site could be avoided if the team were to continue playing at RFK. RFK is an alternative that provides more cost certainty to taxpayers, offers driving access, parking and public transit already capable of handling game crowds, and supplies a manageable timeline for the project, and even provides development opportunities. Moreover, the new stadium is now actually standing in the way of development at the S. Capitol St. site.

Assuming, however, the Council mistakenly remains committed to the S. Capitol St. site for the new stadium, there are a series of steps that should be taken to mitigate the damage.

1. The DC Council should acknowledge that a bait-and-switch was pulled on the citizenry. The Council approved the deal on the grounds that $611 million was going to cap the District’s investment in the deal. In tragic fact, the contract provides for open-ended liability for the District, which, with minor exceptions, is obligated to pick up the expense of the project, whatever it costs. The political posturing of the cap means nothing against the legal obligation of the lease.

2. The Council must clarify for itself and the citizenry what if any cost overruns the project is incurring. Council Member David Catania says that cost overruns already exceed $100 million. The Council should request that DC Auditor Deborah Nichols immediately assess what cost overruns have already occurred, and what additional overruns are now foreseeable, and publish her audit.

3. The Council, with the assistance of Ms. Nichols, should assess the reasons for any cost overruns. The contract with the team imposes penalties on the District for failing to meet the deadline, but the penalties are bounded. It is quite possible that existing or future overrun costs will exceed the District’s liability for failing to meet the deadline. If so, it makes sense to slow down, and save money.

4. The Council must not rush to lavish more money on this project by paying for parking facilities or subsidizing a developer to do so. With the collapse of the Miller development proposal (which, incidentally, contained hidden costs, because the gifted land and development rights were not characterized as an expense) it now appears that the Mayor plans to ask the Council for $75 million in additional funding for parking. Under the terms of the contract, the District is required to provide only 1,225 parking spots. It should not subsidize developers to construct more, nor spend more public funds to build parking facilities. The team is being handed a publicly funded stadium, making only the slightest contribution to its construction. If new monies are needed for parking, the team owners should provide them.

5. Under no circumstances should the Council agree to “emergency” legislation to authorize new funding for anything connected to the project. That the Mayor has been out of the country and unengaged with the issue does not make it an “emergency” when he returns. The claim of urgency is simply an excuse to avoid hearings and a full public debate over the terms of any new funding. Needlessly considering major funding legislation with little or no lead time is not a useful approach for a considered deliberation of the available options. The offer from Monument Realty that would provide most of the needed parking for a two-year period deserves consideration, as do other possibilities.[2]

6. The Washington Post reports that the Lerners, the team owners, have made intricate demands for stadium design changes. The Sports and Entertainment Commission should publish all of these requested changes, and their estimated costs. Under no circumstances should the public be left with the bill for last-minute changes demanded by the private tenant.

It is clear now that the project is an ever-worsening debacle, with a one-sided lease that will impose escalating costs on the funder (the District) with little or no additional obligations on the beneficiary (the team). The stadium deal that was originally promised to cost $200 million is speeding in the direction of $1 billion — with control of the stadium handed over and benefits to be reaped by private owners. The Council needs to pause and reflect on the stadium deal and then get this publicly funded project back under public control.

Two years ago this month, DC residents peaceably demonstrated against this stadium giveaway. The Washington Post quoted Mayor Williams who described such public concern over a (then) $440 million deal as “populist grandstanding.” It’s way overdue for the Council to put its foot down on this disrespect of taxpayers and disregard for more important priorities for tax dollars than increasing the profits of commercial sports companies.

Sincerely,

Jim Bouton, former Yankee pitcher and author of Ball Four
Egremont, MA

Shawn McCarthy, director of League of Fans
Washington, DC

—–

[1] Spencer S. Hsu and Mark Asher, “District Pledges To Finance Half Of New Stadium,” The Washington Post, December 20, 2001. See also Mark Asher and Craig Timberg, City’s Share For Stadium Increasing; Mayor Says D.C.’s Cost Could Hit $300 Million,” The Washington Post, December 22, 2002 (“The mayor’s suggestion that a city government financing package might reach $300 million surprised members of the D.C. Council who had been working under the assumption that the limit was $200 million. That’s the amount Williams pledged in a letter to baseball officials in November 2000.”)

[2] Marc Fisher, “For the Stadium, It’s Decision Time; for the Mayor, It’s the Offseason,” Washington Post, October 12, 2006