WASHINGTON - The District of Columbia would sell as much as $450 million in 30-year tax-exempt revenue bonds for a new baseball stadium should the city be awarded the MontrealExpos franchise, a district government official said yesterday.
The official's comments came yesterday as members of Major League Baseball's relocationcommittee were reportedly meeting in Milwaukee.
The district's current stadium financing proposal, drafted by the administration ofMayor Anthony Williams, is tentative and contingent on the city being awarded the MLBfranchise, the district official said.
The nation's capital and northern Virginia are considered to be the frontrunners in thecompetition to secure the money-losing National League team that plays a portion of itsgames each year in Puerto Rico. Officials in Virginia also plan to build a new ballparkif awarded the franchise and to sell tax-exempt bonds for construction costs.
The district's current plan calls for a stadium to be built at a cost of between $400million and $450 million, all of which would be raised through bond issuance. Of thattotal, land acquisition costs would be expected to eat up between $65 million and $75million, the official said.
Debt service on the bonds, some of which could be tax-increment financing bonds, wouldcost about $30 million per year. A proposed gross receipts tax on businesses whoseannual gross revenues exceed $3 million would generate about $24 million each year, andtaxes on sales, parking, and other revenue-generating activities at the stadium wouldgenerate between $8 million and $12 million per year. The in-stadium revenue figurewould depend on how well the baseball team fares financially, the official said.
In addition, the team's owner would pay about $5 million each year to rent the stadium,which would be owned by the district or a related entity, the official said.
The $5 million annual rental payment would comprise less than 10% of annual debt servicepayments, thus avoiding a conflict with the federal tax code's private-activity rules.
A location on the Anacostia River waterfront in southwest Washington has emerged as themost likely location for the new stadium, but whoever purchases the team would have someinput into the final location of the stadium, the official said.
The waterfront site is the heavy favorite but another site, Banneker Park near theNational Mall, is also still in contention, the official said. Another city official wasquoted in the Washington Post yesterday as saying that the park site has been ruled outbecause the novel proposal for building the facility over Interstate 395 was too costlyand would have taken too long to construct.
Any financing plan would have to be approved by the District Council before it couldtake effect. Although backers of the mayor's plan are confident that they have themajority support in the 13-member body needed to pass the plan, it is unclear if thatmajority will be in place when new members take office in January.
That is because political challengers who oppose the plan defeated three incumbentcouncil members in the Democratic primary elections Sept. 14, including a key Williamsally, Harold Brazil, who heads the council's economic development committee.
The city is so heavily Democratic that victory in the primary election all but assuresvictory in the general election in November. One of those challengers opposed to publicfinancing of the stadium is former mayor and municipal bond consultant Marion Barry, whowon the primary for Ward 8.
Meanwhile, a spokesman for Eric Price, deputy mayor for planning and economicdevelopment, said district officials have made great progress recently in their effortsto redevelop the Washington Gateway strip mall in the Fort Lincoln area.
"We're pretty close to hammering out a deal to bring a Costco [store] to the WashingtonGateway location," the spokesman, Chris Bender, said yesterday. If the project movesforward, tax-exempt bonds could be used to convert the site into a 372,000-square-footshopping center, he said.
