Sunday, January 29, 2006

MLB's Gonna Wash That Lease Right Off Of Their Hands

I'm still not quite sure what to make of Friday afternoon's news that MLB and the mayor had hammered out another lease agreement. The various reports on the issue answer some of the questions, but leave some hanging out, too.

It does seem, though, that what's happened is that MLB has divorced itself from the actual funding. Friday's developments, which don't actually lay out a financing agreement basically lays out the maximum that MLB is willing to do. They've shifted responsibility of the construction to the city, and removed themselves from the negotiations. It's now up to Mayor Tony, Linda Cropp, and the rest of the Council to hash it out amongst themselves.

By not including the financing, it seems a certainty that the city will agree to one of those total-cost contracts with one of the construction companies. DC will turn the keys over to Clark (to name one) and let them bear the burden of overruns on their own.

The Washington Times has the most thorough review of the particulars. It appears that MLB did throw money into the pot, but it's coming, it appears, at a cost of development rights. I'm still not clear on whether MLB getting a share of the development rights is new, or if it's an amendment from before. Anyone know?

The Times article also quotes Cropp as saying that she thinks there's enough to get the lease past the council. We'll know by Friday.

  • I'll also link to the Mayor's press release, if only for this paragraph, which is the most concise statement of revenue that I've seen. Take it for what it's worth.
    Under the deal, funds to pay for the stadium will come from four separate outside sources. 1. MLB will make rent payments to the District for the next 30 years, worth $92 million. 2. Fees on tickets, hotdogs and t-shirts sold at the ballpark will generate $369 million over 30 years – a fee system that makes sure that only people who attend games will pay for the ballpark. 3. The ballpark fee, which affects fewer than 2,000 businesses in the District, will raise $215 million over the 30-year period. 4. And finally, utility taxes assessed primarily on the federal government will raise another $215 million. This combined sum, $891 million, guarantees a revenue stream that will allow the District to build a beautiful ballpark, sparking a revitalization of an underdeveloped area of the District and giving people a new entertainment destination without ever having to tap into general fund revenue.

  • I should also mention that the Post article says that Nat Gahndi thinks that Wall Street won't like the lease because a reserve account was deleted from this version of the lease. If that truly is a problem, we'll find out more this week.

  • 2 Comments:

    Post a Comment

    << Home