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Councilman wants overruns to be paid by new owners

10/2/2004 - Montreal Expos

WASHINGTON -- The group that buys the Montreal Expos will
get to keep all concession, advertising and parking money generated
from baseball games in the 41,000-seat ballpark that Washington
plans to build, along with revenue from the sale of naming rights.

The documents outlining Washington's $435.2 million agreement
with the Expos were made public Friday, two days after they were
signed. The city agreed to build the ballpark for $300.7 million
and spend $65 million to acquire the land along the Anacostia River
in the southeast section. In addition, Washington will spend $16.5
million to construct a minimum 1,100 regular parking spaces and $40
million to finance the project.

City Council chairman Linda Cropp introduced legislation Friday
to have the District of Columbia issue up to $500 million in bonds
to fund the project.

Councilman Adrian Fenty sent a letter Friday to the District of
Columbia Auditor, requesting an independent cost and budget
analysis of the stadium. It also asks for a review of the financing
plan for renovation of RFK Stadium, where the team would play for
three seasons starting April 15, the home opener against Arizona.

Fenty plans to introduce an amendment requiring cost overruns be
born by the team owners.

"The notion that this is going to cost $440 million when this
is all finished is laughable. This will cost at least $600 million
by inflation and cost overruns that normally are associated with
big projects like this," Fenty predicted.

Mayor Anthony A. Williams said such criticism is just "talk."

"We took a very conservative construction expert to do an
analysis. We added to that, and then we put a contingency reserve
on top of that," Williams said Friday.

Williams has said rent on the stadium, and taxes on certain
businesses and on stadium tickets and merchandise, would cover debt
service on the 30-year bonds.

The mayor also contends that development around a new stadium
will create jobs and improve facilities in the rundown
neighborhood. But Fenty wants the auditor to check out those claims
too. He points to Yankee Stadium in New York as an example of
neighborhood hopes lost.

"That stadium thrives. People come to the baseball games, then
they go right home and they never invest any money in the Bronx,"
Fenty said. "It sits right in the middle of a very rough
neighborhood."

Fenty also wants a comparison of recent stadium deals with other
cities. The auditor's office did not return a phone call for
comment.

"It is not the role of the D.C. Auditor to look at legislation.
It is the job of the City Council," Williams said in a statement.

The agreement calls for the ballpark to have 66 luxury suites
containing 1,080 seats, 2,000 club seats, a 500-seat club
restaurant and a 15,000-square foot picnic area.

The team will pay $5.3 million per season in rent at RFK. At the
new ballpark, the first year's rent will be $3.5 million, rising to
$3.75 million the second year, $4 million the third, $4.5 million
the fourth, $5 million the fifth and $5.5 million the sixth.

After that, the rent will be $10,000 less than 102 percent of
the prior year's rent. The rent won't increase in any year
following a season in which the team's attendance was less than the
major league median over three years.

In addition, Washington gets $1 for the equivalent of each
full-price ticket sold per year above 2.5 million.

The bulk of the costs will be covered by an additional gross
receipts tax on businesses that gross more than $3 million
annually. In addition, the legislation calls for a 10 percent tax
on tickets sold to baseball games at RFK Stadium and all events at
the new ballpark, a 10 percent tax on sales at the ballpark, a 12
percent tax on parking at the ballpark and at baseball games at RFK
Stadium.

The agreement requires the council to act by Dec. 31. That
deadline has a secondary importance because three council members
who support baseball are expected to be replaced in January by
three who aren't sold on the idea. They include former Mayor Marion
Barry.