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Monday, December 12, 2005

True Costs Of Stadium Go Beyond Budget - Washington DC National's Stadium May be Overbudget

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By David Nakamura
Washington Post Staff Writer
Sunday, December 11, 2005; Page C01

Mayor Anthony A. Williams and his top aides have quietly shifted major expenses for a baseball stadium complex out of the city-approved budget of $535 million in the past several months in hopes of persuading the public that the city will spend no more than the amount agreed upon a year ago.

But the District's fiscal commitment to the project has risen above that budget by at least $54 million And it isn't clear who will pay for up to $125 million in additional costs, which would raise the total to $714 million.

Public spending won't exceed $535 million, the mayor said. (Tetona Dunlap - Tetona Dunlap)
Although Williams (D) declared publicly last week that the project would not go over budget, the D.C. Council amended the stadium legislation last month to add $54 million in bond financing fees. The change was made at the request of D.C. Chief Financial Officer Natwar M. Gandhi, who called the amendment minor but acknowledged that it increased the city's commitment to $589 million.

"I feel thoroughly hoodwinked," said Jim Graham (D-Ward 1), who, like several other council members, said he was unaware that the action authorized the larger budget. "The council sat in blissful ignorance and approved technical amendments that expanded the budget by $50 million. . . . It's time for the council of the District of Columbia to say, 'Enough is enough.' "

From the time Williams announced the arrival of a Major League Baseball team in September 2004, his administration has understated the costs of the stadium project at several critical points, in part to help sell the deal to a skeptical council. As costs have risen in every major category for the project along the Anacostia River in Southeast Washington -- buying the land, building the stadium and paying for infrastructure -- the administration has removed project expenses and placed them in a separate category of costs that remain unfunded.

The approved budget plus the unfunded costs could reach $714 million, Gandhi told city officials last week in a private meeting.

The result is that with less than three months before the city had planned to break ground on the stadium, city leaders have rekindled a debate over the true public costs and the project remains in political limbo.

New uncertainty has prompted the council to explore building near Robert F. Kennedy Memorial Stadium to reduce costs. Tomorrow, the council expects to receive a more detailed study from Gandhi that will compare the Anacostia site to the RFK location.

In the meantime, concerns about rising costs will influence the council's vote next week on the city's stadium lease agreement, which baseball wants approved before it sells the Washington Nationals.

At a news conference last week, Williams again said, "The entire project will not cost more than $535 million."

He emphasized that bond financing fees should not be counted against the budget because they will not be covered by money from the general fund. Instead, the city will use revenue generated for the city by the Nationals' first season and by interest earned on the bonds next year before the bond money is spent on construction. He expects private developers and the federal government to cover expensive infrastructure upgrades to roads and a Metro station, expenses once covered by the $535 million stadium budget.

Most city leaders, however, remain focused on the dramatic cost increases of the past year.


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