Friday, December 17, 2004
You can't get there from here - Micro Version
How this got all f*d up, Part II. From the deal agreement until now.
September 28th (or thereabouts)
MLB and representatives of DC including Mayor Williams and Councilman Evans agree conditionally to a plan on moving the Expos to the District. The key points of the plan heavily favor MLB. DC will find funding for a new stadium and the infrastructure necessary. They will also pay to renovate RFK for 3 years of baseball there prior to the stadiums opening. The plan outlines the stadium can only be built on a site in Southeast Washington DC, along the Anacostia River. The plan is initially priced at $435.2 million, part of the breakdown is $302 million for the park design and construction, $65 million for the land, $16.5 million for parking, $13 million for RFK renovations, and $40 million in financing. A cap is placed on spending of $500 million.
The financing of the deal calls for a rent (around $4 million dollars a year at start, then raising to 5.5 million) for the owners and taxes on baseball related sales occuring in stadium (estimated at $11-14 million). The bulk of the financing however comes from a gross reciepts tax on businesses who gross more than $3 million annually with a cap being put on the max amount paid by a company. This will cover $21-24 million a year. The total is roughly what needs to be paid yearly to payoff the bonds issued for the stadium.
The deal allows for the new owner of the franchise to own a team and a stadium at whatever price MLB decides, estimated at between $350 to $400 million. Also it places the stadium distant from the city of Baltimore and Angelos' "sphere of influence" hopefully limiting the costs it would take to pay him off.
While specifics of the negotiation are hard to come by it is certain that the DC Council, who must approve the deal by Dec 31st, was not included in the negotiation. Communication with members on whether they would approve the plan was at best limited and probably non-existant.
The deal is officially announced. 7 council members, Cropp, Brazil, Schwartz, Evans, Orange, Ambrose, and Allen, show up at the press conference potentially in support of baseball. However a couple, notably Cropp, note that they have not been able to take a look at the legislation and need to review it. The press is overwhlemingly supportive. Only a few dissenting voices notice how strongly the deal favors MLB and question the cost. Of the Council members not present, Fenty, Patterson, and Catania express opposition to the plan. Mayor Williams speaks of gathering unanimous support.
Fenty makes the first mention of alternate plans, suggesting a site close to RFK to save money. The plan is essentially ignored
The council gets its first official look at the deal. They'll have roughly a month to review this before it goes to committee. If approved in committee it would be voted on soon after that. The deadline for deal approval is Dec 31st. This is important since 3 pro-deal members have been voted out and will be replaced by three anti-deal members come January 1st.
The first large protest of the deal takes place outside of the council.
Tony Tavares and Kevin Ulhlich arrive in DC to work on the logistics of the move.
Mayor Williams, almost 2 weeks after the initial announcement, makes his first public appearence with regards to the stadium deal at an inner city church community meeting of 150 people. The tone of the meeting is unfavorable towards the plan. Generally they wonder why funds can go toward the stadium but not more pressing needs. This will become a reoccuring theme. This meeting will be the Mayor's only apparent lobbying effort in the time period from private meetings after the initial announcement on Sept 29th until the 7th of November.
Williams leaves for a pre-planned ambassadorial trip to Asia. He will return on the 25th
The idea is floated from the Mayor's office of a 20 million dollar fund available for community betterment.
It is around this time that we discover small business' trepidation of the plan. Small businesses do not like the fact there is a cap on the spending, essentially taxing small businesses at a greater rate than the largest businesses. All businesses are concerned that if there are cost overruns, the gross reciept tax will be raised to cover it, though this is not an impediment to large business support.
Over 170 people sign up to speak at a public council meeting about the deal on Oct 28th. The general tone of the people signing up is again negative toward the deal. The Mayor is one of the signees.
DC Chief Financial Officer Natwar Gandhi arrive at a new total for the deal of $530 million. The main changes come from an underestimation of the RFK renovation. Due to this, the cap of $500 million comes into question.
On the same day Mayor Williams raises the fund amount from 20 million to 400 million. The extra monies would be theoretically funded by taxes from the business that are projected to be built in the stadium district.
The public council meeting is a mess. Over 200 people speak in 16 hours and many are left waiting. The general feel of the meeting is again against the bill. Regardless, city officials are confident. They believe they have 8 votes in the Council now. This 8 is most likely made up of 6 present at the initial press conference plus Mendelson and Chavous. Shwartz now appears to have serious reservations and is consdered a no vote.
The legislation for the bill passes both the Committe of Finance and Reform and the Committee on Economic Development; 3-2 in both committees. In favor of it are Evans, Chavous, and Brazil (on both committees), Catania and Patterson vote no in one committe, Graham and Fenty the other. There are a few notable changes to the bill. The community fund is now raised to 450 million and is spelled out as follows: 2 million a year will be placed away until 2008. In 2008 (when the new stadium is scheduled to open) the money placed away will be used to create bonds up to $450 million. Taxes on stadium area business are expected to pay off these bonds. A $45 million pot for libraries will be added to $30 million already in the coffers for a community fund. The business that the gross receipt tax will be applied to are cut from those grossing $3mill up a year to those grossing at least $4million a year. The cap is raised to $550 million.
Cropp announces her intention to introduce her own plan. It involves using the RFK site. It is expected to cost in the nieghborhood of $400 million, a savings of roughly 20% from the original plan. The savings would be realized in a lowering of the gross reciept tax on businesses. Although she had previously talked about some concerns, this is the first time it has been indicated that Cropp would not support the legislation as originally written. Council members Mendelson, Catania, Patterson, and Schwartz show support for this bill, while Brazil, Ambrose, Evans, and Orange denounce it. Fenty is against them either.
Williams appears on TV and in chat supporting the legislation
Williams repeats that he has enough votes to pass the legislation as is. Assuming he counts Cropp as a loss, this would mean he still expects votes from Mendleson and Chavous.
Washington Post publishes survey results which state 69% of Washingtonians are opposed to the use of public funds fro the stadium. More than half are strongly opposed
Cropp removes the vote from the agenda tabling the vote for 3 weeks. She states now she wishes to use the time to find private finances. It is reported that Grus and Sununu may have approached Cropp with an idea to pay some of the costs for exclusive rights to build the stadium.
The deal now involves more than 70 million in personal entitlements to council members, including $45 million in libraries. Graham had mentioned previously that library funding is very important to him. This especially is seen as an attempt to curry votes.
The RICO case is thrown out. To be brief, the RICO case stated that Jeffrey Loria had defrauded co-owners in the Expos by purposely not fielding a competative team. This is an important hurdle for MLB to clear to be able to sell the Expos.
The team is officially named (by MLB) the Washington Nationals. Name and logos are revealed at a press conference.
Cropp announces that she will attempt to cap the spending at $630 million. She has not given up on finding private financing. At this point we have four estimates of cost. $440 million from the Mayor, $530 from the DC CFO, $584 from the DC auditor, and a worse case $614 million by the Washington Post.
The Council approves the legislation for vote at next session with a 6-4 vote with three abstentions (for: Evans, Orange, Ambrose, Allen Brazil, Chavous; against: Fenty, Graham, Catania, Schwartz; abstentions: Cropp, Mendelson, Patterson). The legislation undergoes several more changes. The cap is raised to $630 million.
Importantly, to limit costs the $45 million in funds for the libraries and a $30 communtiy fund are excised from the bill. This appears to lose what support Graham had seemed ready to give after getting the library funds. Several amendments are also passed allowing for examination of private financing and would force a move to another location if the CFO's new estimate of the building costs exceed $100 million more than his original estimate.
Williams states that he is willing to approach MLB about renegotiating parts of the deal, but only after it is approved by the Council. Baseball has no comment
MLB says it will not renegotiate any parts of the deal.
Owners approve moving the franchise to Washington by a vote of 29-1. Peter Angelos being the lone desenting vote. A deal has yet to be reached with Angelos and will not by the time of the Dec 14th vote. They agree on parts of the deal which includes a local revenue floor, a floor on sale price of the team, and a split of cable TV monies with the DC team.
The National Team Store opens
Support for the bill passing is again assumed. Baseball agrees to increase the number of days the city can use the stadium and presents the idea of giving free tickets to the cities youth as a way of sweetening the deal. Amendments are being considered including a lowering of the cap from 100 million to 20 million and another change of the gross reciept taxes.
The Council passes another revised version of the legislation by a vote of 7-6. For Evans, Orange, Ambrose, Allen Brazil, Chavous, Cropp. Against Fenty, Graham, Catania, Schwartz, Mendelson, Patterson. The revision this time is major, as an amendment is added that 50% of the financing for the stadium must come from private financing.
MLB reacts by saying the legislation as passed by the DC Council is "wholly unacceptble" and suspends operation of franchise until further notice. Uniform unveiling is postponed. While not explicitly stated, it is understood that DC has until the original Dec 31st deadline to approve the original legislation.