D.C.: Pay no attention to that $700m behind the curtain

It’s tomorrow – well, today – you know what I mean – and as expected, details are starting to trickle in as to the new price tag for the planned Washington Nationals stadium. Without further ado:

  • The Washington Post cites “a source with knowledge of the discussions” as saying cost estimates have now reached $714 million, including land and infrastructure. D.C. CFO Natwar Gandhi, who is preparing the new cost study, would say only that “I can understand that because of Hurricane Katrina, costs have changed,” and “we hope that pretty soon we’ll have the numbers.”
  • The new figures include $41 million for underground parking, $20 million in Metro upgrades and $12 million in road improvements. (City officials continue to maintain that these costs will be paid for by someone else.) They also include $40 million in “contingencies,” double Gandhi’s original figure.
  • D.C. mayoral spokesperson Vince Morris retorted that the new numbers a “doomsday budget” that “does not reflect reality,” telling the Washington Times: “They threw everything but the kitchen sink into the cost.”

We also learn more today as to the “concessions” MLB will be getting from D.C. in exchange for its $20 million in cash – though what you learn depends on what paper you read. The Post:

In return, the city has agreed to give baseball one-third of parking revenue generated by a new stadium on non-game days, city officials said yesterday.

Over the course of the stadium’s life, expected to be 30 to 40 years, baseball would get back its $20 million, according to sources familiar with the lease negotiations.

And the Times:

D.C. officials negotiating a lease agreement for the ballpark said they have managed to secure $20 million from Major League Baseball (MLB) for a 1,225-space VIP parking lot at the stadium site, with the only concession being that the city will split revenue from those spaces with the league.

One city official, who spoke on the condition of anonymity because talks are ongoing, said it is hardly a concession at all, because VIP spaces are commonly provided to a team in exchange for rent.

I’m putting my money on the Post getting it right here, if only because it seems unlikely that one-third of revenues from a single 1,225-space parking lot could generate $20 million in present value. (Each space would have to bring in an average of about $12 a day on non-game days to produce this kind of cash … maybe “optimistic” is a better term than “unlikely.”)

In any case, whether this is common practice or not, it’s hardly a new source of stadium revenue, since D.C. could have just fronted the money itself for the parking lot and paid itself back with future revenues. (Yet another example of why stadium deals need to be evaluated based on total costs and benefits in the lease, not just up-front costs.) Stadium critics on the council were quick to jump on this point, with David Catania calling the MLB offer “outrageous … [MLB] offers to help with $20 million, but they’ll get that back and then some over time,” while Jim Graham called the offer “totally illusory. It doesn’t deceive any thinking person.”

5 comments on “D.C.: Pay no attention to that $700m behind the curtain

  1. Actually, if the parking lot is going to be right next to the Metro station, $12/day sounds just about right.

  2. *Especially* weekends.

    It’s seriously expensive to park in downtown D.C. Right now, there’d be no reason to park around the stadium, but given the development that seems to already be occuring down there, people will be looking for parking to go out.

  3. $12/day sounds pretty cheap to me, and pretty realistic too, depending on how close to the downtown area this garage will be. Here in Boston nobody blinks at having to pay upwards of $25/day to park, and during Sox games the lots aruond Fenway annoy the mayor by gouging you for $50.

  4. What I was questioning was whether the spots would average $12 a day in revenue – that means if they charge $12, all the spots would have to be full seven days a week, which seemed unlikely for a neighborhood that, at first at least, would mostly just have a stadium. I hadn’t considered the park-and-ride aspects, though, which I guess in D.C. could be a big issue.