D.C. proposes eminent domain for United stadium, money to come from cough, cough, hey look over there!

That didn’t take long: The D.C. council has a new plan for acquiring land for a D.C. United stadium, as promised by councilmember/mayor-elect Muriel Bowser just last week, and it’s a doozy: Instead of trading the city-owned Reeves Center office building for stadium land, the District will just up and take it by eminent domain:

The bill keeps much of a complex proposal to build a $300 million stadium on Buzzard Point in Southwest by Mayor Vincent C. Gray (D), but it removes a land swap with D.C. developer Akridge in which the District would have received cash and Buzzard Point land in exchange for the Reeves site.

With the changes, the use of eminent domain, which until now has been considered a Plan B option in stadium negotiations, becomes a very real possibility. After Mayor-elect Muriel E. Bowser is inaugurated in January, she could use eminent domain to take Akridge’s land on Buzzard Point at a price negotiated in court.

That’s much simpler, avoiding concerns that the District would be getting a lousy deal on the land swap, and that tearing down the Reeves Center would displace city jobs, and … it feels like something’s missing here. Let’s see, instead of the land swap, the city takes the land by eminent domain, and pays Akridge what a court determines (which could actually end up being more than the land owner agreed to in the land swap) — oh, hey, yeah, where does the money come from to pay Akridge now?

D.C. Council Chairman Phil Mendelson (D) said he expected both [committees] to hold votes Tuesday, but there are questions about how to pay for the stadium if the council agrees to retain the Reeves Center.

Um, yeah! Though at least if it keeps the Reeves Center, D.C. doesn’t have to find money to build a replacement for the Reeves Center, which it hadn’t yet begun to work on.

In terms of overall subsidies, then, this deal is pretty much exactly like the old one: D.C. would still be providing about $180 million in cash and tax breaks, just a chunk of the cash value will now come from “to be determined” instead of from handing over the Reeves Center. But it’s the new mayor’s $180 million subsidy plan now, instead of the old mayor’s, and in D.C., that’s often what makes the difference.

3 comments on “D.C. proposes eminent domain for United stadium, money to come from cough, cough, hey look over there!

  1. The city would never do this for DC United. This must be about bringing the NFL team back or maybe their IOC bid.

  2. This may be a better deal than the last one proposed, but it still could be horrific when looked at as an investment.

    Akridge probably will make out better than under the agreed land swap. I’m unfamiliar with Maryland law and history with eminent domain, but typically the subject of an expropriation is awarded FMV plus an amount for ‘inconvenience or other loss’ related to the property. Where I live that amount is typically at least 5% of the total fmv of the land and often 10%… and that’s assuming that the land does not currently generate any meaningful revenue for it’s owner.

    If the subject land happens to be farm land, for example, the annual income from that land can be recapitalized (and the cap rate and amortization period is always contentious…) and added to the total. The general notion being that, yes, the buyer can buy replacement farmland, but not that particular farmland with that history of production necessarily.

    It is at moments like these that I want someone to demand a study on what $90-120m in improvements to RFK could do.

    Years ago, when Kevin Payne ran DCU, I asked him what modifications to RFK could do for them “now” that they were no longer sharing with the Nats.

    His response? “There is no possible way to renovate RFK to meet our economic needs”.

    I wondered then as now whether that meant it was the stadium that was economically non-viable or the franchise?

  3. The United fans believe this to be true, that the eminent domain method of land acquisition will cost the city more than the trade negotiated with Akridge. I’m not so sure based on the negative reaction from Akridge, seems like they’d be happier with a solution that provides them with more money.

    It’s great that they got the unnecessary third party removed from the financing plan, but as posted above this change does not really impact the fact that the city would be spending a huge amount of money on a stadium that will never return near the amount of the initial investment.

    My idea on how to improve this deal would be for the city to pay for environmental clean up and infrastructure improvements and for the United to buy the land. To cut costs DCU could build a smaller stadium, designed for later expansion, maybe 10,000 seats plus standing room. Lower level RFK is rarely half full and they have extremely cheap tickets compared to other local sports teams. The United would have to triple ticket prices in order to bring them in line with the Caps/Redskins, more than offsetting any loss in total attendance numbers. DC giving the soccer stadium money while their fans enjoy cheap seats down near the action doesn’t seem fair to the other local sports fans.