March 17, 2005

D.C. "private" plan more costly?

I don't know what I was thinking the other day when I implied that D.C.'s private-stadium-finance debates were almost over. No sooner had D.C. CFO Natwar Gandhi certified two plans to raise up-front cash for a Washington Nationals stadium by selling off future tax revenues to private entities than councilmembers were lambasting the deals are potentially more costly than just selling public bonds. Reports the Washington Post:

For example, under the Gates Group's plan, the city could get a $100 million upfront payment in exchange for $10.6 million per year for 30 years. That amounts to paying back the Gates Group at an interest rate of more than 7 percent. Council members said the city could get a far lower rate by going to Wall Street and issuing bonds, which is what administration officials originally recommended.

"It's always cheaper for the city to borrow money on its own," said council member Sharon Ambrose (D-Ward 6), who also objected to creating a parking district because it could cause parking problems for residents near the stadium.