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Everything You Need To Know About The D.C. United Stadium Deal

A rendering of the proposed D.C. United stadium at Buzzard Point in Southwest D.C.
D.C. United
A rendering of the proposed D.C. United stadium at Buzzard Point in Southwest D.C.

In late May, Mayor Vincent Gray sent the D.C. Council a package of details and legislation needed for the construction of a proposed 20,000-seat stadium for D.C. United at Buzzard Point in Southwest D.C.

The broad outline of the deal were already known: D.C. would pay $150 million towards obtaining the land and upgrading the infrastructure, while the team would pay $150 million to build the stadium. A central element of the deal is a land swap between D.C. and one of the landowners at the stadium site — in exchange for the needed parcels of land, the landowner would get the Reeves Center at 14th and U streets NW.

Now that the Council has the deal in hand, it has to debate and approve, amend or reject it. A first hearing has been set for June 26 (the day of a World Cup match between the U.S. and Germany, a fact that has angered soccer fans), and Council Chair Phil Mendelson's office says other hearings are likely. A vote on the deal isn't expected until the fall at the earliest.

We read the hundreds of pages that make up the specifics of the deal; here are some of the highlights:

  • The whole deal lasts 30 years, with two five-year extensions available. After that, D.C. becomes the sole owner of the stadium.
  • The deal has a number of deadlines. D.C. has to have all the land by March 31, 2015, have demolished existing structures by March 1, 2016 and have finished infrastructure work by Dec. 31, 2016. On the team's side, substantial design drawings are required by March 1, 2016, a construction contract needs to be signed by July 1, 2016, and the stadium needs to be substantially complete by March 1, 2018.
  • Along with deadlines are consequences for failing to meet them. If D.C. doesn't finish land and infrastructure work by March 2016, it agrees to waive the fees that the team pays to use RFK Stadium until all the work is done. If the work still isn't done by December of that year, the team can pull out of the deal. If the team doesn't have the stadium done by March 2021, D.C. can pull out of the deal and seek a $5 million payment.
  • Those deadlines are later than what was originally hoped for. A document attached to the deal contains some of the deadlines that D.C. and the team had originally hoped for but likely won't meet: November 2014 for control of all the land, a finalized construction contract by November 2015 and a completed stadium by March 2017. Per the language in the agreement itself, most deadlines have been pushed by between six months and a year.
  • The team's projected budget for the stadium is $150,657,450, the majority of which — $109 million — is for actual construction.
  • D.C. will obtain a large part of the stadium's land through a swap with Akridge, a developer that owns a large parcel in the stadium footprint. In exchange for that parcel, Akridge will get the Reeves Center, a municipal building at 14th and U streets NW. The deal assesses the stadium parcel at $21 million and the Reeves Center at $55 million, so Akridge will pay D.C. $34.5 million to make up the difference. The city's Office of Tax and Revenue assessed the land and building at much more, $128 million, for 2015. (D.C. officials say that three appraisers pegged the value of the land at $55 million, while OTR multiplied the building's square footage by what office space goes for in the area. They say the building is obsolete, so the total value would be much lower than what OTR assessed.)
  • All told, the deal caps that amount D.C. can spend on land to $90 million, though infrastructure costs are not capped.
  • Both property and sales taxes will be phased in over the life of the stadium. Within the first five years that the team uses it, property taxes on the assessed value of the land will be set at zero. After that, they progressively increase: years 6-10 (25 percent), years 11-15 (50 percent), years 16-20 (75 percent), years 21-30 (100 percent). As for sales taxes, the team will pay none for the first five years, 50 percent between years 6-10, and 100 percent thereafter.
  • In addition to a phase-in of sales and property taxes, starting in the 11th year of the team's use of the stadium the city will get $2 for every ticket sold. That amount will be indexed to inflation starting in the 21st year.
  • According to a letter from Mayor Vincent Gray, the stadium is expected to generate $72 million in sales and property taxes over 30 years and bring $151 million in new revenue to the city. As part of the 2015 budget, the Council is putting $200,000 aside for an economic impact study on the stadium.
  • The stadium's construction will be done in part, though not in whole, by D.C. residents. The deal sets a number of conditions on hiring of D.C. residents or approved firms — 51 percent of skilled laborer hours, for one, will be completed by residents, as will 70 percent of common laborer hours.
  • A Project Labor Agreement will set requirements for the amount of work that has to be done by union laborers. It also contains a no-strike clause.
  • The deal says D.C. and the team can work together on gameday parking options, but it does not commit the city to providing any parking lots that can be used for fans. The deal also calls on D.C. to speed development a nine-mile North-South streetcar line that would stretch from Buzzard Point to Takoma.
  • Once the stadium is done, 51 percent of the jobs within — ticket-takers, concession operators, etc. — shall be reserved for D.C. residents. Additionally, 35 percent of contracts for stadium services will go to Certified Business Enterprises, or businesses that met certain conditions (such as hiring D.C. residents, being located in the city, etc.)
  • The stadium will be made available at least three times a year to community events, such as DCPS soccer finals.
  • The team will pay annual rent to D.C. for use of the stadium. The rent? $1.
  • The deal has a no-relocation agreement, which would force D.C. United to stay in the city for 30 years. The team would also have to maintain team offices and practice facilities here.

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