A rendering of the proposed D.C. United stadium in Buzzard Point.
The D.C. Council on Tuesday gave its initial approval to an amended $300 million deal to build D.C. United a new stadium in Southwest D.C., providing the team and its supporters the hope that they will soon be able to abandon the crumbling RFK Stadium that has hosted games for 20 years.
After being approved earlier in the day during a committee vote, the deal easily sailed through the Council's penultimate session of the year on a unanimous vote. It will face a second — and final — vote on Dec. 16, before heading to Mayor Vincent Gray's desk for his signature.
Under the terms of the deal, the city will put $150 million towards land and infrastructure costs, as well as provide the team with a number of tax breaks. The team will put $150 million towards the construction of the stadium itself, which could open to the public in 2017 or 2018.
Changes to deal
The Council made a number of changes to the deal, though, notably by removing a land swap that would have seen D.C. trade away the Reeves Center at 14th and U Streets NW in exchange for a large parcel of land in the stadium's footprint. Instead, the bill will authorize the city to purchase the land — or take it through eminent domain.
It also removed a 10-year sales tax abatement for the team worth $7 million, though it left a 20-year property tax abatement in place worth some $43 million. In addition, it included a community benefits agreement calling on the city to resurrect a Circulator line for Mt. Vernon Square to the Southwest Waterfront, a program to connect area residents to stadium jobs and money to renovate a recreation center close to the stadium site.
The changes largely reflected discomfort among some legislators with trading away the Reeves Center, an iconic government building that opened in 1986. An independent analysis of the deal — which had been negotiated between Mayor Vincent Gray and the team — found that the city would lose $25 million in the swap, further cementing opposition to the proposal.
Mayor-elect Muriel Bowser, who during her mayoral campaign said she opposed the land swap, put her stamp on the deal on the week of Thanksgiving by removing the Reeves Center from consideration.
Gray, who negotiated the original deal with the team, said in a letter to legislators that even though the bill had changed, he still supported building a new stadium for the team.
"While the plan has changed from the version introduced earlier this year, the opportunity to move forward quickly with this stadium is something that the entire District wants," he wrote to legislators on Tuesday morning.
Disagreements over funding
But where there was far less agreement was over how the city's portion of the stadium deal will be paid for.
Under a plan presented by Council Chair Phil Mendelson, the city will borrow $62 million to purchase some of the needed parcels of land. As a means to secure that funding, Mendelson used a supplemental budget introduced by Gray earlier in the year.
His move met with stiff resistance from Gray's office, which said that the supplemental bill had been withdrawn in June (a claim that the Council's staff said was not true) and that it had planned on shifting around existing dollars to pay for the stadium (an idea Mendelson rejected).
It also promoted a legal standoff between lawyers for both sides, with the D.C. attorney general arguing that Mendelson's plan was not legally sufficient while the Council's counsel saying the attorney general's opinion was "misplaced."
Mendelson pressed the issue with his colleagues, saying that delaying the question of funding could push final consideration of the stadium bill into next year. "I don’t want this to go into next year, I want this funded now," he said.
Mendelson ultimately prevailed, with only Bowser — who will take over for Gray on Jan. 2 — voting against the funding mechanism.
After the funding dispute was settled, the stadium bill itself passed with no objections from legislators.
Concerns from critics
Still, critics said that it still left the city open to additional risks and costs, including the possibility that costs could exceed the $150 million cap the bill places on the city for land and infrastructure. Council member David Catania (I-At Large) said that it was likely that eminent domain would have to be used for some of the land — as it had with Nationals Park — potentially raising the overall cost for D.C. taxpayers.
Others said that the tax breaks that were left in — as well as the financing of the debt to cover land acquisition — would push the cost to the city closer to $200 million.
"It looks like on paper that the city has a cap at $150 million in what it will contribute, but the reality is that it’s not clear what will happen if the cost to get the land ready costs more than that. The team hasn’t agreed to pay those costs. If we reach $150 million, there’s going to be another debate should the city pay even more," said Ed Lazere, executive director of the D.C. Fiscal Policy Institute.
Despite those concerns, most legislators said the bill was the best means to get the team a new stadium and the city a means to promote economic development in Buzzard Point.
"I think we’ve got the right balance here," said Council Chairman Phil Mendelson on Tuesday. "We can push further, but I’m hesitant to do that. It’s already a better deal for the District."
Bowser said she was optimistic that the city could avoid the eminent domain process. "It is my strong desire that this government will be able to come to arrangement without proceeding to the eminent domain process," she said.
Jason Levien, a managing partner for D.C. United, said that the deal would benefit the city just as the construction of Nationals Park had.
"Certainly this deal is better for the city than the baseball stadium was. And I think the majority of District residents are glad the baseball stadium was built. And I think they are getting a much better deal here in terms of how much skin in the game the team has," he said.
Response from Gray
In a statement after the vote, Gray said that while he was happy with the result, he remained opposed to the funding mechanism that the Council had approved.
"I am pleased the Council voted today to move my soccer stadium proposal forward; however, the funding mechanism the Chairman advanced in a separate bill is clearly unlawful. As the Office of Attorney General has opined, and the Chief Financial Officer has agreed, that bill is void," he said.
Gray said that he would largely ignore the Council's funding plan and instead work with Bowser on an alternative plan to redirect existing dollars towards funding the stadium plan.
"Later this week, I will transmit to the Council for approval a list of reprogrammings — developed with the Mayor-elect and certified by the Chief Financial Officer — that will lawfully finance the stadium and allow construction to move forward," he said.
Late Tuesday night, D.C. Chief Financial Officer Jeffrey DeWitt ruled that Mendelson's funding gambit would not work, making it likely that Gray's plan would be used to pay for costs associated with the city's portion of the stadium deal.