Washington DC refuses to foot the bill for greedy MLB Franchise

[Sandpiper]

The DC Nationals/Montreal Expos have shut down business operations in DC because the DC City Council has insisted that the team pay raise $140 million dollars toward the construction of a new $600 million dollar stadium.

Good for them! This is what every city should do when a professional sports franchise tries to shake them down for tax dollars.

http://sports.espn.go.com/mlb/columns/story?columnist=caple_jim&id=1947248

[nixonwasbetterthanW]

1. Caple is fast and loose with the truth ...

He makes a comparison to Bush and the Texas Rangers, but there's a huge difference:

<http://www.topplebush.com/article11_busdeal.shtml>

(snip)

Between the sales-tax revenue, state tax exemptions and other financial incentives, Texas taxpayers handed the privately owned Rangers more than $200 million in public subsidies. Taxpayers didn't get a return from the stadium's surging new revenues, either. The profits went almost exclusively to the team's already wealthy owners.

The stadium's lease is a case in point. Unlike an apartment tenant, the rent that the team's owners pay is applied toward purchasing the stadium. The maximum yearly rent and maintenence fees for the Rangers are $5 million; the total purchase price for the Ballpark at Arlington is $60 million. Thus, after 12 years the owners will have bought the stadium for less than half of what taxpayers spent on it.

(snip)



So, whatever else might be said, the fact is that the City of Washington would own 100% equity in the new stadium. MLB, unlike in the Rangers case, will have no rights to ownership of the stadium after 10, 20 or even 50 years. D.C. can produce revenue with other events at the stadium. Linda Cropp and the other opponents have never addressed this compelling component of the finance package.

[AP]

4. Maybe ownership of the venue didn't justify the cost. Maybe there are...

...plenty of other venues in and around the city and this one would have been cannibalizing a marketplace that doesn't justify one more venue.

What if the baseball team left after 7 years? What else are you going to do in that stadium? Play Georgetown home baseball games?

[theboss]

7. That's not the point.

First of all, it's almost inconceivable that a baseball team would fail in this current market.

But that's not the real issue. The real issue is there were two years to insert this clause into the agreement. Once Williams and MLB agreed to the deal, that was that. MLB signed the documents and moved the team. You can't suddenly change the rules on them now. It's essentially a breach of contract.

[theboss]

2. I don't agree with public financing, but this was a bullshit move

First of all, I don't think DC should shoulder 100 percent of the responsibility for building a stadium that could cost $700 Million when all is said and done.

However, DC negotiated with MLB for two years and an agreement was in place. Cropp was in favor of the agreement and even attended the welcoming rally at Union Station. Then, at literally the 11th hour, she inserts a poison pill into the entire legislation, essentially killing the dream of baseball in DC for at least another 30 years.

If she was going to kill this deal, she should have done so months if not years ago. Now, no business in its right mind is ever going to work with the DC council to achieve anything, because God only knows what they are going to do to you at the last minute.

This may win her the mayor's office, but good luck in any public-private projects in the future. You simply don't negotiate this way.

[AP]

3. But if this was a money loser for the city, should they have done it ...

...anyway?

I think it's a better lesson for the very few businesses which require the city to foot the bill for some aspect of their enterprise that the city coucil is going to protect taxpayers from taking it in the ass so that a private business can increase its profit margins.

[theboss]

5. I just view it as more grandstanding from Cropp

The long-standing legacy of Marion Barry on district politics is that you can set bad policy, you can appoint your corrupt friends to all kinds of important positions, you can ignore city services, you can have disastrous schools, you can have horrifying crime rates, and you can create a poisonous environment for business (hell, you can even be a crackhead)......but as along as you showboat once in a while and take a stand against some sort of "powerful" interest, you can be mayor for life. Cropp wants to be mayor, and MLB is her whipping boy. She see what happened to Brazile, she sees the return of Barry, and she knows that her constituents are feeling more and more ignored by Williams, who they see as a mouthpiece for white business owners. So, she decided to make the biggest public splash she could.

The real issue here is the one that affects everything in DC: race. 2/3 of DC residents do not support public financing of the ballpark, and most of that 2/3 is probably residents east of 14th Street. And I think the logic behind this is why use city money to build a stadium that is going to be a playground for rich whites from NW and white suburbanites. I am not saying this is an illegimate argument. It's actually a pretty damned good argument. (Though I do believe that an equally good argument can be made that bringing 30,000 suburbanites to spend money on the Anacostia waterfront 81 times a year is a good thing for a long-ignored part of the city).

The problem with scoring a "victory" like this is twofold. One, it's not going to make the schools, hospitals, or roads any better because the money that was going to be used from the stadium was never in the general fund to begin with. It was going to come from new sources of revenue. Two, it creates a perception that DC is reverting back to the 70s and 80s where you would have to be insane to open any large businesss there or get involved in any large government project.

Williams has a lot of faults. He is standoffish. He doesn't seem to care about social services. He is far too beholden to NW residents. But he has created a situation where DC almost functions like a real city now. This is a step back to the Barry era.

[AP]

6. Perhaps the city should just buy a team.

That way a much bigger chunk of the the money made during those 81 games will be returned back to the city and the citizens rather than being paid out as dividends taxed at 15% to the very rich people who own the team.

What were the new sources of revenue that were going to finance the construction?

[theboss]

8. The team would cost $350 million and you still need to build the stadium

The revenue plan was:

Under the financing plan described by District officials, the city would sell about $440 million in bonds; the proceeds of the bond sale would pay for stadium construction, land acquisition and other improvements.

To pay back the bonds, the District would rely mainly on a tax on the District's big businesses and new and existing sales taxes within the stadium. Less than 18 percent of the money to pay for the District's stadium would come from the team -- through rent payments -- over the first 20 years of the deal, according to projections.

The real problem with forcing the ownership to pay for the stadium is the simple fact that there is no owner. Major League Baseball currently owns the team. Without a stadium deal in place, no one in their right mind would buy the Expos/Nationals/Traveling All Stars.