Testimony Before the DC City Council Regarding Stadium Financing

Testimony of Ralph Nader
Before the Committees on Finance and Revenue, and Economic Development
District of Columbia City Council
November 28, 2005

Members of the Joint Committees, thank you for giving me the opportunity to present testimony. I would ask that my testimony be made part of the official record of this hearing.

Last year in the District, a mobilized citizenry emerged to challenge a proposal by Mayor Williams and the DC Council that would have subordinated the life necessities of District residents to a private, for-profit, monopoly entertainment corporation. District residents were heavily opposed, by an over two-to-one margin, to a publicly-subsidized stadium for Major League Baseball. Voters ended the representation on the Council of all three incumbent members up for re-election who supported spending tax dollars on a stadium, and replaced them with three who campaigned against it.

The lame-duck DC Council, however, defiantly approved the stadium scheme 7-6. It is now even more apparent that the concerns of its citizenry regarding the stadium deal have since proven legitimate, with inappropriate — if not illegal — changes made along the way.

Today the DC Council is dealing with one of the most costly stadiums ever. Adding insult to injury, the proposed stadium is a substandard, cut-rate facility. As the Washington Post put it in its November 22 editorial, “the publicly financed ballpark is going to cost more and provide fewer of the features necessary to create a vibrant entertainment district around the stadium. The question of the hour is this: Why build a stadium that because of escalating costs will not deliver the enhanced facility and improved infrastructure as promised?”

The stadium costs are so out of control, that city planners have just declared that some of the stadium costs no longer count as stadium costs. But as Councilmember David Catania has pointed out, such budget changes violate the law that authorized the stadium financing. As Mr. Catania explained to the Washington Post, infrastructure costs, “are plainly included. Any effort to place them outside those categories is a violation.” What manner of public policy is the DC Council following that allows such a clear breach of the law? It is only a matter of time before such behavior invites litigation.

No matter how the out-of-control stadium costs are sliced — or sliced-off — it is not a question anymore of whether stadium costs have broken the $535 million cap. Indeed, the costs have obliterated the cap. And the rising costs didn’t prevent the DC Sports and Entertainment Commission from giving-in to Major League Baseball’s demands for a host of luxury add-on items including an additional level of club seats, extra luxury suites, and a conference center. All of these changes were made after the Chief Financial Officer’s final stadium cost estimate.

And, unfortunately, some members of the DC Council have the nerve to try and maneuver themselves out of the responsibility of reviewing and voting on the stadium lease agreement? The lease is being negotiated by the same misguided DC Sports and Entertainment Commission and city planning officials who originally brought the District the stadium deal, with all of its corporate welfare handouts and cost underestimations that are squeezing this city dry. Major League Baseball is actually refusing to guarantee its stadium rent payments, the one and only revenue source promised that the team would have to provide every year they used the taxpayer-funded stadium. The DC Council should be up in arms over this, as well as over the attempt to circumvent DC Council oversight on terms for the stadium lease by the DC Sports and Entertainment Commission and other city officials, as reported by WTOP and the Washington Times.

Following the recent legal opinion by DC Attorney General Robert Spagnoletti over the perceived autonomy of quasi-governmental organizations like the DC Sports and Entertainment Commission, the DC Council has no choice but to review and vote on the stadium lease. With this ruling — which asserts that these organizations are part of DC government and subject to the laws and regulations that govern other government agencies — the DC Council can no longer allow the DC Sports and Entertainment Commission and other quasi-governmental organizations, to operate in secrecy and negotiate questionable business deals that would never survive prudent public scrutiny.

In addition to addressing the stadium lease, the DC Council must finally take action regarding the poor choice of site for the stadium. Already well beyond the cost cap, the current stadium site cannot provide this city the cost certainty which must be obtained by the DC Council. The insurmountable problems — and there are surely more to uncover — facing the current site could be prevented by choosing the RFK Stadium site, where most of the challenges facing the current site have been addressed or do not exist.

RFK is an alternative that would reduce costs to taxpayers, improve the timeline of the stadium project, offer public transit capable of handling game crowds, prevent the requirement for eminent domain land takings, and even provide development opportunities. Additionally, an environmental impact statement has already been conducted for the RFK site, unlike the current site where plans are for no such thorough analysis to be completed despite its proximity to the waterfront and the varied uses of the land — including industrial uses — in its history.

Even better, as the Washington Post suggested in its November 22 editorial, the District and Major League Baseball, “could reconsider their agreement to leave Robert F. Kennedy Memorial Stadium after the next two seasons and devote their time, talents and treasury into making that ballpark and Washington landmark a permanent home for the Nationals.”

It has been reported that the New York bond issuers need certainty enveloping the stadium deal. As the weeks go by, uncertainties will begin to emerge that the sugar-coated contract with the DC government will no longer be able to obscure.

I’d like to thank the Joint Committees again for the opportunity to testify today.

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