Brinksmanship in DC

Two weeks ago, MLB was selling Nationals caps out of a trailer in an RFK parking lot. All systems seemed a go for baseball in our nation's capital. MLB and Washington mayor Tony Williams had reached an agreement that would have DC build a new stadium for the Nats on the banks of the Anacostia, an area in need of a development push. Cost? Williams said $440 million. The city budget office put it closer to $580. Payment method: bonds floated on a tax on DC business. Cut to last night.

After a marathon session, the DC City Council voted to amend Williams's agreement with MLB. The issue? Ostensibly, a better deal for DC. Instead of the city paying for the entire package, private financing would now be required for 50 percent of the presumed $280 million stadium construction bill (land acquisition and various other development costs push the estimates to the $440/$580 figures). Of course, the Councilwoman pushing the amendment is a Democrat looking to face Williams in a mayoral race. So here we have some motivation beyond the purely economic. And of course Marion Barry, the fanner of all flames, had to get involved. The papers were not kind to the DC politicians this morning.

Tom Boswell: Linda W. Cropp blew to smithereens the deal that MLB thought it had in place with Washington to build a ballpark on the Anacostia waterfront. With that single blow, which leaves baseball no alternatives, the return of major league baseball to the nation's capital is now dead.

Mark Fisher: Linda Cropp's late-night bombshell eviscerating the deal with Major League Baseball immediately restores Washington's status as America's laughingstock....Mayor Anthony A. Williams must also be seen as having gutted his own deal.

Michael Wilbon: The time for Linda Cropp to ask for amendments and show the city how tough (not to mention ambitious) she is was before Mayor Anthony A. Williams and other city officials agreed to do it baseball's way.

The Mayor was no more optimistic, calling the deal practically "dead."

Today's response from MLB? Not surprisingly, take it or leave it. DC has until Dec. 31 to come up with an acceptable plan to finance the stadium or MLB's going to start shopping the team around. Tough talk.

So who's right here? What's going to happen? The scribes (and politicians) screaming doom for baseball in DC are getting ahead of themselves. Does MLB really want to leave DC? They've already picked up from Montreal, and they're basically settled in the District, which is their best market. As usual, MLB is just trying to wring as much as it can out of the public coffers, and why not?

And those DC politicians? Williams should be embarassed for giving away the store in the first place, and not getting his Council ducks lined up later on. Those who would find a flag-bearer for the anti-public-financing movement in Linda Cropp, who is being portrayed as some kind of right-thinking public defender, are misguided. Cropp's manipulations of the Council have been self-serving as much as public serving, and her wacky last-minute amendments and ever shifting position may wind up costing Washintonians a ball club and the attendant redevelopment of a crappy neighborhood.

In the end, finding a source for that $140 million DC hopes to pass off to the private sector is likely to be the key. The logical source: whomever MLB finds to buy the team. The rub: that buyer's going to want to shave that money off MLB's sticker price. Buddy can you spare a dime?

Comments

[SF]

How about MLB ponying up itself? It can use it's satellite radio money...

Is anyone else tired of these leagues and these teams sticking the burden on the taxpayer? Doesn't the taxpayer's burden get reflected in ticket and concession costs? I fully realize that this is simplistic, but if MLB wants to pick up and move, and DC is willing to pay some, if not all, of the costs, then the rest of the costs should be borne by the League or the new owner, end of story.

[YF]

That's a nice ideal, and the sad irony is that the previous positive impulses of certain owners may preclude them from such a stance here: those who have paid or are paying for their own parks might reasonably wonder why they should subvent a stadium for a new DC owner.

Also, let's keep in mind that the "taxpayers" in question here are DC's largest corporations, and that the city would (presumably, and to what extent is unclear) have a bump in tax revenue from the new development (so this might actually be a good deal for the "taxpayer." not to mention the small businessman, job seeker, and--oh yeah--baseball fan). Also keep in mind that DC, because it is a discrete political entity, stands to draw a great deal of income from neighboring states (VA, MD), where many of the suburban fans would be coming from (essentially, reverse white flight). In most other development cases this isn't an issue, as revenue is just redistributed between counties within a state. But here, a very poor urban entity would be drawing money from its much more wealthy neighbors. So DC has a lot to gain in this deal.

The owners leveraging the city for all they can get is simply good business. It's up to DC to protect itself by not giving the League too sweetheart a deal. Which it did.

The way to avoid this? Kill the antitrust exemption, which would reverse the bargaining positions. The city, which is a great market, would then presumably have any number of suitors willing to come in and establish a team, and it could make it's own best deal. As it stands, baseball is a monopoly, and it is most assuredly not run in the public interest, at least from a financial standpoint.

[YF]

It's worth noting the disparity in public opinion about this as reflected in the national vs local media. Around the country, fans are hailing the DC council, and Cropp in particular, for standing up for the public, and teaching those big bad baseball owners a well-deserved lesson. But in DC, there's pretty much universal scorn for the council and Cropp (not to mention the mayor) for botching a potentially positive opportunity for the city. Which is not to defend the MLB position, but merely to say that DC should not be forced to "teach MLB a lesson" on behalf of the nation at its own expense. Because the League isn't going to learn the lesson anyway; it will just look for another city and go back to square one.

DC and MLB is a good marriage. The two sides simply need to negotiate a fair prenup.

[Lauren]

as someone who lives in the DC area, and is a baseball fan (a Yanks fan, but I could go watch the Mets lose to the Nats a few times, that'd be cool), I wanted the Expos to come to DC. but I did not want a new stadium financed and built exclusively with public money. if you've ever been to this area, you know the myriad of problems the District has and know that it's a shame that public money would be used to build a new baseball stadium when we have schools falling apart, lousy libraries, a crappy police department, roads that are pot-hole filled, hospitals that are being closed, teachers are being threatened with lay-offs due to a budget crunch. and I *realize* that they're not going to get the money for all that *anyway*, but if a statement had to be made about how lousy this deal was, I'm glad Linda Cropp had the balls to do make it.

and, of course, Yanks in '05!

[YF]

A thoroughly reasonable position, but the old maxim "don't cut off your nose to spite your face" comes to mind. This is not a zero-sum game. Funding the stadium and funding other worthy initiatives in the District are not mutually exclusive; indeed, funding the stadium may well improve the overall economic picture of the city, which would be a universal good. Sometimes you have to deal with the devil. (Okay, that's the last cliche in this post.) And whether you agree that this deal should have been amended or not to balance more toward the District, it's hard to justify Cropp's modus operandi. DC should not be in a position of losing its team at the 11th hour. If a settlement is reached, it's a settlement that could better have been reached long ago.

[Lauren]

heh, I'm very much the kind of person who'll cut off my nose to spite my face. on the flipside of this whole discussion, I have been down to the area around the brand new MCI Center in the last few months, and that area is thriving tremendously thanks in part to the arena being right there, which makes the point that it would be possible to spur other economic growth from the development of a stadium in a currently un- or under-developed part of the District. and, with the economic growth come more taxes, which could be used to help deal with the myriad of problems mentioned above.

sadly I don't see this as an easy issue to resolve. there are just too many variables IMO to make this an easily resolvable situation.

as for Cropp, I hear she's got designs on becoming or at least running for Mayor, so I don't doubt her motives are not 100% pure. but then I've lived in DC long enough to know that no one does anything here out or pure altruism when politics are involved.