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Billion-dollar boondoggle
(Published January 9, 2006)

It's time to change the lexicon for D.C. government-speak and replace the term "economic development" with "public benefit" when assessing the publicly funded projects under consideration by the city's elected leaders. The new terminology might help some members of the D.C. City Council strip away the layers of obfuscation as they consider their votes in this election year.

Voters understand the term "public benefit," which means the general public gets something in return for the investment of their public dollars.

"Economic development" has been vague, at best, to describe what the public has received during the past few decades in return for its willingness to trust the promises made by the private development community to wrangle billions of dollars worth of tax breaks, bond financing and other public beneficence from elected officials.

Talk is cheap. Despite the public's investment, the District's high unemployment rate has remained nearly static during the "economic development" boom of the past decade and poverty has deepened.

Meanwhile, the District's public schools which in any other jurisdiction would be at the top of the list for reaping the benefits of "economic development" in recognition of the synergy among good schools, an educated workforce and a community's future progress have been demonized and left to deteriorate.

Despite the recognized failure to maintain healthful conditions in the schools, the folks in charge of facilities for D.C. Public Schools are looking a lot like Einsteins these days when compared to the gang trying to sell the public on the benefits of building a new baseball stadium.

Stadium proponents, on the other hand, can't seem to figure out how much it will cost to build the Taj Mahal with the bottom line, minus financing costs, escalating about $200 million during the past year and they want to build it on land that the city doesn't yet own or control. Comically, the mayor maintains that seeking federal tax dollars to cover part of the stadium-related expenses would somehow lessen the cost of this billion-dollar project to the public.

There's an important question of how D.C. residents will benefit tangibly from building a new stadium.

The Common Denominator asked Chief Financial Officer Natwar Gandhi's office to answer that question in dollars and cents. The answer? There is no anticipated direct financial benefit in new city revenue, which has all been committed to paying off the stadium construction costs. The new city revenue committed to retiring the financing costs, and attributed directly to the stadium's construction, includes estimated annual revenue of $14 million from a ballpark fee and $14 million from a utility tax, collected over 30 years from the business community. There are asterisks attached to the Washington Nationals' expected contributions to a community projects fund, providing the community with no guarantees.

A $28 million annual investment by the business community in the public schools, rather than a stadium, would generate real public benefits. The business community as a whole would reap benefits from a well-educated workforce, while a new stadium will benefit relatively few D.C. businesses.

The District's elected officials should tell Major League Baseball that the District of Columbia cannot afford to jeopardize its financial future by replacing a perfectly serviceable stadium that was built for baseball and can be further upgraded at shared expense to provide the desired luxury accommodations.

City officials also should make amends for their pathetic performance in shepherding the community's educational needs by moving expeditiously to repair the schools even if it requires hiring out-of-town contractors to train and employ primarily local workers to get the job done quickly. Move schoolchildren and their teachers into some of the Class-A office space that taxpayers have helped finance, if necessary, while school renovations are underway. Betting on the District's children, rather than baseball, is a better guarantee for the city's future.

Copyright 2006 The Common Denominator