October 18, 2004 - Taking Note

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Taking note . . .

Observations about public affairs in the nation’s capital
by the editor of The Common Denominator

WHO PAYS? Mayor Anthony Williams has publicly stated that the District’s General Fund would not be used to pay for a new stadium. Legislation he forwarded to the city council provides for new baseball-associated fees and taxes to be paid into a "Ballpark Revenue Fund" that will be used exclusively to retire debt incurred by building the proposed new venue.

But the mayor is proposing that the "Ballpark Revenue Fund" be created within the District’s General Fund. And the legislation could be amended any time in the future by a mere majority vote of the city council to change the sources of revenue for the "Ballpark Revenue Fund." The legislation also allows a proposed "ballpark tax" on business gross receipts to be increased if anticipated annual revenue fails to cover debt service on stadium construction bonds.

PUTTING THE CART BEFORE THE HORSE: City officials appear to be developing a detailed economic impact analysis of a proposed new $440 million baseball stadium as an afterthought. While publicly touting multimillion-dollar community benefits that would result from building a new ballpark near the Washington Navy Yard in Southeast, officials have so far been unable to produce a breakdown of how those numbers were calculated in response to requests from The Common Denominator.

Mayoral spokeswoman Sharon Gang provided a copy of an economic impact analysis done in May 2003 by Economic Research Associates, from which at least some of those numbers seem to have been drawn. However, Gang said that the study "is not site-specific" and assumes that major league ballplayers’ salaries would be taxed – "a provision which has since been excluded," she noted.

Gang said the analysis "is currently being updated."

Councilman Jim Graham, D-Ward 1, said he is still waiting to see the economic impact analysis that the mayor told him last month exists to support the stadium deal.

"I understand it’s still under development," Graham told The Common Denominator on Oct. 14. Graham is one of a handful of D.C. City Council members who have not yet committed to support the mayor’s plan to finance a replacement for Robert F. Kennedy Stadium.

LOSING ALMOST $6 MILLION: Officials have been unable to explain some of the numbers contained in a one-page "Summary of Benefits of MLB Team in Washington, D.C." provided to reporters during a briefing on Sept. 30, a day after Major League Baseball officials announced that the National League’s Montreal Expos will play in Washington next season.

Among bulleted items on the sheet: a total of $20 million more annually spent in the city’s hotels and over $17 million annually spent in D.C. restaurants.

That’s an annual injection of $37 million into the District’s hospitality industry.

But two bulleted items later, the sheet places the "overall economic benefit to the hospitality industry in the District"at a quite specific total of $388,246 per game, or $31,447,926 annually.

Apparently, the District’s "financial wizard" mayor wasn’t asked to vet the numbers – or someone thinks journalists can’t do math.

GENERATING JOBS: "Team and ballpark operations will create 360 jobs earning an annual total of $94M," according to the mayor’s "Summary of Benefits" of a new stadium. That’s an average salary of more than $261,000 a year, far beyond what any ballpark usher or peanut hawker can expect to take home.

Upon further investigation, that $94 million in new salaries includes anticipated salaries of professional ballplayers and coaches – most of whom are unlikely to take up legal residence in the District, meaning they will not pay income tax to the city.

And those 3,500 jobs that "ballpark construction will support"? According to the May 2003 economic impact analysis, that’s 2,200 construction jobs and 1,300 additional jobs to be generated indirectly through "building materials spending." How many of those 2,200 on-site construction jobs will require new hires is questionable, given that most builders generally move their existing workforce from job site to job site, rather than hiring a whole new crew for every project.