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Talk about a ballpark figure.
Back in 2005, the D.C. Council asked Chief Financial Officer Natwar M. Gandhi to determine how much it would cost for the city to buy approximately 14 acres of land in Southeast Washington in order to build a baseball stadium. Gandhi employed some experts at the Deloitte & Touche consulting firm for a cost of $466,000. The consultants came back with a figure: $73.7 million, not including legal fees and relocation costs.
No one believed Team Gandhi, least of all the folks who owned the land.
This newspaper, in early 2006, quoted Dale Cooter, a lawyer for several of the parcelholders, saying, “The actual costs will be 100 percent more…than what was estimated by Gandhi.”
The numbers are finally in; the last ballpark property settlement came through late last month. Turns out Cooter was pretty damn spot on: The total land settlement value ended up coming to $141.1 million.
LL called Cooter to inform him of his prescience. “Calling that one correctly wasn’t exactly a matter of nuclear physics,” he says.
Why bring this up now? For one thing, the ballpark remains a hot item in D.C. politics, and money issues continue to cloud the stadium’s existence. Thanks to a dispute with the city, the Nationals are withholding rent on their brand-new Southeast ballpark, leading many city officials and residents to wonder why they paid for the stadium in the first place. Game attendance, too, has been pitiful, compared to expectations.
Last month, Councilmember David A. Catania, long Gandhi’s chief critic and the head bulldog on the land-acquisition battle, started rumbling about how the stadium wouldn’t be generating enough tax revenue to cover the service on the bonds issued to build it. He proposed hiking sales taxes in the stadium to make up the difference and the legislation immediately found seven co-sponsors.
Whatever happens with that bill, the support it found indicates declining faith in the expert opinion of the chief financial officer. Years ago, prior to the ballpark debate, that wasn’t so. Gandhi was uniformly hailed as “Dr. No”—the one guy willing to stand up to spendy elected officials.
The man’s legendary spine slackened, however, when it came to the ballpark. The land appraisals mattered because the D.C. Council had capped land, environmental remediation, and infrastructure costs at $165 million. Exceed that, and the ballpark would have to be built on land the city already owned—i.e., at RFK Stadium. That, however, would threaten the vision of ballpark boosters, starting with legacy-minded mayor and Gandhi comrade Anthony A. Williams.
Instead of endorsing a more realistic projection of land-procurement costs in a time of booming real-estate values, Gandhi caved, embracing the findings of his contracted minions. The figure came in at $161.3 million, and a Southeast ballpark moved ahead. The head of the Office of the Chief Financial Officer was revealed as less “Dr. No” and more “OCFOpussy.”
The cost of land alone is now within spitting distance of the once-inviolable $165 million cap (which was either dropped or ignored depending on who you ask), and if you add in almost $5 million in legal fees, $4 million in relocation costs, and $16 million in environmental remediation fees—well, you can go ahead and lick it.
Catania, unsurprisingly, is not stepping off Gandhi’s neck three years later: “I want to continue to harp on one point…Nat Gandhi owns this deficit, lock, stock, and barrel.…The time has come for him to accept his responsibility for his role in this deficit.”
“He wasn’t incompetent,” Catania says. “He was a co-conspirator.”
The gaping land-cost gaffe by no means ranks with Gandhi’s signature scandal—the tax-office embezzlement scheme that cost D.C. taxpayers around $50 million. But it does vindicate the stadium opponents, many of whom protested that the Williams-Gandhi axis was grossly underestimating the bill for the Nats’ field.
Gandhi, in a statement, stands by his original appraisals: “The estimates for land costs provided by the consultants were made following the system prescribed in the ‘Uniform Standards of Professional Appraisal Practice’ of the Appraisal Institute, that is still in force today and would be used if the process were just now beginning,” he says.
Top Gandhi aide John Ross says the skyrocketing land costs will have no effect on the city’s ability to pay its bond obligations. “We have plenty of money to make these payments,” Ross says. “No one’s in danger of not getting paid.” Yet you can forget about that “$611 million ballpark” that everyone, starting with the Washington Post, always refers to. Given the new numbers, it’s a $650 million stadium, at a bare minimum. Roll in infrastructure costs, plus federal and private contributions, and you’re pushing $800 mil, easy.
Driven by Gandhi’s unrealistic estimate, the city spent years lowballing property owners who were pushed out to make room for the park. Among the last to settle was Robert Siegel, the entertainment impresario who owned several clubs and shops catering to gay men on the unit block of O Street SE. His tussle with the city dragged on through July, and Siegel says he still isn’t happy with the result.
“I wanted substantially more,” Siegel says. “I’m kind of glad it’s over, but I’m not happy with the price.…I feel like they owe me millions more, and I’m never gonna get it.”
Siegel ended up getting $9.88 million for property initially appraised by the city for just under $7 million. So if Siegel was so unhappy with the city’s offer, why settle at all?
Because the city’s flood-the-zone legal tactics had taken their toll: “My hours were costing me an arm and a leg,” he says. “They could outmaneuver me and outgun me, and they would have continued to keep this thing going and costing me money forever.” Siegel estimates his attorneys’ fees at about $500,000.
Siegel was butting heads with the city’s legal counsel—lawyers from the Office of the Attorney General and high-priced mercenaries from Venable LLP. The suits, says Siegel, “were looking at me…like I was some sort of porno king, the dirt of the earth.”
Once functionaries from the mayor’s office got directly involved, things started moving, Siegel says. The difference, says Siegel, was when Neil O. Albert, deputy mayor for planning and economic development, and his deputies got involved. “That’s when things started changing. He should have been involved right from the beginning.” By late June, an agreement had been reached.
The absolute last party to settle was an outfit called Southeast Land Development Associates, and their holdout paid off handsomely. Rather than taking the $10,994,000 check the city originally offered, the company took home just over $20 million in the end, counting closing costs and interest. The deal closed late last month.
While property owners make a laughingstock of his estimate, Gandhi hangs tough. Despite the bad publicity from the tax scandal, he incessantly courts the District’s political class, and the District’s uniform A-level bond ratings help keep his career afloat.
In his statement, Gandhi says the stadium continues to pay for itself. “This,” he says, “is the result of careful and successful planning.”
Loan On Me
Feel like pumping money into your own political campaign? No big deal, it happens all the time. It’s a common ploy for political upstarts—wealthy businessmen and lawyers who need to give their electoral careers a kick-start. You know, the Scott Boldens and Michael A. Browns of the world.
But a four-term incumbent councilmember?
According to campaign finance reports due Monday, at-large Republican Carol Schwartz loaned $40,356 to her own campaign. That pushed the total of her late-starting campaign into six-figure territory, with $110,000 total.
It also allowed her to claim victory over her rival in the GOP primary—youngster Patrick Mara, whose total donor haul went just above the six-figure mark with no help from his own pocketbook. Rather, Mara’s war chest has been pumped up by local business types, especially with help from the hospitality industry—folks like restaurant superlawyer Andrew J. Kline, eatery magnate Paul Cohn, and power-lunch king “Chef Geoff” Tracy. In other words, folks likely to have been upset by Schwartz’s embrace of mandatory sick leave.
Now, campaign loans are nothing new to Schwartz: When she ran four years ago, for instance, she loaned the campaign about $20,000 early on, but she had no credible primary opponent and she was able to run her entire campaign on a bargain-basement $87,000. Not gonna happen this time.
Call Carol the anti-Kwame: Where fellow At-Large Councilmember Kwame R. Brown started raising money months and months in advance, Schwartz started late, not registering her first donor until late June. The result? Brown has no challenger on the Democratic primary ballot, and Schwartz is in for the toughest campaign of her career.
Schwartz says she wouldn’t have it any other way. Raising big money early, she says, is “just not my style.”
She also pushes a somewhat counterintuitive point: Starting late and pumping in her own cash means she doesn’t raise too much money. Huh?
“When you raise big money, a lot of times people expect things in return for their money,” she says. “The more money you have to raise, the harder it is to be as independent as I want to be.”
LL admires such a high-minded rationale for the Schwartz Strategy. Here’s a more of a low-road explanation: “This is the way I’ve always done it, and it’s served me OK over the years,” Schwartz says. “Hopefully, I won’t be penalized for it this time.”
What Makes You a Pro-Gun Lobbyist?
At a debate last week, Ward 2 Democratic council hopeful Cary Silverman decided to stray ever so slightly from the District’s no-guns-never orthodoxy. During a series of gun-related questions, Silverman was asked if he supported allowing businesses to protect themselves with guns.
Silverman thought about it, and gave a thoughtful enough answer: If residents now can protect themselves in their homes, thanks to the Supreme Court, why not let them do the same while in their businesses?
Incumbent Jack Evans pounced, calling Silverman “Pro-Handgun” and a “gun industry lobbyist” in a campaign press release: “It is unfortunate that Silverman must learn the difference between representing his lobbying clients in the gun industry and serving the residents of the neighborhoods of ward 2.”
The next day, while both appeared on WAMU-FM’s Kojo Nnamdi Show, Evans himself labeled Silverman a pro-gun lobbyist. Silverman responded, “I’ve never done a minute of work for the gun industry…and I don’t know where that came from.” In a conversation with LL later that day, Silverman called Evans’ ploy a “far-fetched, pretty desperate attempt to portray me as something I’m not.”
There’s no evidence in federal lobbying disclosure reports that Silverman ever lobbied Congress for gun manufacturers directly; his firm, Shook, Hardy & Bacon, however, has long defended gun and tobacco companies in various lawsuits, but LL can’t find any evidence that Silverman’s been involved with any of those. Evans’ campaign manager Keith Carbone says the connection is through the American Tort Reform Association (ATRA), which Silverman definitely lobbies for [PDF] and which Carbone says is funded in part by gun manufacturers.
In other words, the connection is tenuous. Concedes Carbone, “It’s not like he’s wearing a T-shirt that says Smith & Wesson.”
Yet, in his professional life, Silverman’s associated himself with what can be considered anti-Democratic causes. ATRA, for instance, is dedicated to limiting the opportunities for regular folks to sue, and he’s also, according to his law firm, served as a “point person” for the American Legislative Exchange Council, a conservative think tank allied with tobacco manufacturers that also pushes tort reform. (If you’re detecting some bias in LL’s phrasing, that might be because his father is a trial lawyer.) Silverman’s also lobbied on behalf of pharma giant Eli Lilly & Co. against prescription drug importation.
Silverman has a clever retort to his professional background: “This is why you can’t work at a law firm while you’re on the council,” highlighting, of course, the fact the Evans remains on staff at Patton Boggs representing who knows. Silverman has promised to quit his well-paying, soul-sucking law-firm job should he be elected.
So allow LL to spell out some anti-Silverman rhetorical strategies: “Anti-consumer”? Yeah. “Republican shill”? Maybe. But gun industry lobbyist? Not quite.
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