City Paper is not for tourists
The District would overpay by more than $25 million in completing the land swaps planned as part of the deal to build a D.C. United soccer stadium at Buzzard Point, a report commissioned by the D.C. Council has found.
The deal involves trading the Frank D. Reeves Municipal Center to developer Akridge for land at Buzzard Point and acquiring nearby parcels there. But according to the report, the city would receive $11.2 million less than market value for the Reeves Center and would pay $19.4 million over market value for the various Buzzard Point properties. Below is the full breakdown:
The stadium deal has been criticized by elected officials and watchdog groups for not maximizing the value to the city as valuable parcels of land are exchanged—-the city would give up not just the Reeves Center at 14th and U streets NW, but also a site at First and K streets NW that would become a Pepco substation. The Council asked a group of outside consultants, comprising Conventions, Sports and Leisure International, Integra Realty Resources, and the Robert Bobb Group, to analyze the financials of the deal. Today, the Council released their report.
Mayor-elect Muriel Bowser, like some of her colleagues, has expressed reluctance to support a stadium deal that involves all of these land swaps. Now, with this report casting doubt on the economic wisdom of the exchanges, the political climb is likely to be that much steeper for the deal that Mayor Vince Gray submitted to the Council in May.
The politics of the report’s release also drew criticism. Council Chairman Phil Mendelson opted not to release it until the day after the election, when its political fallout is minimized. The Council is holding a roundtable on the costs and benefits of the stadium deal today at noon.
Mendelson dismissed this line of criticism and argued that the existence of the report is evidence the Council is not trying to hide anything. “The public will have ample opportunity to evaluate it,” he told my colleague Will Sommer last night at Bowser’s election victory party.
The report does find a financial upside to the deal, which would see the city foot about half the cost of the $287 million stadium by providing the land and infrastructure while the team pays for the actual construction. Over 32 years, the report estimates, the net benefit to the city would be $109.4 million, through new jobs and tax revenue. (It’s not clear that the stadium would actually be around for 32 years, though.) In the absence of a stadium, significant development on Buzzard Point is unlikely in the next eight to 10 years, the report finds.
According to the report, the city would get a better deal on the land at Buzzard Point through eminent domain. But, it notes, “there is also considerable time, cost, and risk associated with the condemnation process.”
The full report is below:
Rendering from D.C. United