Using tax revenues earmarked to pay down D.C.’s debt to instead publicly subsidize a new soccer stadium is a chancy policy decision that puts taxpayers at risk, Chief Financial Officer Natwar Gandhi warned in a recent memo.
In his Feb. 7 analysis, Gandhi advised that the District would collect enough money through ballpark taxes and fees to retire the Washington Nationals’ stadium debt by 2026, 10 years earlier than projected. Or, he wrote, D.C. could gamble and use the excess revenues — projected to reach $20 million a year by 2027 — to buy more bonds for capital projects.
Mayor Adrian Fenty is eyeing the Ballpark Revenue Fund, composed of baseball-related sales tax revenues, the Nationals’ team rent and a tax on large businesses, as one possible source to subsidize a 27,000-seat stadium for D.C. United at Poplar Point. The mayor said last week the city would have to chip in if it is going to keep the soccer team in the District, and multiple sources have said he is prepared to contribute at least $150 million of a $230 million stadium.
There are risks to using the ballpark fund for capital needs, Gandhi said. Poor team performance could reduce stadium collections while a player strike would cease the revenue stream altogether, he said, leaving shortfalls that “could trigger the need to use General Fund monies to pay debt service on the borrowing.”
The CFO has repeatedly warned against issuing too much additional debt, a practice that threatens the city’s good standing on Wall Street. The city’s $10,000 debt-per-capita rate is among the highest in the country.
A soccer stadium at Poplar Point “will be a catalyst for the economic revitalization of East of the River,” D.C. Council Chairman Vincent Gray said Friday. Gray said he would work with the mayor “to craft an agreement that will benefit everyone.”
But at-large Councilman Phil Mendelson, who opposed the Nationals’ financing deal, questioned whether the District should take “what little amount of money we earn and spend it on another stadium.”
Barbara Lang, president of the D.C. Chamber of Commerce, said the business community expects that any surplus funds will be used to pay off the baseball stadium bonds early so the business tax can be suspended.
“That’s what we’re looking for,” Lang said, “until somebody comes and tells me why we shouldn’t be.”
