Attendance at Nationals Park has fallen more than a quarter short of a consultant’s projections for the stadium’s inaugural year, cutting into the revenue needed to pay the ballpark bonds and spurring a D.C. Council member to demand the city’s money back.
The District’s ability to pay down the debt on the publicly financed ballpark depends in part on the number of people who show up to the games, David Catania, independent at-large, wrote in a letter Tuesday to Chief Financial Officer Natwar Gandhi.
A study was commissioned in 2005 by Gandhi’s office. Written by Los Angeles-based Economics Research Associates, the report predicted attendance at the 41,000-seat ballpark would average 39,130 in year one, dropping to 32,737 in year four.
But paid attendance through 28 games has averaged only 29,141, Catania said, 26 percent lower than the consultant’s estimates. The Nationals are drawing the 15th-best crowd in baseball, according to ESPN, with a team that is in last place in the National League East and a 22-31 record as of Wednesday.
“It appears now,” Catania wrote, “that ERA may have seriously overestimated ticket sales, which represents a major portion of stadium-related revenues.”
The ballpark bonds are structured in such a way “that a significant drop in attendance would not hinder our ability to pay debt service,” Gandhi responded Wednesday in a letter to Catania.
“In a worst-case scenario, total attendance at the new stadium could drop to approximately 10,000 people per game without affecting debt-service payments,” the CFO said.
Ticket prices at the new ballpark are 20 percent higher than the consultant predicted, Gandhi said, which will drastically reduce the effect of reduced attendance.
The ERA report, issued in April 2006, projected the new ballpark would generate an estimated $165.3 million in its first season, dropping to $154.9 million in the fourth year, but then increasing 2.8 percent annually. Revenues would cross $200 million by 2021, the consultant said.
The District is paying down the Nationals Park debt using baseball-related sales tax revenues, the Nationals’ team rent and a utility tax on large businesses. The ballpark fund is expected to accumulate up to $20 million a year more than the city would need to pay off the bonds, according to Gandhi’s estimates. Several council members are eyeing the excess to back a $150 million subsidy for a 27,000-seat D.C. United soccer stadium at Poplar Point.
In his letter, Catania called on Gandhi to recover fees paid to ERA for its “faulty work.” But Gandhi refused, arguing the consultant’s conclusions were “reasonably based.”
