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Major League Baseball Briefing
September 2004

Government of the District of Columbia
Anthony A. Williams, Mayor

The Ballpark Site

RFK

• Team will play at RFK for approximately 3 years
• Team owner will pay Sports Commission for expenses and operating costs.

Target Program for MLB Baseball

• 41,000 Seats
• 74 Suites
• 2,000 Club Seats
• 1,100 On-Site Parking Spaces
• State-of-the-Art Facilities, Services, and Amenities

Site Criteria

• The District wanted a site that strengthens the economy and revitalize neighborhoods
• Major criteria for site analysis included
  • Availability of Land at Sites
  • Access to Transportation
  • Economically viable for MLB
  • Ability for the Ballpark to have a Broader Neighborhood Impact
  • Fit with District Planning and Economic Development Goals

Examples from Other Cities

Ballparks Can Revitalize Downtown Neighborhoods

• Coors Field: When the City of Denver selected the site it was perceived as a few blocks too far away; today it is the bookend of mixed-use Lower Downtown (LoDo) and full of residential and retail growth.
• Jacobs Field: The new home of the Cleveland Indians, helped bring new life to the Flatlands in Cleveland in 1994.

Ballparks Can Revitalize Waterfront Neighborhoods

• Pac Bell Park: In 1989, it was an underdeveloped area of the South of Market area of San Francisco (SoMa). Today, Pac Bell is a famous SF area landmark in a vital urban district.
• PNC Park: The new home of the Pittsburgh Pirates, re-invigorated a Pittsburgh neighborhood when it opened in 2001.

M Street, SE Waterfront

Availability of Land: Land is privately-owned

Metro Access: Navy Yard Green Line Metro; 1 stop to Yellow Line; 2 stops to Red Line

Broader Impact: Completes neighborhood development between South Capitol Street and SEFC/Navy Yard.

Planning Fit: Area is part of the Anacostia Waterfront Initiative-Near Southeast Neighborhood.

Status of Land

• 63 Total Parcels: 0 Publicly Owned; 63 Privately Owned
• 27 Owners
• 40% vacant land & parking lots (majority of occupied land is small warehouses)

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Public & Economic Benefits

Public Benefits

• MLB will agree to a strong and substantial community benefits package that will contribute to the needs of DC residents and youth such as:
  • Support for youth recreation, literacy and education
  • Allow access to ballpark through ticket programs
• $1 for each paid attendee over 2.5 million/year will go to the Sports Commission for youth recreation, the Commission's grant program and other public benefits

Fiscal and Economic Impacts

• Development of the ballpark and surrounding area will lead the redevelopment of the Anacostia waterfront
• The District will capture "net new" revenue that would otherwise have been spent in another jurisdiction

Total Impacts

• The ongoing benefits of a ballpark will total over $1 billion over a 30-year period
• Major League Baseball in DC will generate between $24-$30 million in annual tax collections
• Ballpark construction will support 3,500 jobs and generate $5 million in District tax revenues
• Team and ballpark operations will create 360 jobs earning an annual total of $94 million
• Visitor and fan spending outside the ballpark will account for over $48 million annually in economic activity to the District
  • New incremental room nights generated by 81 baseball games will produce a total of $20M of this spending in hotels
  • Over $17 million annually will be spent in DC restaurants on feed and beverages
  • Visiting teams are projected to spend $1.9M per year in DC
  • The overall economic benefit to the hospitality economic in the District is $388,246 per game. On an annualized basis, the benefit to the hospitality economic is $31,447,926.
  • Outside ballpark spending supports 675 District jobs in excess of $14M in earnings; 241 hotel jobs; 175 retail jobs; 174 restaurant jobs; 114 transportation jobs and 71 parking jobs

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Public/Private Partnership

• DC Residents will not be taxed.
• General Fund revenues will not be required or at risk.
• Team will be responsible for all operating expenses and maintenance costs at the new ballpark (in addition to making annual lease payment).

Financing Plan Overview

• District maintains its commitment to fund ballpark through revenues the city will garner from the return of baseball.
• District will not divert existing revenue streams.

Sources of Financing

• Bonds to be repaid through the following revenue streams:
  • Owner Lease Payment: $5.5M (plus yearly escalation)
  • On-Site Taxes: $11-$20M
  • Ballpark (Gross Receipts) Fee: $21-$24M
• Ballpark Fee applies to approximately 11% of total businesses — 2,000 companies
• Small and "main street" businesses exempt
• Ballpark Fee modeled on previous "Arena Fee" used to finance MCI Center
• Similar to MCI experience, Ballpark Fee will sunset (go away) at time bonds are paid off
• The proposed Ballpark Fee will also be assessed on a sliding scale based on gross receipts of incorporated and unincorporated businesses:

Project budget

Other Provisions

• The team will enter into a 30 year lease of the new ballpark that will provide for five two-year renewal options.
• The team will pay rent at the new pallpark starting at $3.5 million in the first year and escalating to $5.5 million by year six with a 2% annual escalation thereafter.
• If the team is sold within 5 years from the commencement of the RFK lease, the team will pay a portion of the appreciation to the Commission.

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Legislation

• Legislation will be sent to Council Friday
• Expected to go to the Finance and Revenue Committee
• Timeline will allow public hearing and two readings
• Final vote of Council will take place in December, 2004
• Increases the tax on tickets and merchandise sold at the ballpark to 10%
• Establishes the Ballpark Fee
• Authorizes the District to issue bonds for payment of the costs of the project (development, construction or renovation)
• Authorizes the District to acquire real property by condemnation for the purpose of building a new ballpark