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GOVERNMENT OF THE DISTRICT OF COLUMBIA
Chief Financial Officer Natwar M. Gandhi has released an updated estimate of the cost of building a new major league baseball stadium at the site currently proposed in Southeast D.C. and at a site adjacent to RFK stadium. In a letter to Council Chair Linda Cropp, Gandhi estimates the total cost for the proposed Southeast D.C. site to be $667.3 million; the cost for the site at RFK is estimated at $605.5 million. The updated estimates were requested by Council Members in advance of a Public Roundtable in Council Chambers on Tuesday, December 13, 10:00 a.m., to review and discuss the lease agreement for the baseball stadium and related issues. The letter to Mrs. Cropp and a summary of the baseball cost estimates are available for review at www.cfo.dc.gov. Government
of the District of Columbia Office of Communications
MAYOR WILLIAMS REACTS TO UPDATED CFO STADIUM ANALYSIS
|
ESTIMATED COST SUMMARY (in millions) Totals may vary due to rounding. |
||
Southeast | RFK | |
Total Land and Site Preparation Cost, including Remediation | $109.7 | $16.0 |
Total Hard and Soft Costs | 376.6 | 376.6 |
Total Ancillary Costs | 71.0 | 45.3 |
Total Project Contingency | 43.2 | 72.9 |
Spending Not Recoverable in Next Three Years | n/a | 62.1 |
ESTIMATED PROJECT COST WITHOUT FINANCING | $600.5 | $573.0 |
Financing Cost | 30.3 | 23.0 |
Infrastructure Cost | 36.5 | 9.6 |
ESTIMATED TOTAL INCLUDING INFRASTRUCTURE | $667.3 | $605.5 |
Attached is a detailed list of costs for both sites. Please note that we have not examined the economic development benefits of building a baseball stadium at either site. It is also important to note that the costs will continue to rise at both sites if there are substantial delays in the start of construction beyond March 2006. Further, there are known penalties if stadium construction is not completed by March 2008 at the Southeast site. If the completion were one year late, the District would incur a penalty of up to $5.3 million. If the completion is two years late, the District must pay $19 million to Major League Baseball (MLB). Similar penalties for the RFK site are unknown, as we must renegotiate all agreements with MLB if the decision is made to move to the RFK site.
A budget for project costs of $600.5 million at the Southeast site including financing can be funded by issuing no more than $534.8 million in bonds in addition to using fiscal year 2005 budget authority and a contribution from MLB, without adversely affecting the General Fund. Conversely, if the District were to decide to move the stadium to the RFK site, the expected savings of $62 million would not necessarily accrue to the General Fund. It is also important to note that a project budget of greater than $600.5 million would require additional sources of revenue.
A number of issues must be resolved before the RFK site could be selected. First, under what conditions would MLB agree to a new site? Moving the stadium to RFK would require approval of MLB and renegotiation of all MLB agreements, including the Baseball Stadium Agreement and the Lease Agreement, which could add significant delays to the construction start. The Baseball Stadium Agreement requires the District government to provide a 30-year lease with a total of 10 option years. The current RFK lease expires in 2038, and either Major League Baseball would have to agree to a shorter lease or the federal government would have to extend the current lease by legislation. One possible outcome is that MLS will not agree to a move to RFK and will leave the District for another location.
The second issue concerns the availability of the RFK site for the development of a new ballpark. Is the construction of a new baseball stadium permitted under the District's current lease with the Federal government? The RFK site is currently federal land that is leased to the District under a fifty-year ground lease with the National Park Service. The lease authorizes the District to use the site for stadium purposes. However, it is unclear whether the National Park Service would allow the construction of a new ballpark on the site. If the National Park Service does not allow the construction of a new ballpark on the site, negotiating a new lease with the federal government could cause delays and increase the cost of building a new stadium at the RFK site.
In addition, a new ballpark on the site may require a change in the underlying zoning for the site. A change in the underlying zoning of the site could cause delays and increase the cost of building a new stadium at the RFK site because the National Capital Planning Commission may have the right to review and comment on the proposed use of the site.
Additionally, The National Environmental Policy Act of 1969 (NEPA) requires that any major federal action affecting the quality of the environment include a detailed report about the environmental impact. It is unclear whether the construction of a new stadium at the RFK site would require a federal action. If a federal action is required and a NEPA environmental report is necessary, the construction of the ballpark could be delayed.
In order to address all of these considerations, we have added an additional ten percent contingency of approximately $31 million to the hard cost estimate for the RFK site.
Please feel free to contact my office if you would like any additional information regarding these estimates.
Sincerely,
Natwar M. Gandhi
Chief Financial Officer
Distribution List
The Honorable Anthony A. Williams, Mayor of the District
of Columbia
The Honorable Carol Schwartz (At-Large)
The Honorable David Catania (At-Large)
The Honorable Phil Mendelson (At-Large)
The Honorable Kwame R. Brown (At-Large)
The Honorable Jim Graham (Ward 1)
The Honorable Jack Evans (Ward 2)
The Honorable Kathleen Patterson (Ward 3)
The Honorable Adrian Fenty (Ward 4)
The Honorable Vincent Orange (Ward 5)
The Honorable Sharon Ambrose (Ward 6)
The Honorable Vincent G. Gray (Ward 7)
The Honorable Marion Barry (Ward 8)
Robert Bobb, Deputy Mayor and City Administrator Alfreda V. Davis, Chief
of Staff to the Mayor
Arte Blitzstein, Budget Director, Council of the District of
Columbia
Rob Miller, Legislative Council, Office of the Chairman
Office of the Chief Financial Officer
Ballpark Cost Estimate
December 2005
Southeast | RFK | ||||
1 | Land and Site Preparation Cost | ||||
2 | Acquisition | $97.7 | $0.0 | SE: Based on OPM's property appraisals RFK No land purchase necessary |
|
3 | Environmental Remediation | 8.0 | 16.0 | SE: Cost to remove 200,000 tons of
soil RFK Cost to remove 400,000 tons of soil |
|
4 | Relocation | 4.0 | 4.0 | SE: $4 million for relocation of
businesses RFK: No relocation necessary |
|
5 | Total Land and Site Preparation Cost | $109.7 | $16.0 | ||
6 | Hard and Soft Costs | ||||
7 | Base Building Cost (assuming start of March 2006) | $315.4 | $315.4 | Increases due to inflation, Katrina, District requirements, & current conditions | |
8 | Ballpark Soft Cost | 61.2 | 61.2 | Increases due to design fees and predevelopment costs | |
9 | Total Hard and Soft Costs | $376.6 | $376.6 | ||
10 | Ancillary Costs | ||||
11 | RFK Renovation | $24.0 | $24.0 | SE: Actual spending RFK: Actual spending |
|
12 | Parking | 21.0 | 6.3 | SE: Cost of 900 spaces above ground
and 300 spaces under the stadium RFK: Cost for surface paving over existing stadium site after demolition |
|
13 | Site Utilities | 15.0 | 6.5 | SE: Cost of relocating and
reconnecting existing utilities RFK: Cost of connecting new utilities |
|
14 | Tunnel Protection | 0.5 | 0.0 | SE: Cost of protecting sewer tunnel
based on discussions with WASA RFK: No sewer tunnel |
|
15 | Sidewalks | 4.0 | 1.5 | SE: Cost of sidewalks adjacent to
stadium RFK: Cost of sidewalks adjacent to stadium |
|
16 | Demolition | 3.0 | 6.0 | SE: Demolition of existing structures RFK: Demolition of existing stadium |
|
17 | Exterior Public Space/ Plazas | 3.5 | 1.0 | SE: Cost of public plaza adjacent to
stadium RFK: Cost of public space near stadium |
|
18 | Total Ancillary Cost | 71.0 | 45.3 | ||
19 | Project Contingency | ||||
20 | Hard Cost | $31.5 | $31.5 | 10% of Hard cost | |
21 | RFK Contingency Factor | 0.0 | 31.5 | Contingency to account for possible delay in construction start for 1-2 years | |
22 | Soft Cost | 6.1 | 6.1 | 10% of Soft cost | |
23 | Parking | 2.1 | 0.6 | 10% of Parking cost | |
24 | Site Utilities | 1.5 | 0.7 | 10% of Site Utilities | |
25 | Tunnel Protection | 0.1 | 0.0 | 10% of Tunnel Protection | |
26 | Sidewalks | 0.4 | 0.2 | 10% of Sidewalks | |
27 | Demolition | 0.3 | 0.6 | 10% of Demolition | |
28 | Exterior Public Space / Plazas | 0.4 | 0.1 | 10% of Plazas | |
29 | Environmental Remediation | 0.8 | 1.6 | 10% of Environmental Remediation | |
30 | Total Project Contingency | $43.2 | $72.9 | ||
31 | Spending Not Recoverable in Next Three Years | n/a | 62.1 | See page 2 for detail | |
32 | ESTIMATED PROJECT COST WITHOUT FINANCING | $600.5 | $573.0 | ||
33 | Estimated Financing Costs | 30.3 | 23.0 | Insurers confirmed that we can use a surety rather than a cash reserve as a result of stronger investor security brought about by the technical corrections approved by the Council | |
34 | ESTIMATED PROJECT COST WITH FINANCING | $630.8 | $596.0 | ||
35 | Infrastructure Costs | ||||
36 | Metro Improvements | $19.9 | $0.0 | SE: Improvements to Navy Yard Metro
station RFK: No improvements necessary to Stadium/Armory station |
|
37 | Metro Design | 1.4 | 0.0 | SE: Cost of designing expansion RFK: No design work necessary |
|
38 | Roadwork | 12.0 | 8.0 | SE: Costs associated with repaving
roads RFK: Cost of new access road to stadium and repaving of some existing roads |
|
39 | Roadwork Design | 0.0 | 0.8 | SE: No design costs associated with
repaving streets RFK: Cost of designing new access streets to stadium |
|
40 | Contingency for Metro and Roadwork | 3.2 | 0.8 | 10% of Metro Improvements and Roadwork | |
41 | Total Infrastructure Cost | $36.5 | $9.6 | ||
42 | ESTIMATED TOTAL INCLUDING INFRASTRUCTURE | $667.3 | $605.5 | ||
43 | OTHER COSTS --- DISTRICT-CONTROLLED | ||||
44 | Zoning Contingency | $41.4 | $0.0 | SE: Cost to build underground garage
and comply with zoning retail requirement RFK: No zoning requirement for underground parking or retail |
|
45 | District Regulation Contingency | $4.5 | $4.5 | $3M to comply with public art requirement and $1.5M for District permitting fees |
Office of the Chief Financial Officer
Ballpark Cost Estimate
December 2005
1 | Acquisition | ||
2 |
|
$97.7 | |
3 |
|
(30.0) | Estimate that 113 of landowners will choose to keep their land if given the choice |
4 |
|
$67.7 | Remaining 213 of landowners will sell to District if given the choice |
5 |
|
(27.7) | Estimate that 40% of properties owned by District can be sold in 2-3 years |
6 |
|
$40.0 | Estimate that 60% of properties will not be able to be sold in the next 2-3 years |
7 | Hard Cost | 0.5 | Pre-construction services rendered to date |
8 | Architectural & Engineering Services | 4.6 | Design services rendered to date |
9 | Legal & Accounting Fees | 0,8 | Legal services rendered to date |
10 | Project Management Fees | 1.7 | Project management services rendered to date |
11 | Environmental Mitigation Study | 0.5 | Study performed on SE site |
12 | Traffic Management Plan | 0,1 | Study performed on SE site |
13 | Permitting Fees | 0.1 | Fees paid to DCRA associated with site utility work |
14 | Site Utilities | 12.9 | Costs incurred by PEPCO at SE site |
15 | Financing Costs | 1.0 | Legal and financial advisory services rendered to date |
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