New DCU stadium closest it has ever come?

What I found interesting when reading about the current progress was that the stadium built for the Nationals is on pace to be paid off early and it is actually turning out to be a good deal rather than the horrible deal as reported and repeated over and over earlier.

 

Can someone please photoshop a picture of Goff so he looks like the bassist from Bauhaus?

 

Steve Goff not Goth

The link is in the "Monday, June 04, 2012 " thread.

$157 million would be one of the more expensive stadiums especially since it doesn't include the land and infrastructure.

Erick Thohir who part-owns the Philadelphia 76er and is an Indonesian media mogul and basketball team owner is the primary person that has been confirmed as a potential investor. The identity of another man who is an American and has had dealings with sports has not been found.

 

I almost don't want anyone to talk about it. I just want it to happen.

 

whoever chose that picture for that article should be fired

 

No, it's not - that's just evidence that the financing mechanism worked like a charm, but that doesn't mean it's a 'good deal' The distinction between a good deal and a bad deal isn't if the bonds are paid off, it's the actual deal itself - and this one found DC paying more or less 100% of the stadium costs for the Nats.

To meet MLB's terms, DC had to strike a deal with MLB while MLB still owned the team, before they had sold it to the eventual owners. MLB forbade the potential ownership groups from offering much in the way of a private contribution towards stadium costs, as they didn't want to influence their sale process. Therefore, DC was left holding the bag for almost all of the costs - and that's why people in DC think it was a bad deal.

 

Nah, I think we did our 22k seater for $80 million or so. Its nothing fancy but its new and you know what they say...location, location, location.

 

Well, not 100%. But more than half. This according to:
http://www.ballparks.com/baseball/national/wasbpk.htm

So apparently the stadium is hitting the targets (although even that is somewhat new news to me, as last I'd heard was Natwar Ghandhi, the city's CFO, saying that a DCU stadium was unaffordable because the baseball bonds weren't hitting targets)--but the targets themselves involved over 50% of the revenue coming from a new tax on largely unrelated business. The stadium was set out to be only 40-48% self-repaying to begin with. (And that's skipping over the somewhat cushy loan that makes the difference between self-repaying and truly private.)

 

You have to separate out the funding sources from the financing mechanisms. DC capped their capital expenditures at $611 million, and MLB chipped in $20 million. That's substantially more than half.

Of DC's $611 million, I believe about $530 of that was bonded, and that's where the ongoing tax revenues from tickets and concessions as well as the new business tax revenues are going - to cover the debt service on those bonds.

You could consider the ticket taxes to be user fee finance, but the fact remains that the District issued the bonds and therefore that money is counted against the District's debt cap - bonding isn't free, there's a limited capacity for it.

Now, compare that to a contemporary stadium, like Target Field in Minneapolis. $535 million total cost, the Twins chipped in $125 million on the base cost and also covered all cost overruns, as well as paying for add-ons to the stadium (stone facades, etc).

Just look at this chart, and it shows how poor of a deal DC got relative to other recently constructed stadiums: http://assets.sbnation.com/assets/650902/newtable.png

 

I would count it as user-fee finance, though you are right that bonding is not free. The simplest way to look at it is to compare it to a home loan.

* As you point out, where the Twins paid a fairly normal downpayment, the Nats paid almost none.
* The lender (DC), basically any time you have bonds, is offering you a cut rate.
* Part of it is based on your income, so if that were to flag, the lender has little recourse but to just give you more time.
* And, of course, the lender only expects to ever get a somewhere less than half his money back from you, and the rest of it from someone unrelated to you.

Compared to a market loan, I'd spitball the final effective subsidy here in the neighborhood of 2/3rds.

By way of comparison to prior United proposals, I seem to recall the PG County proposal roughly split into fourths (25% down payment, 25% rent, 25% repayment by direct tax, and 25% county tax increment financing), but it didn't get far enough to hone the details. The current DC United proposal appears to be that as far as stadium construction goes, DC will go it alone with a private loan. The District will acquire and clear the plot of land (probably charging United a very nominal fee for land rental) and pay for infrastructure.

 

will it have a roof?

 

It would amplify the sound inside the stadium.

 

I see what you did there. Paging Mr. Warmth, please pick up the white courtesy phone.

 

I'm not going to get sucked into this topic. I want this to happen but we have been through this before

 

Off-hand im thinking it would be the second most expensive stadium in the league behind the Red Bulls. At the very least it's in the upper echelon of cost in this league.

 

This ownership situation needs to get done before anyone can get a hard on about a new stadium.


No stadium plan without new money and no new money without a stadium plan. It kind of feels like a stalemate and the city will not be the first to budge.

 

Yep, but the good news is that, as Goff reported and Kevin Payne (DCU GM) confirmed yesterday on the Capital Soccer show, that it "new money" appears imminent in the way of new majority ownership.

KP said:

"I believe people understand that with the advent of new majority ownership -- with Will (Chang) maintaining a very significant stake in the team and we hope that that will occur this month…there's no guarantee but that's what we're hoping -- that that will make the conversation a lot easier... It will put us in a better position to say 'here's what we're capable of doing as part of this process.'"​

I think we've all known for some time that United would have to carry the lion's share of the costs to get a stadium done. As a DC resident and taxpayer I think that's only right. I think reasonable help for a significant local business is one thing but the Nats' deal was absurd.

 

You can build an outstanding soccer stadium for less than $100m, even with location taken into account. $157m is more than enough for a great stadium, especially for those long suffering fans. All the best DCU

 

Best of luck to the fans and ownership. Hope it all comes to fruition.