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Summary
The problem we are going to discuss concerns the economic and financial impacts that incorrect budget forecasts have had on the plans to build a new Washington Nationals Ballpark. The main goal is to provide District of Columbia officials and the DC Sports and Entertainment Commission with the necessary tools they will need to reach a financial agreement that will allow the production of the ideal sports arena for Washington, D.C.
The root cause of the Nationals situation is that District officials did not do thorough planning for the new ballpark. That planning should have included a SWOT analysis which would have outlined potential strengths, weaknesses, opportunities and threats for building the stadium. As a result, the budget was gravely understated leaving the team and the District with potential problems and limited options for potential jobs and, revitalization, transportation, parking, financing and ownership.
Analysis
This year Washington, D.C. ended its 33 year absence from baseball when the Major League Baseball (MLB) announced that the Montreal Expos would be moving to the area. Several states were interested in hosting the team but Washington, D.C. had an advantage, RFK Stadium. The team leased the field for a short time while District officials made arrangements to build a new ballpark on the Anacostia River to house the team. The efforts to build the new stadium have recently been under fire due to extreme budget underestimations. The original budget for the stadium was approximately $60 million off target. Now District officials are looking for ways to deliver what they promised to fans, residents and business partners. This document will analyze what effect this huge miscalculation will have on the ballparks success or failure.
Jobs and Revenues
The creation of the new stadium would create a total of 4,400 jobs during the actual construction of the facility. During construction, that number breaks down to 2,800 construction jobs, and 1,600 materials manufacturing personnel. After construction, the stadium will employ 360 full-time equal annual jobs to include: administrative staff, concessions staff, merchandising, maintenance, baseball players and team managers.
The stadium will generate $810,000 in income tax revenues for the District of Columbia. Annually, the taxable income will be $88 million. At least 98 resident employees in the District will generate an additional $330,000 in revenue form motor vehicle tax revenues, property, sales and use.
With the budget being so inaccurate and officials not being able to come to an accord, the District is at risk of promising something to the residents that it can not deliver. Unless a decision is made, there will be no new jobs coming to the area which will affect unemployment and possibly crime. The purpose of having a team such as the Nationals in the District is to promote prosperity and growth in a somewhat struggling locality.
Area Revitalization/Culture
Having the Washington Nationals in Washington, D.C gives the District a chance at revitalization. The development of the ballpark is the first step in redeveloping the Anacostia water front. That initiative includes the bringing affordable housing the area, the establishment of 32 acres of public parkland, a river walk along each side of the river, new businesses, new jobs and beautiful surroundings. In addition, other local area businesses stand to gain more revenues such as local area hotels, restaurants, vendors and retailers.
Metrorail & Transit Systems
The Chief Financial Officer of the District of Columbia, Natwar M. Gandhi originally budgeted $20 million toward Metro projects relative to the new stadium. The plans involved expanding Navy Yard Station on the Green Line. Included in that amount were plans to for a wider platform, new escalators and a new elevator. Also included in the changes would be adding seven fare gates, increasing Green Lines to 8-car trains and operating the portal as one-way on game days. These changes would enable the station to increase capacity from 5,000 to 15,000 people per hour and increase rider capacity from 7,600 to 17,600 riders per hour.
The original Metro plans have received significant cutbacks. It seems as though Gandhi did not budget enough for the Metro enhancements. Instead of $20 million, the expected changes are said to cost up to $40 million. Metro was only given $250,000 from the sports commission. That amount will only pay for three new fare gates and increase capacities from 5,000 to 10,000 people per hour.
Parking
In the original stadium generation cost, money was allotted for an underground parking garage that would be available for patrons to park in during events. Due to the overestimation of the costs, the $20 million garage could not be supported. As a result, District officials were forced to go to the league and asked for the $20 million.
As it stands, on-street parking is not allowed in the surrounding areas of the stadium. Attendees choosing to park on the street will be ticketed and towed. The demand of the new stadium would call for 3,850 spaces for weekday games and 4,900 for weekend games. It is the objective of the Sports and Entertainment Commission to:
Supply parking as part of the ballpark. This would consist of approximately 1,225 spaces
Utilize existing parking areas near to the stadium to include land targeted for redevelopment
Focus on the areas of the Southeast Federal Center, the Buzzard Point are and areas north of M street for parking
Without the additional money from the league to meet the parking requirements in the initial plans, certain things need