23 July 2007

The Best Alternatives of Mice and Men

Of course, a major story over the weekend is the stadium situation. David Nakamura in The Post:

Negotiations to build a soccer stadium for D.C. United in Southeast Washington have collapsed, leading District officials to pursue other options for the site and team officials to threaten to move the franchise out of the city, government sources said yesterday.
Which is a bit overdramatic, considering:
A soccer stadium still could be part of the mix but is not a top priority, the sources said.
And this report from the Express:
But the deal isn't dead yet and talks will continue this week, WTOP reports. The city may seek alternative proposals on how to redevelop Poplar Point, part of a larger stretch of waterfront parkland that is set for transfer to local control from the federal government this fall.

Regardless, let's try and put this in perspective. First, the city should look at other alternatives. Failure to do so would be a breach of the public trust. So I'm not about to get all bothered by the city wanting to take a look at other options. Really, I'm not. Yes, I know some people feel "betrayed" because the city "invited" United to look at Poplar Point, but a deal for the city must make sense. And let's look at this report a bit more closely:

...the negotiations stalled over the financial terms. Although United offered to pay for the $150 million stadium, it asked for about $200 million in city subsidies, including roads, tax incentives and the right to develop additional land, said the sources, who spoke on condition of anonymity because the negotiations were private.

Okay, now let's consider this. Two-hundred million dollars is, not to be flip about it, a lot of money. I'm very curious to see what the details of that number are. The question is whether that's the real cost or not. To put it another way, any other development proposal is going to require infrastructure improvements in roads and sewers. How much is that? I'm sure the other proposals may try and obtain tax incentives. How much will they cost? In short, it's possible that other proposals may have the same concepts, but the values will change. It doesn't seem unreasonable that other proposals may call for $100M or $150M in similar arrangements. Which would make the marginal cost to the city of the stadium between $100M and $50M. That's still a lot of money, and United would have to put forward a case that the reduced risk or increased benefits of the United stadium plan is worth it.

To me, that seems like a negotiation. The city can, and should, and must examine its alternatives. DC United can, and should, and must examine its alternatives as well. What's amusing in the verbage here is the idea of "threatening to move out of the city," which is silly. We know that, long-term, United can not be profitable with 20-30K crowds in a 60K stadium where they do not control other lines of revenue. This is not the NFL, or MLB, where owners are rich and act poor. We know that while MLS isn't hemorrhaging cash anymore, it's not a profitable venture by a long-shot. United must be profitable, and if that means moving the team, then that's what it takes. Survival overrides the desire to see the stadium in the city in that case.

Am I mad at the city for this? No, I'm not. I want a soccer stadium, but I can't in good conscience ask for the city to take a deal where they get fleeced. At the same time, I don't think that's the deal being advances (but I'd have to see the details of that $200M number to be sure.)

Everyone, the city and D.C. United, should look at their alternatives. Only then can both sides understand what a equitable negotiated solution should look like. This is how it goes.

PS: This kind of shit does not help matters (HT: Capital Punishment) While I am truly glad to see baseball back in DC, it has to be recognized that the baseball deal between MLB and Williams has poisoned the air. This sort of thing from the new baseball ownership doesn't help the situation. It is frusturating. Very frusturating. That being said, I still like Manny Acta.

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3 Comments:

At 23 July, 2007 11:15, Anonymous bdr said...

Good analysis.

Over the weekend I heard on TOP a story about the Lerners and the City squabbling about $2M over something.

I think one of the undertones (Teenage Kicks!) of the DCU stadium story is that the District has to negotiate this deal as bad news about the baseball stadium deal is about to go public. That's going to make it that much harder for the District to sell any concessions United asks the District to make.

 
At 23 July, 2007 11:59, Blogger adelino said...

There's so much about United and Nats stadium negotiations that I just don't understand. Partly that's my fault for not reading enough. When I do read about this in the Post, I can't help but get a feeling that what's not being said is so much more important and influential than the stuff that makes it into the papers.

If we just give it a cursory glance, we have the following story of two teams that currently share one stadium. One team has the second highest average attendance in its league. The other team ranks 26th out of 30 in the same category.

From that information alone, which team really deserves a new stadium? I know there's this "build it and they will come" mentality with the Nats, but I'm just not buying it. If they continue to suck and the only thing that changes is that ticket prices go way up and the bathrooms smell slightly better, people will catch on quick.

So why does the team that's floundering on the field AND in the stands deserve a new stadium? The only explanation is that the city believes that a new baseball stadium brings status, exposure, and monetary return that will more than make up for weak ticket sales. So it's about the money. I don't have any problem with that, but let's have some honesty.

I just don't want to hear anybody in DC government claim that stadium decisions have anything to do with the interest of fans and citizens. The Nats are only drawing about 5,000 more fans per game than DCU and it could be argued that DCU has more growth potential on that figure.

If the city can deny DCU's stadium, then I guess they get the best of both worlds. They get the money/status/exposure from the Nats behemoth and get to tell the people of Anacostia that they're looking out for the poor and downtrodden by denying those evil soccer developers the chance to burn down Ward 8 homes and eat their babies.

That seems like what is really going on here. Am I way off? If not, then maybe moving the team is the best solution. I don't want to see a stadium for DC United built way out next to Dulles or something. That's just not a sustainable solution for fans in DC and Maryland.

 
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