BALLSTON-VIRGINIA SQUARE

Civic Association Newsletter

April/May 1996 - Volume 19, No. 8



MAJOR LEAGUE BASEBALL INTERESTED IN ARLINGTON--UPDATE

As the Association reported in its January/February 1996 Newsletter, Arlington County is considering submitting a proposal to the Virginia Baseball Stadium Authority to develop a 45,000-seat major league baseball stadium on the "Twin Bridges site."

The Twin Bridges site is located north of Crystal City and east of the Pentagon in South Arlington. It is bounded by Old Jefferson Davis Highway and I-395/Boundary Channel Drive interchange on the west, the ramp connecting northbound I-395 to eastbound George Washington Memorial Parkway on the north, the CSX rail corridor on the east, and RF&P Corporation's AIA site on the south.

Most of the land for this site is owned by the Equitable Life Assurance Company and has been on the market for some time. Most of the rest of the land comprising this proposed site is owned by the RF&P Railroad and by the Virginia Department of Transportation. Currently, most of the land comprising this site is vacant. Approximately 2,300 to 5,000 parking spaces would be constructed on the site or adjacent properties. The stadium would purportedly use existing, non-residential, off-street parking facilities in Crystal City, Pentagon City, and the Pentagon that are available during weekday evenings, weekends, and other non-peak times.

On Tuesday, April 9, 1996, the first public forum in Arlington was held on the proposed Northern Virginia Professional Baseball Stadium located in Arlington County. This forum was held at the Gunston Community Center in South Arlington and was attended by over 200 citizens despite the bad weather. Most citizens at the meeting, who testified expressed opposition to the proposal because of concerns about cost, traffic, safety, noise, and reduced quality of life. Also, many citizens inquired about how the stadium would be financed and the potential ultimate effect on Arlington taxpayers.

For example, John Rosso, who is a member of the Arlington County Fiscal Affairs Advisory Commission, and the former President of the Arlington County Taxpayers Association, and the former Chairman of the Suffolk County Legislature, Suffolk County, New York, commented that "The cost for the construction of the Stadium is stated to be approximately $240 million. There has been no mention of the additional cost for the property. This parcel is one of the most valuable parcels on the entire East Coast. Compound that with the fact that eminent domain condemnation awards are usually held in the Courts to be that amount derived by the "highest and best use" valuation of the parcel. What will be the total package?"

Also, Mr. Rosso inquired, among other questions, that "Since Arlington County has requested the State to grant them the authority to do the eminent domain condemnation, rather than the original concept of the Baseball Authority, will the Authority be able to repay the County its costs and undertake immediate transfer? Will the County utilize County Enterprise Bonds to finance the acquisition, thus leaving the Arlington taxpayers "morally" responsible for the repayment?" Has the Stadium Authority the authorization to sell long term bonds for the amounts necessary with no obligation by Arlington, and use those funds to acquire the property rather than Arlington's bonds?" In his concluding remarks, Mr. Rosso questioned the validity of this meeting, because it was advertised that the financial package would be explained and the Officers and members of the Committee were "unwilling, or unable to respond to questions about the financial package."

On the other side, those expressing support for the proposed major league baseball stadium in Arlington, generally indicatedthey would like to see baseball return to the Washington area and boost the area's profile and economy. One citizen suggested the team be named the "Virginia Rebels." Another citizen said he expected fans to flock to the ballpark. "I can't tell you how much it would mean to me for baseball to return to this area." A Cherrydale resident commented that he wants baseball to return to this area, because most other major league sporting events are too expensive. An Aurora Hills resident, who lives about two miles from the proposed site, said fears of noise from the stadium are overblown, and thinks the proposed stadium is far enough away from the residential neighborhood to have little impact.

Because of our members' expressed interest or concerns about the proposed stadium site in Arlington, the Ballston- Virginia Square Civic Association has scheduled two hours at our next Membership Meeting on Wednesday, April 24, 1996, beginning at 7:30 p.m., to discuss the pros and cons of a proposed Major League Baseball Stadium to be located near the National Airport. This meeting will be held at the Second Floor Conference Rooms, of the Renaissance Arlington Hotel, above the Ballston Metro Station, 950 N. Stafford Street, Arlington, Virginia.

To promote a full and open discussion of the proposed Major League Baseball stadium site in Arlington, the Association has invited a representative from the Arlington County Board's appointed Ad Hoc Baseball Stadium Advisory Committee, the National Park Service; the American Association of Airport Executives; the Air Line Pilots Association; the Virginia Baseball Club; and the Presidents of the Aurora Highlands Civic Association and the Arlington Ridge Civic Association, the two civic associations most directly affected by the proposed site in Arlington. The representatives of these organizations will each have up to five minutes for opening statements to present their views on the proposed site in Arlington, followed by a total of 60 minutes of questions from our members and the general public.

In order to promote increased public participation, individual questions from the audience will be limited to 30 seconds and individual responses from the representatives will be limited to 2 minutes for each question. The first three questions for the 60 minutes session will be from BVSCA members, followed by questions from non-members or BVSCA members attending the meeting.

For our members consideration prior to the next Membership Meeting on April 24, 1996, at the Second Floor Conference Rooms, of the Renaissance Arlington Hotel, above the Ballston Metro Station, the Association has obtained background information on the proposed baseball stadium in Arlington from (1) the Ad Hoc Baseball Stadium Advisory Committee; (2) the Virginia Baseball Club on financing a major league baseball stadium in Virginia; (3) highlights of the 1996 General Assembly approved amendments to the Code of Virginia, relating to the Virginia Baseball Stadium Authority; (4) a summary of Moody's Investors Service Approach to Rating Stadium, Arena, and Convention Center Bonds; (5) a BVSCA member's e-mail about the proposed baseball stadium; and (6) various articles from the Internet Web concerning the subject of baseball stadiums.


Background Information

The following is a list of questions and answers provided by the Arlington County Board's appointed Ad Hoc Baseball Stadium Advisory Committee on April 9, 1996. This information shows that the Committee plans to hold a second public forum on April 30th, [beginning] at 7:30 p.m. in the Arlington County Board room (#307 Court House Plaza, 2100 Clarendon Boulevard, Arlington, Virginia).

Also, if the County Board decides to consider going forward with a proposed site, it will hold a public hearing on Thursday evening, May 9th, from 7:30 to 11:00 p.m., with a carry-over meeting on Saturday, May 11th (if needed).

If the County Board is to propose a stadium site, it must do so by May 15th.(The Baseball Stadium Authority plans to select a stadium site by August 15th and has set May 15th as the deadline for receipt of proposals for a site.) If you have additional questions, please provide them in writing to the Ad Hoc Baseball Stadium Advisory Committee, 2100 Clarendon Boulevard, Suite 608, Arlington, Virginia, or record them on the County's Baseball Hot Line (703) 358-7526.

MAJOR LEAGUE BASEBALL IN ARLINGTON?

Questions and Answers, Prepared by the Ad Hoc Baseball Stadium Advisory Committee, April 4, 1996

The Committee

WHAT IS THE ROLE OF THE COMMITTEE?

This Committee was created to gather information about the feasibility of constructing a Major League Baseball stadium in Arlington, to sample community sentiment about such a project, public hearing on the subject. The decision on whether or not Arlington should submit a proposal to the Virginia Baseball Stadium Authority rests with the Arlington Board.

WHO IS ON THE COMMITTEE?

The Committee is composed of two representatives each from the Aurora Highlands and Arlington Ridge Civic Associations, one representative each from the Planning Commission, Sports Commission, Civic Federation, Chamber of Commerce, the Airport Authority, the National Parks Service and seven (7) at- large members.

WHAT IS THE TIMETABLE?

The Committee will hold a second public forum at 7:30 p.m. on April 30 in the County Board room. It is scheduled to make its report to the County Board at a work session on May 8 and to distribute its final report on May 9. If the County Board decides to consider the matter, it will hold a public hearing on either May 11 or May 14. If it then decides to propose a site to the Stadium Authority, the proposal will be submitted on May 15. The Stadium Authority plans to announce its decision in mid-August.

WHY ALL THE RUSH?

The General Assembly and the Stadium Authority have established schedules that rest on the perception that a Major League Baseball franchise may be available for purchase within the year. The Stadium Authority has set May 15 as the deadline for jurisdictions to propose possible sites. Its timetable calls for ground to be broken next spring and the stadium to open in 1999.

WILL MAJOR LEAGUE BASEBALL COME TO NORTHERN VIRGINIA?

The possibility is better now than it has been in the past. Virginia Baseball L.C., an organization of Virginia investors, finished third in the bidding last year for two expansion franchises. Its leaders believe that if the site for a new stadium has been selected and a means of financing its construction are in place they will get a franchise in the next round of expansion. They also believe they may be permitted to buy the Houston Astros franchise and move it next fall; they came close last fall.

IF BASEBALL COMES, WHEN WILL IT COME?

If Virginia Baseball gets an expansion franchise, play would probably begin in 2000. If it is able to buy an existing franchise next fall, the team would play in RFK until a new stadium is ready, in possibly, 1999.

WHY BUILD A NEW STADIUM WHEN RFK SITS UNUSED?

Major League Baseball considers the District of Columbia part of the geographic territory of the Baltimore Orioles; it doesn't think that way about Northern Virginia. Virginia Baseball's spokesman says RFK can't be renovated to provide the luxury boxes (sold to corporations, etc., at very high prices) which are a key to the financial viability of baseball teams.

The Proposed Stadium

WHO DECIDES WHERE THE STADIUM IS LOCATED AND WHO BUILDS IT?

*The Baseball Stadium Authority, created by the General Assembly, is charged with selecting a site, negotiating a lease with a baseball team, and building the stadium. It is composed currently of seven members appointed by the Governor, four from Fairfax and three from Loudoun. The law required that four of the Authority's members come from the jurisdiction in which the stadium is to be built.

WHAT HAPPENS IF MAJOR LEAGUE BASEBALL DOESN'T COME?

The stadium doesn't get built. The Stadium Authority cannot proceed much beyond site selection until it has a firm commitment from an organization holding a Major League Baseball franchise.

WHO PAYS FOR THE STADIUM?

Almost all of the stadiums built in recent years have been financed through a combination of public funds, stadium rentals, parking receipts, and fees paid by the franchise holders. The General Assembly has passed legislation granting to the Stadium Authority the proceeds of the state's 3.5% tax from sales at the stadium. The General Assembly has also authorized the Stadium Authority its 1% of the sales tax on those same sales and the proceeds of any admission tax it imposes on tickets. (Arlington has never used its existing power to impose a 10% tax on admissions.) The General Assembly also created a special committee, of which County Board Member Ellen Bozman is a member, to recommend a financing plan by July 1.

HOW MUCH WOULD A STADIUM COST ARLINGTON? The jurisdiction in which the stadium is located will undoubtedly be expected to contribute something but how much depends on the financing package put together by the General Assembly. If the stadium is built in Arlington, the County will receive increased revenue from the several taxes but would lose revenue from property tax. The stadium would belong to the Stadium Authority and be tax-exempt. The Ad Hoc Committee has requested, but not received, an analysis of costs and revenues. The Stadium Authority is requiring jurisdictions that propose sites to pay a fee of $150,000 for each site; it says it may credit against that fee what the jurisdiction has spent in evaluating possible sites.

HOW ARE STADIUMS FINANCED ELSEWHERE? Five new baseball stadiums have been built in the 1990s. The public portion of their financing was: Baltimore, special sport lotteries; Denver, 0.1% regional sales tax; Cleveland, increases in local sales, liquor, and cigarettes taxes; Texas, a sales tax increase and a $1 per ticket surcharge; Chicago, a state grant and an increase in the hotel tax.

The Twin Bridges Site

WHY THE SUDDEN INTEREST IN TWIN BRIDGES AS A SITE?

After several owners of Major League Baseball teams toured the sites proposed in western Fairfax and Loudoun Counties last fall, they told the investors in Virginia Baseball the sites were too far from the area's core population and too far from mass transit. In addition, Virginia Baseball realized that those sites create the possibility of massive traffic jams as tens of thousands of people try to reach them between 6 and 7 p.m. Apparently because of these developments, Loudoun and Fairfax officials have abandoned all but one of the sites previously considered and now are being asked by a member of the Stadium Authority to abandon that one. As a result, Fairfax officials are scrambling to evaluate a recently identified site on property occupied by a GSA warehouse near Franconia. One other Fairfax site is still being discussed--the Engineering Proving Ground near Fort Belvoir. Stafford County may propose a site along I-95 north of Fredericksburg.

IS THE TWIN BRIDGES SITE LARGE ENOUGH FOR A STADIUM?

According to the firm that designed Camden Yards in Baltimore and the new or proposed ball parks in Cleveland, Chicago, Denver and San Francisco, the site is big enough to hold a stadium but not much else. (About 5 acres of additional site area would be required from adjacent properties owned by the RF&P, VDOT and a storage facility. The total site area for the stadium would be about 11-12 acres. The Twin Bridges site is 7 acres.)

WHO OWNS THE TWIN BRIDGES SITE NOW?

Most of the land is owned by the Equitable Life Assurance Company and has been on the market for some time. Most of the rest is owned by the RF&P Railroad and by the Virginia Department of Transportation.

WHAT IS ON THE LAND NOW?

Most of the land is vacant. Equitable has an approved site plan which permits a 10-story hotel and two 7-story office buildings on the site.

WOULD A STADIUM CREATE A SAFETY HAZARD FOR NATIONAL AIRPORT?

The proposed site in between the "clear zone" beyond the ends of National's two runways in which building is forbidden or sharply limited. It is subject to restrictions imposed by the Federal Aviation Administration. The Committee has asked the FAA to evaluate the impact a stadium would have on airport safety but have not received a reply. The Airport Authority has expressed serious reservations about the site partly out of safety concerns and partly out of concern about the impact of airplane noise on spectators and players. The Air Line Pilots Association also has reservations about the construction of a stadium at this site and has asked for more information. The stadium's tallest elements, lights, would be 14 feet higher than the already approved office building.

WHAT ABOUT AIRPLANE NOISE IN THE STADIUM?

While few, if any, airplanes would pass directly over the proposed stadium, about 50 jet operations would pass near the stadium during a game. On the noise exposure map presented by the Airport Authority, the site is projected to have noise levels in 1999 that are marginally acceptable for stadiums and spectator sports. Outgoing planes create more noise than incoming ones; on average, outgoing plans would fly by this site during 36 or so of the 80 to 82 games played each year.

WHAT ABOUT TRAFFIC AT THIS SITE?

The site is adjacent to I-395 and has access to a highway network built to accommodate rush hour traffic. The traffic consultant hired to evaluate this site has concluded that while a stadium would have a "noticeable" impact on traffic, the impact would be "manageable." For games on weekday nights, he projects that 80% of the stadium-bound traffic would be moving in the opposite direction from rush hour traffic. His preliminary report indicates that the highway construction required off-site would be: the Boundary Channel ramps to I- 395, on Jefferson Davis highway from Crystal City to the proposed site, and, perhaps, on the approach roads to the Pentagon parking lots.

WHAT ABOUT TRAFFIC ON NEARBY STREETS?

This depends on two factors: what percentage of the spectators who come by car and where parking is available. In other cities, the use by spectators of public transportation ranges from 60% at Yankee Stadium in New York to 0% in Anaheim, CA. The traffic consultant has presented a low-transit study based on only 14% of the spectators using Metro rail or buses and a high-transit study based on 33% use them. (About 25% of those attending Redskins games use Metro.) His preliminary conclusion is that there would be serious traffic problems on one nearby street--Jeff Davis Highway--but that would occur only if the Pentagon took action to bar stadium parking on its lots and then only on weekends. The traffic report is not yet complete.

WHAT ABOUT PARKING?

There are now in existence, excluding the Pentagon's lots, 13,500 parking spaces within a mile of the site, 22,100 spaces within a 1 1/4. The Pentagon's lots contain 9,700 spaces, more than half of which are now open for public parking after 1 p.m. We do not know yet how many of this total--23,000 spaces within a mile--would be available for use by those going to the stadium. How many spaces would be needed depends on how many people will use Metro. The traffic consultant puts the range from 9,500 spaces (if 33% use Metro) to 12,500 (if only 14% use Metro).

Some parking spaces would have to be provided on the stadium site or on the North tract. The minimum would be enough for the teams and the handicapped. Additional spaces could be provided on the North tract or, with the Pentagon's concurrence, by building a parking structure on one of its lots that snuggles up to I-395. We are exploring the Pentagon's attitude towards leasing part of its lots to provide paid stadium parking; it currently leases some spaces to a commercial parking company.

The number of parking spaces provided at other Major League stadiums varies widely. Camden Yards has 5,000 spaces of its own and claims there are another 44,100 within walking distance. Anaheim, which reports no public transportation available, provides 12,000 spaces. Yankee Stadium in New York has 2,500 spaces of its own with 5,000 spaces available in the neighborhood. Houston provides 30,000, Dodger Stadium in Los Angeles 16,000. RFK has 12,500 for a stadium about 10% larger than this one would be.

WHAT ABOUT PUBLIC TRANSPORTATION?

There are three Metro rail stops within a mile of the site and at least three Metro bus stops within a few hundred yards. Trains reach those stations on three different lines thus spreading the crowd in three directions. Substantial improvements in the sidewalk network, perhaps including some pedestrian bridges, would be required. The RF&P tracks on which the Virginia Railway Express operates pass within a few yards of the stadium; there is a VRE station in Crystal City.

Impact on the Community

WHAT ABOUT THE IMPACT ON NEIGHBORHOODS?

The consultant claims that with good traffic management almost all stadium related traffic could be kept off neighborhood streets. He notes than an expansion of the hours of zone parking could be used to discourage spectator use of those streets. The nearest residential streets are slightly more than a mile from the site. The Committee is seeking information on whether stadium-generated noise would be problem in neighborhoods. The stadium would, of course, have an impact on traffic and parking in the business sections of Crystal City and Pentagon City; how much depends on where the parking is located.

WHAT ARE THE ECONOMIC AND SOCIAL PLUSES AND MINUSES?

The Committee is still in the process of gathering data on the economic impact. It has not yet discussed the social impact. It is already clear, however, that some people think a stadium would be a major community asset and others think it would be highly detrimental to community life.

WHAT ABOUT A STADIUM'S IMPACT ON THE ENVIRONMENT?

That's one of the things the ommittee is looking into. It seemed advisable to collect the data on those aspects of a stadium that might have an impact on the environment--crowd size, volume of traffic, parking areas, etc.--before trying to figure out what the impact would be.

"FINANCING A MAJOR LEAGUE BASEBALL STADIUM IN VIRGINIA: The Commonwealth's Number One Economic Development Prospect"

By the Virginia Baseball Club January 1996

Why the Sense of Urgency in 1996?

Introduction:

In March, 1995, Major League Baseball (MLB) awarded two first-round expansion franchises, one to Tampa-St. Petersburg, FL, and another to Phoenix, AZ. First-round teams will begin play in 1998; MLB also plans a second-round of expansion scheduled to begin play in the year 2000.

The keystone of the Tampa-St. Petersburg area bid was a finished stadium - the "Thunderdome" - built in 1990. Also, some two years before the expansion process began, the City of Phoenix, Maricopa County and the State of Arizona jointly made a commitment and worked together to enact a financing plan for construction of a new $300 million domed stadium. The Tampa Bay area had been seeking a MLB franchise for more than a dozen years; the Phoenix area group had been through a prior expansion process (without a stadium financing plan) and lost when the cities of Miami and Denver were awarded franchises. For the record, Miami already had Joe Robbie Stadium in place and Denver had a facility for interim play (Mile High Stadium) and a comprehensive stadium financing plan in place (which resulted in the construction of Coors Field).

Both Tampa-St. Petersburg and Phoenix, having been through the MLB expansion process before, learned a key lesson from prior experience: the critical element in securing a MLB franchise is having a stadium commitment. Second only to having a stadium already built is having a legislatively-enacted plan to finance a stadium in place. According to USA Today, the Virginia Baseball Club (VBC) group came in a close third in the first-round expansion process. MLB insiders have been quoted as saying that the VBC group stands an excellent chance at being awarded a second-round expansion franchise; also, it has been reported that if Virginia were to be given a franchise it would likely be a National League team.

Seven months later -- in October, 1995 -- VBC reached an agreement in principle to acquire the Houston Astros and to relocate them to the State of Virginia; unfortunately, the agreement was not approved by the Executive Council of MLB. According to VBC Chairman and CEO, Bill Collins, "...VBC's 'Achilles heel' was the lack of a permanent stadium...or even a commitment to enact a stadium financing plan."

Why the Urgency?

That brings us to 1996 and why it is so important that our elected representatives and leaders in Richmond to make a commitment to address the pressing issue of stadium financing during this legislative session.

Once the 1996 baseball season begins, the City of Houston has just weeks to prove the Astros can be a financial success there. Astros' fans have been asked to nearly triple the number of season tickets sold and to double overall attendance over 1995 levels. If not, by mid-summer the Astros can be made available for sale to out-of-city ownership groups, such as the VBC. The city and/or state which has a stadium financing plan in place by late summer of 1996 will have the obvious advantage in the outside competition for the Astros franchise.

The Houston Astros may be put up for sale and relocation this summer; and MLB may solicit applications for the second round of expansion by autumn. Thus, by the Fall of 1996, the Commonwealth of Virginia will find itself in an intense competition with the City of Orlando, FL, the State of North Carolina -- to name a few -- and even such exotic places as Mexico City for the next available MLB franchise. This could be the year that Virginia -- the most populous state in the Union without a big league sports franchise -- secures a Major League Baseball team; or it could be the year Virginia loses both the Astros and/or the next expansion franchise to another locale. Such a loss will mean that Virginia is destined to remain the most populous state in the Union without a major league sports team. That is why there is a sense of urgency about the 1996 legislative session: The Commonwealth of Virginia needs -- at the very least -- to enact a framework for a stadium financing plan. That plan needs to be in place by the Fall of 1996 in order for Virginia to effectively compete with other locales for a Major League Baseball franchise. If MLB owners are to agree to the sale and relocation of the Houston Astros, or to awarding a future franchise to Virginia during the second-round expansion process, the stadium financing plan must be in place by the Fall of this year.

Virginia Baseball Club (VBC):

The Virginia Baseball Club was formed in August, 1994, for the purpose of securing a Major League Baseball expansion franchise in the Commonwealth of Virginia. The VBC ownership group is currently comprised of some two dozen investors chaired by William L. Collins, III who is President and CEO of Metrocall, Inc. Other VBC General Partner members include: Mark Warner, President Columbia Capital, former Virginia Democratic Party Chairman and current U.S. Senate candidate ; Russell Ramsey, of the investment banking firm of Freidman, Billings & Ramsey; The Carlyle Group, represented by Richard Darman; John P. Collins, Chairman, Heritage Auto Plazas; James Speros, Chairman of the Baltimore Stallions Football Club; Bernard Swain, Chairman & partner, The Washington Speakers Bureau; and Steve Leeolou, COO, Vanguard Cellular Systems.

The entire VBC group of general partners and limited partners is comprised predominantly of Virginia residents who have deep taproots in the State. The vast majority reside in Virginia and operate their businesses here. Thus, as Collins has consistently stated, any franchise secured by the VBC would be situated in Virginia and would be known as a "Virginia" team.

The MLB Expansion Process:

In late 1994, MLB's Expansion Committee Chairman, John Harrington of the Boston Red Sox, publicly stated the intention of MLB to add four new franchises by the turn of the century, with two new first-round expansion teams to begin play in 1998 and two second-round expansion franchises tentatively scheduled to begin play in the year 2000. Although the Virginia group was formed in the midst of the 1994-95 expansion application process, it was widely acknowledged in baseball circles and in the sports media that the VBC group had come a long way in a short time -- making a strong showing during the first-round expansion process -- and is currently considered by many MLB owners and baseball insiders to be "next-in-line" for a second-round expansion franchise if the question of a permanent stadium plan is resolved.

Acquisition & Relocation: Following MLB's decision on first round expansion awards, Bill Collins stated publicly that the VBC was in the "acquisition mode." He traveled extensively within baseball, meeting with league officials and team owners -- looking for a franchise to purchase and relocate. His discussions with baseball insiders led him to talks with Drayton McLane, owner of the Houston Astros, during the late summer. Some twelve weeks later, in October, 1995, it was revealed that VBC had negotiated an agreement in principle to purchase the Astros and to relocate them to Virginia for the 1996 season. Had the agreement been approved by MLB owners, the new Virginia team would have played in RFK Stadium on an interim basis.

Newspapers have reported that the VBC expected to pay between $150-$160 million in order to secure the Astros for relocation to Virginia. What the newspapers did not reveal is that each year the team had to play in RFK Stadium (awaiting a permanent Virginia stadium) the team expected to suffer tens of millions in net operating losses.

Although MLB rules (protected by the sport's unique anti-trust exemption) did not permit McLane and Collins to sign an agreement until approved by the owners; a mutually agreed-to price for the purchase of the Astros was negotiated. Ironically, no MLB franchise has relocated since 1971 when the Washington Senators moved to Dallas-Ft. Worth, TX. There were few rules and regulations governing franchise relocation in 1971; however, during the ensuing quarter-century relocation guidelines have been issued by MLB's Executive Council.

According to media reports, MLB officials have indicated that the Astros ownership did not adhere to the existing relocation protocols -- including a public offering of the team for sale to local investors. Because the current rules were not strictly adhered to, and due to the now-lengthy relocation process required -- which includes the appointment of a Relocation Committee -- time would not permit MLB's consideration of the Astros sale and relocation to Virginia for the 1996 season. For these reasons, Drayton McLane temporarily withdrew his request to sell and relocate for the 1996 season; if Houston's support for the Astros continues to be lackluster, McLane is expected to re-file during 1996 for a sale and relocation before the 1997 season.

On January 9, 1995, National League President Leonard Coleman stated in the Houston Chronicle that if the City of Houston did not support the Astros in 1996, MLB could not let a team remain in any city indefinitely and continue to lose money. When specifically asked, Coleman would not rule out a sale of the Astros to VBC and a relocation of the franchise to the Virginia market for the 1997 season if Houston failed to adequately support the team in 1996.

Public Funding of Baseball Stadiums: No baseball facility in the nation has been built without the use of public funding. Only one stadium -- built thirty years ago -- Dodger Stadium in Los Angeles (formerly known as Chavez Ravine), was built predominantly with private funding.

In the last several years new baseball stadiums have risen: Comiskey Field in Chicago, The Ballpark at Arlington (TX), Baltimore's Ballpark at Camden Yards, The Thunderdome in St. Petersburg, Cleveland's Jacob's Field, and Coors Field in Denver. All have been constructed primarily with public funds. In the past year, plans have been announced for new baseball stadiums in Boston, Detroit, Milwaukee, New York, Philadelphia Pittsburgh, San Francisco and Seattle. All but the newly-announced Giants Stadium will be heavily reliant upon public funding.

Public funding of a stadium is a necessary requirement if MLB is to come to Virginia, especially since the VBC ownership group is expected to have to pay a record price to acquire and relocate to Virginia the first MLB franchise to move in 25 years.

A "Blueprint" for MLB in Virginia:

During the last 18 months Bill Collins has met with some 25 of the 30 MLB owners. What has emerged from these candid sessions amounts to a "blueprint" for successfully securing a MLB franchise. The "blueprint" lays out the six important steps that a consensus of MLB owners believe are necessary to successfully secure an expansion or relocation franchise. Before MLB owners would seriously consider any area of the country for a new expansion franchise or relocation of an existing team, the following "commitments" must be in place:

  1. There must be a singular, strong and financially- secure ownership group in place;
  2. Second, the "host" city and/or state must authorize a stadium board with the mandate to site, build and finance a new stadium -- with powers to issue the bonds necessary to finance the construction of the stadium;
  3. A realistic plan of finance for construction of a new stadium as well as to satisfy the annual debt service coverage on bonds must be in place;
  4. An economically-viable lease between the stadium authority and the team must be negotiated;
  5. A final site for the new ballpark must be selected and secured; and,
  6. Any interim-use stadium lease must be "locked- in" for play (during construction of the permanent ballpark).
SUMMARY: Where Are We Now?

STEP ONE: The VBC Ownership Group:

The Virginia Baseball Club has demonstrated its ability to thrive -- growing larger and financially stronger as time goes -- during both the expansion and now the acquisition and relocation process. The group has not only stayed together despite setbacks, but has gained strength with the addition of key new investors. The Virginia Baseball Stadium Authority has already passed a resolution granting VBC "exclusive" rights for a specified period of time to negotiate a stadium lease with the authority. Step One of the "blueprint" is in place.

STEP TWO: The Virginia Baseball Stadium Authority (VBSA):

The 1995 session of the Virginia legislature enacted into law a bill creating the Virginia Baseball and giving it the mandate to site, build and finance a new ballpark. Governor Allen immediately appointed eight of the nine board members authorized in the legislation. The VBSA has organized itself into three committees, charged respectively with MLB liaison, stadium siting, and finance. As of this writing, the Authority has secured legal counsel, and has submitted legislation- designed to finance a baseball stadium in Virginia. Step Two of the "blue print" is in place.

STEP THREE: The Stadium Financing Plan:

Step Three. Here is where we are today:

Now is the appropriate time to study, discuss, debate and enact a realistic plan to finance the new Virginia baseball stadium. However, if legislation is not enacted during the 1996 session, or if a financing plan is not agreed to by the legislature by the Fall of 1996, decisions may be made by MLB owners which could preclude a Virginia franchise.

STEP FOUR: The Stadium Lease:

The VBC ownership group has indicated its readiness to negotiate key lease terms including rent, operations and maintenance responsibilities and other terms, so the VBSA will know ahead of time its stadium revenue streams. Step Four. VBC is ready to negotiate a new stadium lease.

STEP FIVE: The Final Stadium Site:

As of this writing, the VBSA has accepted four stadium sites for consideration, three from Fairfax County and one from Loudoun County. In addition, the Arlington County has submitted a letter of intent to submit at least one site for VBSA consideration. Additional sites may come to light through the RFP process. If the VBSA selects a final site by July, 1996, all that is required of the host state would be in place. Step Five. A final stadium site should be selected as soon as legislation committing to a stadium financing plan is enacted.

STEP SIX: The Interim Stadium and Lease:

MLB will not allow a relocated team to play ball in RFK Stadium for an extended period of time. At best, RFK may serve as an interim venue for MLB. Any team can be expected to lose money while operating at RFK, due to the lack of luxury seating accommodations. The VBC group had negotiated an interim lease with the District of Columbia Sports Commission board for the 1996-97 seasons with option years, if necessary. It is believed that this interim lease could be put in place in a matter of days. Should VBC be awarded an expansion franchise for play in the year 2000, the team could by-pass RFK and begin play in a state-of-the-art, open air grass field in Virginia. Step Six. VBC has already had discussions with the DC Sports Commission regarding an interim lease.

VIRGINIA'S #1 ECONOMIC DEVELOPMENT PROSPECT:

Economics Benefits of a Major League Baseball Team and Stadium in the Commonwealth of Virginia; Source: Economic Benefits Analysis for a Major League Baseball Team in the Commonwealth of Virginia-Final Report-KPMG Peat Marwick.
  1. Total economic benefits for Virginia could approach $133 million annually, while the design and construction impact for 24-30 month period is estimated at $183.4 million in additional new spending over the construction period.
  2. The estimate of annually recurring job impacts are 1,790 new jobs and an additional 1,940 new jobs during the construction phase.
  3. The Commonwealth would receive over $7.7 million in new tax revenues from the ongoing operations of the team, the stadium and other businesses. The tax impact of construction would be approximately $3.4 million over the two year construction period.
  4. The tangible and intangible benefits of having a Major League Baseball franchise in Virginia are enormous. That is why states and cities compete so vigorously for them:
  5. A Virginia Major League Baseball franchise is the #1 economic development issue of this legislative session of the General Assembly.


VIRGINIA BASEBALL STADIUM AUTHORITY LEGISLATION--UPDATE

In the February/March 1996 Newsletter, the Association reported it had researched applicable 1996 legislation concerning the Virginia Baseball Stadium Authority and had identified two legislative initiatives proposing significant changes to the Authority. These initiatives are Senate Bill 541 Baseball Stadium Authority and House Bill 1502 Baseball Stadium Authority. Senate Bill 541 was patroned by Senator Richard L. Saslaw, the Democratic majority leader in the Virginia Senate; and co-sponsored by Senator Janet Howell (D) representing part of Arlington County and Fairfax County, and Senators Hawkins (R), Potts (R), Quayle (R), Waddell (D), and Woods (R). House Bill 1502 was patroned by Delegate Vincent F. Callahan, Jr. (R), representing part of Falls Church and Mclean; and co-sponsored by Delegate James F. Almand (D), representing part of Arlington County and Fairfax County, and Delegate Karen L. Darner (D), representing South Arlington, and other delegates.

Also, it was noted in the February/March 1996 Newsletter, that BVSCA President Ragland had reviewed these two legislative initiatives (Senate Bill 541 and House Bill 1502) on the General Assembly home page and had determined that the proposed changes in the Senate bill were substantially the same as the proposed changes in the House bill, except that the House bill proposed two additional significant changes. The House bill eliminated the prohibition on using state funds to pay the salary of the executive director of the authority; and granted the right to acquire by eminent domain any real property which it may deem necessary for the purposes of acquiring a site for a stadium.

Specifically, the proposed changes stated, under Section 15.1-227.77. Acquisition of property. Subsection D. The Authority shall have the right to acquire by eminent domain any real property, including fixtures and improvements, which it deems necessary for the purposes of acquiring a site or sites for a major or minor league baseball stadium, offsite utilities, parking lots or garages and any other items related to the construction and operation of a stadium. The Authority may exercise the power of eminent domain pursuant to the provisions of Chapter 1.1 (25-46.1 et seq.) of Title 25 enacted for the exercise of the power of eminent domain by a county, city or town.

Since the February/March 1996 Newsletter, both bills were modified in the same form and conference reports were agreed to by House (80-Y, 18-N) and by Senate (40-Y, 0-N). The Speaker of the House signed House Bill 1502 and Senate Bill 541 on March 26, 1996 and March 27, 1996, respectively. The President of the Senate signed House Bill 1502 and Senate Bill 541 on March 28, 1996 and March 29, 1996, respectively.

According to the General Assembly home page, Senate Bill 541 Baseball Stadium Authority, ("http://www.state.va.us/dlas/- ses19961/sum/sb541.htm") was not received from the Governor by Senate until April 10, 1996; and likewise, House Bill 1502 Baseball Stadium Authority, (same url address as the Senate Bill 541 with "...sum/hb1502.htm") was not received from Governor by House until April 10, 1996. The receipt of both bills by the Governor occurred after the 1996 General Assembly had adjourned; therefore, the Governor has 30 days to act on the bill.

A review of both bills shows that they are identical in form. However, one should note that the eminent domain language has been significantly changed from the original language in House Bill 1502, which provided under Section 15.1-227.77. Acquisition of property. Subsection D, that: "The Authority shall have the right to acquire by eminent domain any real property...." The original Senate Bill did not grant the Authority or any county, city or town the power to acquire by eminent domain any real property,..., which it deems necessary for the purposes of acquiring a site or sites for a major or minor league baseball stadium.

In contrast, the approved House and Senate bills state under this Subsection D, that "Any county, city or town shall have the power to acquire by eminent domain, in the manner and in accordance with the procedure provided in Title 25 of the Code of Virginia, any real property, including fixtures and improvements, and personal property, including any interest, right, easement, or estate therein, located within such locality for public purposes. For purposes of this section, public purpose means the construction and operation of any facility, as defined in Section 15.1-227.70, when determined by the governing body of such locality that the construction and operation of such a facility would enhance the economic development, resources, or advantages of the locality. In furtherance of this public purpose, the locality may convey any such real property, including fixtures and improvements, and personal property acquired pursuant to this section to the Authority, by sale, gift or lease, upon terms mutually agreed upon by the Authority and the locality. The Authority and locality may enter into agreements regarding the initiation and prosecution of such condemnation proceedings, including payment and reimbursement of any costs, fees, expenses, or awards resulting from the proceedings. Upon the written request of the Authority, the county, city or town in which the stadium site is proposed may, by majority vote, exercise its power of eminent domain as provided herein."



Return to the April/May 1996 Newsletter- Index


The BVSCA Home Page