Talks Fall Apart On Stadium for D.C. Soccer Team

By David Nakamura
Washington Post Staff Writer
Saturday, July 21, 2007; A01

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.

Mayor Adrian M. Fenty's administration had been negotiating for months with D.C. United's principal investor, real estate magnate Victor A. MacFarlane, over the team's proposal to build a 27,000-seat stadium in Ward 8, just across the Anacostia River from the Washington Nationals' new ballpark.

But 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.

Administration officials have decided to look at other options for the site, which is part of a 110-acre piece of federal land known as Poplar Point that is scheduled to be transferred to the District in the fall. The city will seek proposals from interested developers over the next two months, the sources said, with the focus on housing and retail. A soccer stadium still could be part of the mix but is not a top priority, the sources said.

Verizon Center, the downtown indoor sports arena, has been credited with playing a key role in the revitalization of its neighborhood; the economic impact of soccer stadiums appears less understood. D.C. United's attendance has averaged about 17,000 a game over the years.

During the negotiations, D.C. United officials suggested they would consider moving to Maryland or Virginia, possibly the Baltimore or Loudoun County areas, if the District was unable to help build a new stadium, the sources said. United plays at 46-year-old RFK Stadium and had hoped to have a new facility by 2009 or 2010.

"We're keeping our options open," said Julie Chase, a spokeswoman for MacFarlane. "We need a new stadium somewhere in the D.C. area. I can't put parameters on that."

Fenty's spokeswoman, Carrie Brooks, said in a statement last night: "Poplar Point represents a once in a lifetime development opportunity for the District of Columbia. A competitive process for the disposition of this land could provide the District with great ideas on how best to meet city objectives that include workforce development, affordable housing, great parkland, and sustainable development."

D.C. Council member Jack Evans (D-Ward 2), who championed the publicly funded $611 million baseball stadium, said of United: "It would be very unfortunate if they left the city. The stadium was a good idea, but the question was always who would pay for it. . . . I can understand their frustration, because they were led to believe the city very much was trying to make this happen."

Evans said another option that had been discussed is construction of a soccer stadium next to RFK, which would then be torn down.

Administration officials consider Poplar Point to be a unique development opportunity: a massive waterfront property in the city's poorest ward. But deciding what to do with the land has been the subject of much discussion.

Council member Marion Barry (D-Ward 8) has supported the stadium, but residents have been divided. Some agreed that the stadium would help bring new investors and opportunity; others voiced concern that it would not include affordable housing and jobs for residents.

Then-Mayor Anthony A. Williams (D) backed the stadium, but Fenty had been noncommittal. MacFarlane, a wealthy San Francisco real estate investor, bought United in January and pledged to work with Ward 8 to build a mixed-use development.

MacFarlane pledged to build a youth athletic field in Ward 8 and has attended numerous community meetings. He and other team officials are scheduled to attend D.C. United Family Fun Day tomorrow at Ketcham Elementary School on 15th Street SE, an event that was billed as a way to "publicly share the club's vision for a stadium at Poplar Point."

United President Kevin Payne declined to comment through a spokesman.

The team is the most successful franchise in Major League Soccer history, having won four league titles in 11 seasons.

Since 1999, MLS teams in Dallas, Denver, Los Angeles, Chicago, Toronto and Columbus, Ohio, have moved into new medium-sized facilities. The New York and Salt Lake City clubs have also broken ground on new facilities.

"We have put forth a very expansive plan that obviously addresses the needs of the soccer team and the soccer fans," Chase said. "We have also been addressing the needs and wants in Ward 8, where people are interested in improved community opportunities, retail and jobs."

Staff writers Steven Goff and Martin Weil contributed to this report.

And, then one day later.......

http://www.wtop.com/?nid=596&sid=1196718

D.C. United Not Backing Out of Stadium Plans
July 22, 2007 - 6:26pm
Derek Williams, WTOP Radio

WASHINGTON - D.C United is speaking out on its stalled plans to build a new soccer stadium in Southeast.

Team President Kevin Payne tells WTOP Radio the proverbial ball is now in the city's court.

He admits the city has told the team it might seek competitive offers from other developers for the prime piece of land known as Poplar Point, where D.C. United wants to build its new stadium.

"Obviously we would prefer that they say let's negotiate a deal, but as long as the competitive solicitation makes sense from our point of view, then we want to continue with the city." said Payne. "We really have been bad negotiators, we've said we don't want to leave, this is where we want to be."

The team would pay for the stadium, but they want the city to cover roads, sewer and other infrastructure costs.

"This isn't about greedy team owners. Of course we need a stadium," said Payne. "We can't continue to function as a business at RFK stadium. End of story."

The team hosted a community festival on Sunday and gave out t-shirts reading, "Promises made, Promises Kept."

The team's lead investor Victor MacFarlane said that a new stadium for 2009 is out of the question. He's urging Mayor Fenty to get the ball rolling so that the stadium could be ready for the 2010 season.

"In order to make the 2010 season, we need to be moving forward at the end of this month."

The team and the city will continue talks this week to move the team from RFK, and finally break ground on their proposed stadium.

Here are the renderings for the proposed new DC United soccer stadium. It is actually a pretty impressive 27,000 seat structure as envisioned.

I had hoped that we would avoid the drama that once surrounded the baseball stadium deal. Nope.

Go to this website to see detailed renderings of the new stadium:

http://dcunited.mlsnet.com/t103/stadium/poplar_point/
Click on "View photo gallery" on the website

http://farm2.static.flickr.com/1154/873675632_1aed544ebb_o.jpg
Proposed DC United soccer stadium

I hope it gets built. Is the main thing finding a reasonable amount of subsidy for the surrounding infrastructure?

I've been reading news reports from most of the news agencies, and I've got to say that they have been leaving out or do not understand key pieces of what is going on with this Poplar Point proposal.

The primary owner of the DC United team is a real estate developer. I've suspected all along that the soccer stadium is not the main driver in what this developer, Victor MacFarlane, wants to do. He wants the city to pay for the infrastructure improvements to the entire 100-acre Poplar Point site. This is not just for the stadium, this is for the entire site. And, Mr. Victor MacFarlane also wants the city to let him control the ENTIRE 100-acre parcel.

The DC United owner is not in this just to build a soccer stadium. He wants to profit from the land surrounding the proposed stadium. He wants the city to make him the exclusive developer for the ENTIRE site.

If we were just talking about DC United wanting to carve out a 15-acre parcel of land and just developing that for the stadium, the infrastructure costs would not be the $200 million they are talking about today.

I have not seen one major news agency report this in a way that is fully detailed or accurate.

I suspect the DC United team will not back down from trying to control the entire Poplar Point parcel of land. In fact, I believe the prospects of all this development potential is what drove Mr. Victor MacFarlane to even invest in the team. The actual team itself is an afterthought as far as he's concerned. He is a real estate developer. Work with me here - I'm speculating all of this. The DC United owners are in it for this particular land, and they'll fight for it for a long time if they have to. Another speculation!

Here's the twist. Victor MacFarlane also happens to be a very sucessful real estate developer. He is asking the city to commit $200 million, right now, to upgrading infrastructure to the entire Poplar Point site. He is also saying he will take care of developing the entire site after this $200 million is commited. This is a standard thing of covering the infrastructure that cities do to leverage development in their city. We're talking at least a $1.5 billion development. DC will have to do this anyway if they ever want to see Poplar Point developed anytime soon. Are they ready to commit? Because if the city isn't, then be prepared for Poplar Point to sit in an undeveloped state for the next decade while DC officials spin their wheels in the mud over it.

This is a huge test for the Fenty team, especially Neil Albert and his Deputy Mayor's Office of Planning and Economic Development. Either DC grows the balls to do this NOW, or it will be business as usual for DC government bureaucracy. Even if they choose another developer for this site, they'll still have to spend the $200 million on infrastructure costs.

So now or later? $200 million from the city to leverage a possible $1.5 to $2.0 billion development that a successful developer wants to spend? What is your bet?

I really do home DC goes for it at some point and helps this thing get built. Soccer is the future, and the renderings look amazing; much better than the new Nationals stadium. Not to mention that this would be a great catalyst for other development in Anacostia.

However, its not just a question of DC "growing some balls". On one hand, our city officials know a new DC United stadium will have a a positive economic development impact on the city. On the other hand, they know that we already have the highest municipal debt in the country, working out to be around $10,000 per person. DC's CFO, Natwar Ghandi keeps telling DC to cut the spending and borrowing lest we harm our financial standing on Wall Street (http://www.washingtonpost.com/wp-dyn/content/article/2007/06/20/AR2007062002299.html)

Considering the things Gandhi has done for our city, like reversing our low bond rating and turning DC's debt into surplus, I think his words should be given some credence. Perhaps it would be wise to wait a few years until our tax base expands a bit, allowing us to take on a few more megaprojects without resorting to issuing bonds like there's no tomorrow?

I'd hate to see the project fall apart as well, but I can tell you if they have to temporarily use M&T Bank stadium in Baltimore while they figure things out I'll be first in line for season tickets! M&T would be 100x better than RFK to watch soccer (and I'm not just saying that because I could walk to the games) although its definitely too large as a long term solution.

I really do home DC goes for it at some point and helps this thing get built. Soccer is the future, and the renderings look amazing; much better than the new Nationals stadium. Not to mention that this would be a great catalyst for other development in Anacostia.

However, its not just a question of DC "growing some balls". On one hand, our city officials know a new DC United stadium will have a a positive economic development impact on the city. On the other hand, they know that we already have the highest municipal debt in the country, working out to be around $10,000 per person. DC's CFO, Natwar Ghandi keeps telling DC to cut the spending and borrowing lest we harm our financial standing on Wall Street (http://www.washingtonpost.com/wp-dyn/content/article/2007/06/20/AR2007062002299.html)

Considering the things Gandhi has done for our city, like reversing our low bond rating and turning DC's debt into surplus, I think his words should be given some credence. Perhaps it would be wise to wait a few years until our tax base expands a bit, allowing us to take on a few more megaprojects without resorting to issuing bonds like there's no tomorrow?

This is not just about a stadium, this is about the entire Poplar Point site. The stadium would take up maybe 15 acres of the 100+ acre site.

That's exactly right District Dirt, I was going to make another post dealing with the debt level. DC will have to spend the money on the infrastructure because the developers aren't going to do it. DC does have the highest municipal debt in the country per person.......compared to States.

I do care about DC's debt level also in addition to development. In defense, since I've seen the numbers, DC does have more than a couple hundred million dollars in future debt, actually past $500 million, to go before it indeed reaches that zone where it will impact negatively on bond ratings. The spike in debt the last 2 or 3 years resulted from DC making a $2.3 billion commitment to DC Public Schools and few other big ticket items.

So, eventually something will have to give. The city will have to keep moving forward. It still has to pay for capital improvements for other things too like the sewer system, roads, bridges, school system, etc. DC is not spending money because it just wants to, it has to spend the money because it is not coming in from anywhere else.

It is unfortunate that our city doesn't have a state to back these type of things up. Cities have to rely on their state to help with these costs. DC has no such avenue as it has to assume these costs of a city and a state-entity at the same time. This is one of DC's largest disadvantages.

Lastly, there is almost $1.6 billion in DC money siting in banks, mostly in New York, some of which is not tied down to the rainy day emergency fund.

And, that is why I posed the question, "Now or later"?

DC can't run away from this issue by selecting another developer. DC officials want to see Poplar Point developed. So, the $200 million in infrastructure costs will keep coming up whether it is with Victor MacFarlane or with another developer. The city will have to contribute its share, especially since this is not the most desirable part of town.

Or do you believe DC can get a better deal from a developer who wouldn't ask the city to contribute its share of "public good" money for water, sewers, electricity, and roads for an unproven and less-than-desirable part of town? I vote no on this one.

Do we do this now or later? Those are the choices. I'd like to hear everyone's take on it.

Later really means much later, if things are done how they usually are. The infrastructure upgrades are inevitable and I would like to see this project approved soon. The developer is paying for everything else in the very large development, this is a good situation.

Something is weird about this whole process. I saw an interview with Victor MacFarlane, DC United principal owner, on Sunday where he seemed as surprised as anyone else about the negotiations on Poplar Point. It seems to me that the communication between him and the city just wasn't(isn't) there. It doesn't register on my logic meter too well. Maybe I need a tune-up!

Victor MacFarlane has a lot of pull with other developers. He has injected himself as an investor in numerous projects all around DC in the past year. Here are a few:

The Yards project in Capitol Riverfront being developed by Forest City. He now owns, I believe, a 25 percent stake in that.

Half Street DC project in Capitol Riverfront, directly north of the new baseball stadium being developed by Monument Realty. His is now a part of that one also

The Solea condominium building in Columbia Heights being developed by the Jair Lynch Companies. His company is an investor in that one too.

The 25-acre former McMillan Sand Filtration Site being developed by EYA Partners. He is also a partner in that one.

He has been quoted saying he wants to spend $6 billion dollars just in DC. So, we may very well see MacFarlane Partners and a Poplar Point Stadium even if another developer is ultimately chosen.

But, I still see DC having to pay for the infrastructure costs, unless it is trying to do more of a phased project over a longer period of time. I believe MacFarlane wanted to get the whole thing funded right now - hence the $200 million upfront from the city.

I have noticed that when DC tries to do this phased in projects, they take absolutely forever because it is not that the developers are delaying things, they just have to wait forever for the city to start the infrastructure improvements before they can start building! The Yards is a prime example of that. Also, Capitol Quarter being developed by EYA. It has been over 5 years now, and the city is just now getting to the infrastructure improvements! So, developers have to wait in frustration even though their projects may have been approved by the city 5 to 10 years ago!

My motto is if the city is not ready to make the infrastructure improvements to sites that it wants to see developed, it should not be so quick to issue all of these requests for development proposals when it is not financially ready to do its part. All it does is frustrate the developers that they've chosen. And, the longer they wait, the more it costs to do the work!

July 23, 2007

District to Seek Competitive Bids for Poplar Point

(Washington, DC) Deputy Mayor for Planning and Economic Development Neil O. Albert announced Monday that the District will seek competitive bids to redevelop Poplar Point, a 110-acre site on the southern bank of the Anacostia River in Ward 8.

“Poplar Point is one of the District’s most valuable assets and we are presented with a truly once in a generation opportunity to build a new community on the river,” Albert said. “We need an open, transparent and community-driven process to determine that this site will deliver the maximum benefits to our residents.”

Long isolated by freeways and institutional uses, Poplar Point is being transferred to the District from the federal government. District officials are working closely with the National Parks Service to consummate the transfer, which is expected to close this fall. Under the terms of the agreement, the District must reserve at least 70 acres of the property for a waterfront park. The District will also engage in an extensive wetlands restoration, including Stickfoot Creek.

Most importantly, Poplar Point’s redevelopment will reconnect residents of nearby Barry Farm, Hillsdale, Fairlawn and Historic Anacostia to the river. Poplar Point is one of the key sites in the District’s ambitious Anacostia Waterfront Initiative, which calls for more than $10 billion worth of investment—new parks, trails, housing, retail, office space and cultural amenities—along the river’s banks during the next 20 years.

Initial planning studies indicate Poplar Point could accommodate more than 3.5 million square feet of development during the next 15 years. Desired uses for the site include a mix of housing, retail, commercial and cultural space. A soccer stadium has been proposed for the site, though the solicitation will not require developers to include a stadium in their proposals.

At least 30 percent of all the housing built on Poplar Point will be affordable for moderate and low-income families, in accordance with a District-wide affordable housing policy announced by Mayor Adrian M. Fenty last week.

The District will issue a solicitation to developers by the end of August. District officials expect to select a development partner before the end of the year.

In addition to DC not being financially ready to commit to a revitalised Poplar Point, the disposition of the land is still in question and far from being resolved.

The National Park Service, which currently has the title to this land, has recently weighed in. They are saying "Hold up, Wait A Minute"!

The Feds agreed to transfer title of this land, along with other land in DC with some major conditions. The city has to meet these requirements before the transfer of the land can proceed. One of them is the City has to relocate the US Park Service's facilities, current at Poplar Point, to another location in the city. At a minimum, they at least have to come to an agreement on a suitable site in wriiting.

The City has jumped the preverbial gun numerous times with the disposition of this site. This started with AWC (Anacostia Waterfront Corp). They were charged with redeveloping the site. Now since the AWC and NCRC operations have been folded back into the city's Office of Planning and Economic Development, The Neil Albert and his department are running the show.

I've been thinking about this the last week, and this is what I've concluded. A stadium at Poplar Point is probably unrealistic unless DC United wants to wait a few years and they absolutely want to be on that site. But, I don't think DC United can and should have to wait. DC has been selling them on Poplar Point for the last 2 years. Now, since the city doesn't have its ducks in order to move forward, they are saying "We can't do this now" Some negotiating, eh?!

The city knew the requirements for the transfer of Poplar Point well before now.

Now, they've issued a statement (reference my last post) saying their intent to issue a request for proposals (RFP) of Poplar Point in August.

One big problem.

The negotiations between the city and the Feds to finally transfer this land could be dragged out all the way into 2008 at least.

Ok, so you ask...... well, can't the city line up the developers now while they work on the disposition of the site? Not that easy!

Often times, for a developer to line up financing for a site, a title has to produced either showing they own the land, or if they are leasing, that the city owns the land. Oops. We have neither. The Feds still have the title! So, guess what. Financing and such can't be lined up.

They've jumped the preverbial gun too many times on these types of issues when they should have known things were not ready to be moved forward.

Here are the issues:

Poplar Point is a 110-acre plot of land

#1 DC does not currently have title to Poplar Point.
#2 The Feds will transfer the land to DC, but DC has to meet the requirements before the title is transferred.
#3 DC has to find a suitable site in the city for the US Park Service headquarters and then DC has to compensate the NPS for that move. They just have to come up with the agreement. The transfer of title can take place before the physical move as long as their is a signed agreement on the move.
#4 After DC gains title to the land, then they are free to develop it.

Final point: DC knew about all of these issues years ago and could have been planning them. It is obvious they didn't.

Actually they knew about the requirements while it was being approved by the House of Representatives. It then went on to be approved by the Senate. It then went on to be signed by the President. If they were so serious about wanting to see this site developed, I would have expected more progress to have occurred DC's end.

And, I know the Mayor and Department heads have changed. DC spent 2 years courting DC United over a new stadium at Poplar Point. Although mayors have changed, developers were still negotiating with a single entity known as the DC Government. DC United was like "let's do it". And, now look what happens. Not to mention the fact the I witnessed Mayor Fenty stand out in front of 20,000 fans at RFK not too long after he was elected and stated he was committed to building a new stadium at Poplar Point.

So, now we're going to bring another developer into this uncertainty and complexity?

Washington Deserves a stadium, especially for the 4 time champions.

I'm pissed. This was a fantastic spot for the stadium and the DC gov't is just doing what they're known for. If our bond rating or whatever would be compromised, than I can understand. But I also understand that the land will not be developed for another 5 yrs and it most likely won't be as good as the soccer stadium plan, it'll be just another mixed-use area that will most likely be toned down for SE and it'll be sterile. With the street car and the bridge and the soccer stadium, that area would look great especially w/ baseball right across the river.

Pissed is an understatement.

You don't spend 2+ years courting an organization to be a part of a site that you aren't ready to deliver on. Not even close to being ready, logistically or financially.

And, then they hide under the guise that they couldn't come to an agreement because the group wanted the city to spend $200 million for infrastructure. That wasn't the real reason.

So, we've wasted all this time getting worked up over this. We could have spent more time finding an alternative site that we could deliver on. Especially since DC United was (is) committed to paying for its own stadium. So, instead of already having maybe 4 viable alternative sites (like we did with the baseball stadium if you all remember), now we're back to square one.

And, then they have the nerve to issue a RFP for development a few days ago. Guess what. They are not ready for that step yet. The way this all went down is crazy.

Also, there (still) are other creative ways to finance the city's contribution. But, I guess we all are forced to deal with the same way of making a deal. It doesn't have to be that way. We don't have to do each deal and financing the exact same way. Who is looking outside the box?

Yes, I'm pissed.

From the blog of wusa9's Bruce Johnson:
http://www.wusa9.com/news/columnist/blogs/brucejohnson.html

It appears to be Fenty versus Barry on this issue. Ward 8's vote is in favor.

It appears Barry is intensely lobbying Kwame Brown on the stadium's behalf, and though Brown won't come out for the stadium, Barry's people seem to think they might have him in the corner.

DC United needs to get started on the plans by the end of the month. The site is simply not ready to be developed. DC does not control the land and it does not have title to the land..... yet.

Plus, DC United still needs the city to put in the infrastructure. They can't do that until they get control of the land. Even if DC United forgoes its larger plan to develop the entire Poplar Point site, it still would need infrastructure put in.

The National Park Service is not going to release the title to the land until their issues with the city are resolved. That could last well into 2008.

The only way this happens is if DC United wants to wait for all that to happen. The Mayor (he is not committed to this) is going to have to get Council approval for funds to put in the infrastructure......more bonds.

It has been over a decade since I left DC for Miami, but I saw many games of DC United back in '96. Those were the days of John Harkes, Marco Etcheverry, and Jeff Agoos. I thought for sure by now they would have a studium up and running and it is sad they don't.

I really hope this doesn't mean they will be moved, like the San Jose team was :( we lost the Fusion down here in Miami and we will probably never get soccer back because there is no way this city will ever spend money for a soccer stadium. Hell we won't even build a studium for the Marlins and that is the national pass time.
... Oh well. :cheers:

They should build it over the roundabout where Pennsylvania Avenue meets the Anacostia River.
Then you'd have a band of DC stadiums; The Nationals - DC United - The Redskins.

It would look neat!