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Nats Demand $100,000 A Day For Unfinished (?) Stadium

Night after night, tens of thousands of fans crowd into Nationals Park to watch baseball. The views are spectacular, the scoreboard is dazzling, the team can't hit -- ah, well, you can't have everything. But at least the stadium, against many expectations, got built on time and on budget.

Or did it?

A snippy legal battle between the Washington Nationals and the District government has been raging behind the scenes since February. Even now, a quarter of the way into the first season at Nats Park, the team's owners are demanding that the city cough up $100,000 a day in damages because, according to the Nationals, the stadium was not completed in time for Opening Night in March.

(Funny, I somehow recall spending $5 on a hot chocolate at the ballpark that night -- and watching a breathtaking walk-off Ryan Zimmerman home run sail out of the stadium.)

According to letters I obtained detailing the dispute, attorneys for the Nationals began peppering the D.C. Sports and Entertainment Commission early this year with warnings that the ballpark would not be done on time, putting the city on notice that the team wanted the big-money damages that the construction contract allowed for if the stadium came in late.

In public, everything seemed hunky-dory. "Everybody has done a wonderful job on this ballpark," Nationals owner Ted Lerner told The Washington Post on Opening Night. "I think expectations have actually been surpassed."

Inside the team's offices, the tone was very different. Two weeks before the March 30 opening, exasperated attorneys for the city accused the team of "finger-pointing and windfall-seeking." Nationals attorney Irwin Raij responded that "our purpose was not to provoke a dispute," but he told the stadium's architects that "the team is concerned that in the frenzy to complete the stadium, industry standards may be disregarded and errors will be made exposing the team and its patrons to unnecessary risk."

Raij would not comment, and Nationals President Stan Kasten was uncharacteristically reticent when I reached him: "I'm not going to have anything to say to you about that."

But nearly three weeks after the stadium played host to its first game, the Nationals were still demanding $100,000 a day because, among other items, the team offices at the new ballpark were not yet completely ready.

The city conceded that the offices weren't done as soon as the ballpark itself, but sports commission chief executive Gregory O'Dell reminded the Nationals that the offices make up less than 3 percent of the stadium project. He called that delay a "minor inconvenience" and noted that the District allowed the team to stay at its old RFK Stadium offices rent-free.

"The Nationals had an incredibly successful season opener in a stadium that opened on time," says Matthew Cutts, chairman of the sports commission. "We still think there's hope for an amicable resolution, but this isn't the way we would like to see the project come to completion."

Some city officials are so angry at the Lerners that they don't want to talk to the family anymore. "It just turns my stomach that they would take all the goodwill we had and risk it on petty little technicalities," says one D.C. official, who declined to be named, saying he doesn't want to become the focus of the owners' wrath.

Others are not so quick to get excited about this apparent souring of the relationship. "Clearly, the stadium was done in time," says D.C. council member Jack Evans (D-Ward 2), a longtime supporter of the ballpark project. "We played baseball there on Opening Night. But the Lerners, without passing judgment on this, are in the construction business, and their reputation is to be very meticulous, so it would not surprise me that they would seek to stick to the letter of the contract."

The Lerners take great pride in the stadium, and especially in the $50 million worth of snazzy extras they paid for, such as the gorgeous scoreboard, bathrooms in the luxury suites and a better class of restaurant out beyond centerfield. Add that to the $450 million purchase price for the franchise, and the family is entitled to ask that it gets what was agreed to.

But the District and the fans paying the taxes that pay off the stadium bonds are deep into this project too, to the tune of $611 million in construction costs and millions more in infrastructure around the ballpark.

Both sides feel tapped out, but the Nationals have a long way to go before baseball is once again firmly rooted in Washington. It wouldn't be fair to ask the owner to open the spigots and spend with all the abandon of, say, the D.C. government, but the Nats do need to send the message that they are determined to make this team both a cherished public institution and a financial success. Diving into petty disputes only muddies that message.

Join me at noon today for "Potomac Confidential" at www.washingtonpost.com/liveonline.

By Marc Fisher |  May 22, 2008; 8:13 AM ET
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Comments

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The Dc govt should find the Nats in violation of their lease ie putting a Double AA team on the field instead of a major league one and lock the Nats out.
Kasten is a pathetic shopping center owner with delusions of being Danny Boy Snyder!

Kasten take your pathetic team and move it out of here. We wanted a major league team and got a minor elague one with an owner who is a joke.

Posted by: Anonymous | May 22, 2008 8:49 AM

The Lerners need to simply accept the $611 million windfall that has been granted to them and move along. It's not like they're going to cut concessions prices after the taxes contained in those prices eventually pay off the bonds issued to finance construction of the stadium.

Sometimes there are disputes that you could win but are better off not entering into. I hope the Lerners realize the costs associated with the monetary benefit they might gain from this squabble.

Posted by: Lindemann | May 22, 2008 9:59 AM

The Lerner's claim for damages is a tipping point for my support for this whole venture. It was a sweetheart deal from the outset with DC taxpayers providing $611 million against $50 million by the Lerners. These respective support levels should have been the other way around. In NYC, the Met and Yankee owners are largely self-funding the construction of their new stadiums. Arguments that the stadium project was necessary to support additional development in this neighborhood were challenged during the debate. Professional economists have long determined that stadium projects do not provide sufficient payback to justify the spending of substantial public funds. Even local developers opined that this area will continue to be developed whether or not a stadium was built. Mayor Fenty, then a Councilman, was right to oppose the stadium. Once the project was approved, Councilman Fenty was right to put a school reconstruction program in motion, as if to say: "if we can fund a stadium, then we certainly need to be prepared to rebuild our school facilities". As Mayor, Mr. Fenty was right in ensuring that it was completed on time but he was also right in holding his nose when doing so. Given the Lerners' damage claims, this sweetheart deal doesn't smell so sweet right now.

Posted by: mm@nwdc.us | May 22, 2008 10:22 AM

Easy solution then, charge them back rent at RFK equal to what they'd supposedly owe for "not finishing" the stadium.

Posted by: Moose | May 22, 2008 10:23 AM

What happened to the rule of law and living up to a contract?

Posted by: Brian | May 22, 2008 10:41 AM

Aparently neither Marc Fisher or anyone else believes in upholding a contract. What would Fisher or any of you say if a remodeler or builder of an addition on your house didn't finish the job as contracted? You'd be up in arms as the Lerners are with the DC Government. Contracts are binding agreements so everyone knows exactly what is expected of them. Why have contracts if they're not going to be followed?

Posted by: You're all hypocrites | May 22, 2008 10:44 AM

You made a bad analogy, "hypocrites." It's more like a builder saying, "OK, I'll build you a $500,000 house and GIVE it to you as long as you pay for the landscaping. And then you sue him because when you move in, the basement bathroom hasn't been painted yet.

Posted by: OldPhil | May 22, 2008 11:03 AM

There's living up to a contract and there's losing the public relations battle.

The Nats might win one to lose another, and losing that public relations battle might cost them more in the long run. Unless Brian and hypocrites plan to cover all the lost ticket sales for pissed off fans.

Posted by: Shawn | May 22, 2008 12:00 PM

There's living up to a contract and there's losing the public relations battle.

The Nats might win one to lose another, and losing that public relations battle might cost them more in the long run. Unless Brian and hypocrites plan to cover all the lost ticket sales for pissed off fans.

Posted by: Shawn | May 22, 2008 12:05 PM

I read the article concerning the Washington Nationals ownership and the Lerner family suing the city and contractors for $100,000 per day. That is so much gall that even Ceasar couldn't divide them.

The stadium, from conception, was ill-planned and a huge hole into which the District of Columbia taxpayers are expected to continually pour money. With $611 million currently the lowest figure I have seen and the ancillary costs of infrastructure adding millions and millions, not to mention the interest paid on the bonds, I think it is beyond contempt that these "totally rich" owners are now trying to sue for more.

I would also point out, that even though the stadium appears in pictures to be totally complete there are lots and lots of empty seats. Just one more example of just how ill-planned this folly really is.

If I were a fan, which I am not, I would never again attend a game until the lawsuit was dropped and an apology printed. Then, if they had something that resembled some sort of community spirit in contrast to boldfaced greed, I might consider buying one of the overpriced tickets.

Posted by: JIM | May 22, 2008 5:15 PM

Anyone who thinks this is an isolated case, needs to take a look at the fleecing that St. Louis got(and is still getting) from the Cardinals' ownership group. Along with the current stadium still being worked on after Opening Day of '06(the left field seats weren't completely finished until early June), the promise of a Ballpark Village to help with downtown revitalization has yet to come to fruition.
It's going to happen in Southern and Central Florida, as well, once the Marlins and Rays get their stadiums, and will probably happen in NYC, too. Unfortunately, it's the nature of that ugly beast known as professional sports franchise owner.

Posted by: Bruce | May 22, 2008 7:31 PM

Talk about unmitigated gall!

They took MUCH MORE than $611-million dollars from DC -- legal expenses and public safety expenses have been shifted to other budget line items. The amount is actually closer to $800-million.

Then they threatened to sue the taxpayers if we don't pay for their uniforms. I'm not sure if they also wanted us to pay for their jock straps as well.

Now it's that hundred thousand dollars a day because the offices weren't ready.

Of course Jack Evans won't pass judgement on Lerner. Lerner's one of his developer friends and backers. And Jack not only agreed to the deal, he was the one who pushed it through Council. With a primary election coming up in September, you bet Jack wishes this would all go away. If Lerner cares about Jack, it WILL go away, soon. But the damage has already been done.

Posted by: DC Voter and Nats Fan | May 23, 2008 9:37 AM

What Mr. Fisher explained on Tony Kornheiser's radio show this morning is that there were incentives built into the contract that the construction company would get if the project was done in time and the Lerner family would get if it was not done in time..

"This is money that was going to go to somebody one way or the other," Fisher said.

If that is the case and the stadium is not completed to the letter of the contract, then it probably ought to be the Lerner family.

If Mr. Fisher had gone ahead and explained this circumstance in the article it would have shed a different light on the Lerner family and the contract dispute.. Rather than seeming as though they're leeching money from the city, they might be seen as a party expecting a business deal to be carried out by the prior agreement.

It seems irresponsible to leave this detail out of the main article.

Posted by: Mitchell | May 23, 2008 1:52 PM

Excuse me, I thought the Lerners were chosen for their DC roots? Yet the only thing the city gets from them is, "talk to the hand".

These guys were already rich and DC bankrolled them to the tune of $600M, and here they are, whining "they didn't Brasso the urinal handles" or whatever showstopper has provoked their pique, and demanding an extortionate "penalty" payment.

And then to add insult to injury, they take all their team business across the river. I guess those high-falutin' developers gotta stick together huh?

Posted by: laboo | May 23, 2008 9:54 PM

Boy, so many mistakes in the comments, so little time.

1 - in more than one comment it is referenced that the Lerners got a sweetheart deal. Remember MLB itself got the sweetheart deal. The Lerners bought it from MLB, so you could say the price they negotiated included the possiblity of "unfinished construction". If I were the Lerners, I certaintly would want that money.
2 - the first commentor stated "Kasten is a pathetic shopping center owner". If you are going to insult the man, at least get the right man, or the right position. Don't know who exactly you were going after.
3 - OldPhil, if I was given a $500,000 house and told it would be completed, including a painted bathroom in the basement, or I could claim $1,000 a day, guess what? I'd ask for the $1,000. Your logic seems incorrect. The point is the District signed this stupid contract, so they should abide by it, if they are truly in violation.
4 - Moose's claim that they should charge back rent for RFK. If there is a contract for that, I agree.

Overall, if you were running a public company and had a contract that the other party violated, you'd go after them. Anybody who doesn't is a fool and should be fired.

Note - On the subject itself, I think the reasons the Nationals are demanding the money are petty, but if that's what the contract states, hey why not? The Nats tried to keep this quiet, and Fisher revealed it. Both are doing their jobs. But you would think someone, like the DC agency in charge of the stadium would have called up the Lerners on the due date and said, "Does this meet your satisfaction? If not, let us know your greviances". Maybe the Lerners would have let them slide on one or two things.

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