The Washington Nationals have surprised the baseball world by leading the majors in wins, fielding the best pitching rotation and barreling toward the playoffs in first place in their division. It might surprise Washingtonians that the team's new baseball stadium, so maligned at its inception, is paying for itself and throwing off extra cash.
"It's been a great deal for Washington," says John Ross, senior adviser and director of the Office of Economic Development Finance in the Office of the Chief Financial Officer. "We got a baseball team and we got the stadium paid for. And we are reaping tax revenues from development around the stadium."
Critics who branded the stadium a boondoggle when construction began in 2006 have been proved wrong. They predicted the stadium along the Anacostia River would drain the city's coffers and sit alone amid an urban wasteland. To the contrary, the ballpark has been a boon -- to the city and the blighted Southeast neighborhood.
And if the Nationals win into the postseason, the financial rewards to the city could be a bonanza, according to D.C. Councilman Jack Evans, who championed the stadium.
"Can you imagine what it would mean if the Nats got to the World Series against a team like the New York Yankees?" he asks. "Every hotel room in the city would be sold out. You can't even calculate the benefits if the World Series were here."
The CFO estimates every postseason game could throw off $1 million in tax revenues. But let's not get too far ahead of ourselves. The Nats might not make it past the division series. Either way, the stadium deal has been good for the city financially.
The city borrowed $585 million in 30-year municipal bonds to finance the stadium. It takes $32 million to service the annual debt. According to the CFO and Evans, revenues from taxes, fees and rent have brought in more than $50 million every year. The excess has been going into the general fund, but the city council passed a law that will put it into savings.
"At the current rate, we can pay off the debt and retire the loans in 17 years," Evans says. At that point, the stadium could generate $50 million a year in revenue for the general fund.
Why has the stadium been a financial win for D.C.?
"None of the models took into account that revenues would come from out of state," says Nationals legislative affairs director Greg McCarthy. "The majority of our fans are from the suburbs."
The Lerner family, which owns the franchise, settled its dispute with D.C. years ago and pays upward of $5 million a year in rent. Revenues from development around the ballpark have exceeded expectations, and things have just begun.
And what if the Nationals' magical season takes them all the way to the World Series?
"It would be a major boost to the city's image," says Evans. "It would eclipse the Redskins winning the Super Bowl. And the games would be played here. Imagine that!"
Let's not get too far ahead of ourselves. That's a money-losing proposition.
Harry Jaffe's column appears on Wednesday. He can be contacted at email@example.com.