D.C. Government Playing with ‘Corked Bat’

Published December 1, 2005

Washington, DC officials have begun condemnation proceedings to seize privately owned property to make way for a new $535 million ballpark for the Washington Nationals Major League Baseball team. The Nationals now play at RFK Memorial Stadium.

Steve Green, director of development in the office of the deputy mayor for planning and economic development, told the Washington Times for an October 6 article, “We think there are some [property owners] that we’ll have good-faith negotiations with.”

Nearly half of the 23 landowners whose property is targeted for the new stadium site had not responded to city officials. Most others had rejected the city’s offers. City officials told landowners at the 21-acre site along the Anacostia River if they did not strike a deal with the city by October 21, their property would be condemned.

Land Values Climbing

“Most landowners have been offered about three times the amount at which properties were assessed, but many have resisted selling because the rise in land values around the ballpark site [has] outpaced the city’s offers,” reported the Washington Times in an October 21 article.

Patricia Ghiglino, who owns a yellow-brick art studio on the proposed stadium site, has vowed to take the matter to court. Retired Army officer Kenneth Wyban also plans to go to court. His pre-Civil War home, which he has worked for years to restore and had hoped to turn into a bed-and-breakfast, is targeted for acquisition.

“I was born in Peru, and I never, ever imagined something like this could happen here,” Ghiglino said. “I think what is really upsetting is that they are stretching the concept of eminent domain for economic development. … They are opening the door to corruption.”

Ghiglino doesn’t know where she’ll move, only that it likely won’t be DC because real estate prices are too high and she doesn’t want to “get burned a second time.”

Interpretation Is ‘Twisted’

“The Fifth Amendment of the U.S. Constitution stipulates land can be taken for ‘public use,’ not public good or private benefit,” said Peyton Knight, director of environmental and regulatory affairs for the National Center for Public Policy Research in Washington, DC. “As Justice Sandra Day O’Connor noted in her dissent to the Kelo decision [issued June 23, 2005], no one’s home is safe. This twisted interpretation of the law has potentially put every home and small business in America in the crosshairs of politically connected developers and their unscrupulous government allies. Eminent domain reform is needed soon.”

Knight added, “Typically, ‘good-faith negotiations’ do not portray the buyer holding a gun to the seller’s head. These negotiations have been tinged with bad faith since April, when the city told property owners they had to be out of their homes by New Year’s Eve. Mr. Green can pretend he’s dealing in good faith, but he’s really playing with a corked bat.”

City Still Seeking Financing

The city is waiting for approval for an upfront payment of $246 million from Deutsche Bank in exchange for a lease payment and future stadium revenues. The rest of the ballpark would be publicly financed by selling municipal bonds, but bond houses refuse to issue an investment-grade rating on the bonds until the city fixes certain problems with the plan. Without an investment-grade rating, the interest rate charged on the borrowed money will be higher, raising the total financing costs.

The bonds would be repaid from revenue from a gross receipts tax on large businesses and a utilities tax on businesses and federal offices.

Mayor Anthony Williams has been promoting the new stadium as a key element of a redevelopment plan for the Anacostia River area. Construction could start in March and is expected to take two years.

Steve Stanek ([email protected]) is managing editor of Budget and Tax News.

For more information …

For more information on publicly funded sports stadiums, visit PolicyBot™, The Heartland Institute’s free online policy research database. Point your Web browser to http://www.heartland.org and click on the PolicyBot™ button. Choose the topic/subtopic combination Economic Development/Stadiums and Convention Centers for more than 100 documents, in PDF and HTML formats, on the issue.

More information on the Washington Nationals baseball stadium is available from the Cato Institute at http://www.cato.org/pub_display.php?pub_id=2479 and from the National Center for Public Policy Research at http://www.nationalcenter.org.

More information on eminent domain and the U.S. Supreme Court’s recent Kelo decision is available from the Institute for Justice at http://www.castlecoalition.org/HandsOffMyHome/.