The District is spending about $25.7 million too much on a land-swap deal to build a new stadium for D.C. United, according to a report released Wednesday.
The report, a cost-benefit analysis of the 2014 Soccer Stadium Development Act, was commissioned by the D.C. Council. The Act outlined an agreement to trade land at Buzzard Point, the planned site of the new stadium, for the Frank D. Reeves Center at 14th and U Streets NW, one of the most sought-after city-owned properties in the city.
As described by the report, the deal is “a series of land exchanges” in which D.C. would get the Buzzard Point property and lease it to D.C. United. The team would then build the stadium and develop other parts of the property, including a planned hotel. In addition to being home base for D.C. United, the stadium would also host exhibition games, concerts, and other events. As part of the deal, the Reeves Center would be exchanged with developer Akridge, which would lease it back to D.C. for three years. After that, the company plans to demolish the building and construct a mixed-use project redeveloping the site with office, retail, housing, parking and a farmer’s market.
The cost of the proposed stadium is estimated at $286.7 million, of which the D.C. government would commit to contributing $131.1 million. The report notes that the price would make the new arena the most expensive professional soccer stadium in the U.S.
The report concludes that “the proposed agreements overvalue property to be acquired for the stadium by at least $19.4 million and undervalue the Reeves Center by $11.2 million. After a committed contribution of $4.9 million from D.C. United and Akridge, the net overpayment is estimated to be approximately $25.7 million. Using eminent domain to acquire these properties could result in lower acquisition prices, but there are also costs associated with the condemnation process.”
But it notes that the stadium would likely generated $2.6 billion from 2015-2046. Over the 32-year period, the report suggests that benefits would exceed the costs of the stadium by about $110 million as well as significantly speed up development in the Buzzard Point neighborhood.
This article originally published at http://dc.urbanturf.com/articles/blog/council_report_stadium_deal_undervalues_reeves_center_overvalues_buzzard_po/9190
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