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Update on DC United Stadium Progress at Buzzard Point

by Doug Barnes, David Rusk and Tod Lindberg

We all look forward to the turning of earth at Buzzard Point for the new DC United soccer stadium. But the reality is that a churn of money has to take place before dirt turns. Very silently, the DC United stadium quest is taking shape. Money is starting to flow, making the bulldozing of earth inevitable. Some recent updates by the Washington Business Journal and the consultant reports to the DC Government indicate that some important events are starting to take place. Unfortunately, except for a perfunctory acknowledgement of the eminent domain proceeding, word from DC United is conspicuously absent. We assume all is well and words will come in time.

From the Business Journal, we have the following article published October 27. A summary:

In the last 24 hours, the city has paid more than $25 million for parcels owned by two private entities — Super Salvage Inc. and Rollingwood Real Estate LLC. The lots are key parts of the D.C. United stadium footprint, which the District, as part of its deal with the team, was required to assemble. All told, the city expects to pay at least $85 million just to acquire the land. With the deeds in hand, D.C. now has control of the parcels previously owned by three of four private landowners on the stadium site. On Sept. 30, the city used its quick-take eminent domain power to seize 2 acres from Akridge. The battle over compensation is now before a D.C. Superior Court judge. The District has put $21 million into escrow to cover what it argues the land is worth.

The PEPCO deal is a bit more complicated. It involves a land swap and (as recently revealed by the Washington Business Journal) a payment to DC of $25 million for naming rights to some of the land at Buzzard Point. Just to be clear, this is not for the stadium naming rights—but perhaps Pepco Park at Buzzard Point is not far behind. It’s hard to understand why PEPCO would pay $25 million for naming rights to streets and a park, but this is probably is part of a larger negotiation, where real money sometimes turns into funny money. Anyway, the article can be found at this link, and here’s a quote summarizing it:.

Through a sponsorship arrangement, executed on Sept. 18, Pepco agreed to pay the District $25 million in return for one or more of the following: the re-designation of Half Street SW between Potomac Avenue and V Street as "Pepco Place;" the placement of "Pepco Place" signage, the installation of "Pepco Park" at the ellipse at the foot of the Frederick Douglass Memorial Bridge; the installation of "Pepco Park" in Congress Heights near the future St. Elizabeth’s East sports and entertainment facility; and "any other mutually agreeable venue(s) in the District of Columbia." The deal is a binding agreement on Pepco Holdings Inc. (NYSE: POM).

To make things even more complicated, some are calling the deal with PEPCO Soccergate, questioning whether the District's approval of the merger between PEPCO and Excelon is separate from this $25 million contribution to DC city coffers. They are calling for an ethics investigation, but we are not sure how you would assess the value of the future naming rights for a currently clapped out piece of property at Buzzard Point.

Another article on October 5 by the Washington Business Journal is on the value of the Akridge holdings (two acres) now under eminent domain proceedings. Here’s the full article. Summary quote:

The District last week seized the 2 acres, using its eminent domain power. The proposed just compensation is $21.1 million, the exact figure that a three-member panel of appraisers decided in January 2014 was the parcel’s value.

The numbers in the article at first seem confusing. The value of the Akridge land was estimated by the appraisal reports to be $21.1 million or $21.50 per square foot. This estimate is based on per square foot of allowable development under current zoning; one must not envision its value as an empty lot, but with future multi-story residential and commercial buildings on it. The Akridge position on the value of the land is closer to $36.6 million. Anyway, the land has been seized, and it is up to the court to figure out just payment. The bottom line looks to be that District may be on the hook for as much as an additional $15.5 million besides what it has set aside—if the court accepts the Akridge valuation. Depending on how much this goes above the original $89 million, an eventual ruling may increase DC United contributions by up to but not more than $7.5 million, but such payment would be spread over the term of the land lease. The current DC United lease for the land is $1 per year for 30 years, with DC retaining the ownership of the land.

Probably the most interesting news does not involve the stadium itself, but on the DC plans for Buzzard Point. For the policy wonks, there are new Buzzard Point documents available on the environmental impact, Buzzard Point vision framework, transportation impact study and others. Of all these, the Buzzard Point vision framework is probably the most interesting. Some insights from it include the development of Potomac Avenue as a grand boulevard and the extension to the Anacostia Waterfront Initiative to Buzzard Point, with a recommended 75-foot greenscape along the river. Also, there is the over $1 billion that will be invested in the Frederick Douglass Bridge and the South Capitol Street Corridor projects. The vision statement is well worth reading with lots of illustrations and maps. Below is a quote from the report.

The street network within Buzzard Point imagines that different streets would possess distinctive characters. Potomac Avenue is envisioned as a wide boulevard that serves to link pedestrians to two sports facilities, the soccer stadium and Nationals Park, and a series of open spaces. Half Street should serve as a tree-lined pedestrian thoroughfare, and should be the primary north-south spine within Buzzard Point. The South Capitol Street corridor should serve as a transportation boulevard; however, its oval and the southern axis of the corridor at S Street should provide public gathering and open space.

There are still some things to work out, so don't expect much to take place before 2016. The documents can be accessed at the Office of the City Administrator. Sometimes it takes a second click for the link to work, so be patient. Mentioned in the vision document is that the proposed oval on S. Capitol Street and some of the other public spaces would be good gathering places for DC United and even Nationals fans before games. We all will miss Lot 8, but the new gathering places may turn out to be better for fans once they get used to a different kind of experience.

In previous comments on the success of infrastructure investments (like a soccer stadium or a road), we had stated that complementary investments actually exponentially expand the success of projects. One only has to look at Fedex Field to understand that the "build it and they will come" advocates are generally far off the mark. The investments in the areas surrounding the stadium are just as important as the investments in the stadium itself. An example is the Verizon Center, situated in an area that now is bustling with activity. Thus, the new vision statement for Buzzard Point is extremely encouraging, and we hope that Populous, the stadium architect, is taking full advantage of future development plans to design a building that will be in the spirit of the new Buzzard Point.

However, it is also important for DC United to think beyond the stadium as well. The new soccer stadium will not be successful unless there are complementary investments in improving the team and its style of play. This is not to say that they have to win the MLS Cup every year (although that would be nice!), but that a commitment to building up the team is not forgotten in the excitement of building a new soccer stadium. The soccer stadium will not save the team, but should be one component in a successful strategy to develop a loyal fanbase that trusts the team to provide a top-quality soccer experience in Washington, DC.

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