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The eternal struggle to develop a soccer-specific stadium in Washington D.C. took another step towards becoming a reality on Wednesday. In an article written by Jonathan O'Connell of the Washington Post it was revealed that the D.C. City Council and executives with D.C. United are closing in on an agreement to develop a 20,000 seat stadium in the Buzzard Point area in Southeast Washington D.C.
Report: D.C. United, City Council Near Deal on Stadium
05/20/2014
 
An artist's rendering of the D.C. United stadium that is currently being debated by legislators.

The eternal struggle to develop a soccer-specific stadium in Washington D.C. took another step towards becoming  a reality on Wednesday. In an article written by Jonathan O'Connell of the Washington Post it was revealed that the D.C. City Council and executives with D.C. United are closing in on an agreement to develop a 20,000 seat stadium in the Buzzard Point area in Southeast Washington D.C. 

"There are some differences between the two bills that are worth looking into. First, as opposed to the original deal, the District will not be receiving a share in profits from the stadium. Instead the city will receive revenue from sales tax payments. They will also be a $2 dollar surcharge added to the sale of tickets. "

Now for those of you wondering why another agreement needs to be signed when an agreement was already put in place last August, this is D.C. politics. While an agreement was signed by the Mayor of D.C., Vincent Gray, and D.C. United it was a tentative agreement that had been signed that still required going through the D.C. City Council (which is essentially D.C.'s version of a state government.) So in essence coming to an agreement with the lawmakers that will be voting on the project is a good thing.


There are some differences between the two bills that are worth looking into. First, as opposed to the original deal, the District will not be receiving a share in profits from the stadium. Instead the city will receive revenue from sales tax payments. They will also be a $2 dollar surcharge added to the sale of tickets.


"In terms of the $2 surcharge that would kick in only after the team would pay the full sales tax in 15 years. If the deal were to go through, the earliest that D.C. United could play in the stadium would be 2017."

The tax structure would be incremental, meaning the club would not pay anything in sales or property taxes after the first five years, but then would would face a 25 percent increase every five years. United's lease on the land would last for 30 years.


In terms of the $2 surcharge that would kick in only after the team would pay the full sales tax in 15 years. If the deal were to go through, the earliest that D.C. United could play in the stadium would be 2017.


There are still potential problems with this deal. The biggest of course is that Mayor Gray lost his re-election bid to D.C. councilwoman Muriel Bowser in the Democratic Primary in April and is essentially a lame duck until his term ends in December. Bowser has been very critical of the stadium deal and would likely look to amend the current deal.


The deal also still calls for purchasing the land at Buzzards Point in a land for cash deal. The city would pay for the land purchase by selling the Reeves Center, an office building in the Northwest part of D.C. This too has drawn criticism from local politicians as many do not see the value in purchasing a stadium for a sports team. The city would still pay half of the $300 million of the project, paying mainly for the road and infrastructure costs.

"The tax structure would be incremental, meaning the club would not pay anything in sales or property taxes after the first five years, but then would would face a 25 percent increase every five years. United's lease on the land would last for 30 years. "

The other aspect that needs to be considered is that the city still has to buy out the people who own the area that would be used for the site. There are still two developers (a scrap metal company and another owned by Mark Ein, owner of the Washington Kastles tennis team) that have not agreed to the deal and thus would still need to be bought out to make the plan feasible.


It is expected that the bill with the land deal included should be set for review by the Council this week. 

 
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