WASHINGTON - As competing jurisdictions anxiously await a decision that officials saycould come as soon as next week on where the Montreal Expos franchise will relocate,political leaders in Virginia have raised concerns about using that state's moralobligation pledge to back baseball stadium bonds.
Northern Virginia and the District of Columbia are considered to be the frontrunners inthe competition to secure the money-losing National League team that plays a portion ofits games each year in Puerto Rico. Officials in both locales have said they would buildnew ballparks if awarded the franchise and both financing plans call for tax-exemptbonds to be sold for construction.
Virginia Gov. Mark R. Warner, a Democrat, and some state lawmakers have expressedconcerns about the proposal to issue bonds backed by a moral obligation pledge in orderto finance a baseball stadium to be operated by a for-profit enterprise should Virginiawin the Montreal Expos franchise and have to build a stadium.
Speaker of the House Bill Howell, R-Fredericksburg, and the chairman of the SenateFinance Committee, John H. Chichester, R-Fredericksburg, "have both expressedsignificant concern about the use of moral obligation bonds for baseball," noted EllenQualls, Warner's press secretary.
"The governor's concern is that the details of a fluid deal be worked through diligentlyto get to the best protections for the public possible, as well as a politicallyfeasible package," Qualls said, adding that Warner has "long been a supporter ofbaseball coming to Virginia."
Del. Vincent F. Callahan Jr., R-McLean, chairman of the House Appropriations Committee,appeared to favor the use of moral obligation debt and accused Warner yesterday of being"still on the fence" regarding its use for stadium debt.
Even if the relocated Expos were to have the worst attendance figures in the league, forexample one million fans per year, the team owners could still make a profit, Callahansaid in an interview yesterday. "The chances of the state being called on to pay, or ofa default happening, are extremely remote," he said.
Under the current financing proposal, which would need state legislative approval, theVirginia Resources Authority - the only entity in the state that issues moral obligationdebt - would issue a combination of tax-exempt and taxable debt for the proposedfacility. Based on its moral obligation pledge, VRA bonds typically receive a double-Arating from credit agencies.
Although triple-A rated Virginia has never had to call on it, the state's moralobligation pledge significantly enhances the credit quality of its loan programs becauseif a bond issue's capital reserve fund drops below its minimal requirement, the issuermay submit a request to the governor for needed funds, and he in turn is legally boundto request the appropriation from the legislature. The General Assembly is scheduled tobegin its 2005 annual legislative session on Jan. 12.
Meanwhile in the nation's capital, a spokesman for Linda Cropp, who chairs the DistrictCouncil, said his boss has no plans to rush through approval for Mayor Anthony Williams'stadium financing proposal that is contingent on the city being awarded the ballfranchise.
Supporters of the plan, including Cropp, "believe they have a package that can withstandscrutiny in terms of financing the stadium," her press secretary, Mark F. Johnson, saidin an interview yesterday.
Although backers of the mayor's plan are confident that they have the majority supportin the 13-member body needed to pass the plan that would lead to the sale of bondsbacked by business taxes, it is unclear if that majority will remain when new memberstake office in January.
That is because political challengers who oppose the plan defeated three incumbentcouncil members in the Democratic primary elections Tuesday, including a key Williamsally who heads the council's economic development committee. The city is so heavilyDemocratic that victory in the primary election all but assures victory in the generalelection in November.
One of those challengers, former mayor and municipal bond consultant Marion Barry, whowon the primary for Ward 8, reaffirmed his opposition to Williams' stadium financingproposal. "Over my dead body," the Washington Post quoted Barry saying yesterday. TheDistrict Council's next legislative session is tentatively scheduled for Sept. 21.
