D.C. Council proposal would create new fund for Nationals Park maintenance

In a statement unveiling the bill, Mendelson stressed that the proposal is “entirely self-funded” and added in an interview that he saw the maintenance fund as the city’s “responsibility” to the team as the ballpark’s landlord.

“There should not be this problem that these obvious maintenance needs are not taken care of right away and that they’ve been allowed to accumulate,” Mendelson said. “And there needs to be certainty that legitimate maintenance needs will be taken care of, and this bill provides that.”

The Nationals support the proposed bill, a team spokeswoman said Tuesday.

The proposal appears aimed at satisfying the Nationals’ long-standing requests for upgrades, signaling a firm commitment from D.C. to meet the team’s stated needs just after the failed negotiations of Mayor Muriel E. Bowser (D) to keep the Washington Wizards and Capitals at Capital One Arena. Their owner, Ted Leonsis, announced a tentative billion-dollar deal to move them to a new arena planned for Northern Virginia, a stunning loss for Bowser that has increased the pressure on the city to cater to the needs of its other sports teams — which were jockeying for city funds at the same time last year.

While the Nationals sought funds for significant upgrades to the ballpark, they were competing for the city’s attention as Bowser set her sights on luring the Washington Commanders back to D.C. and as Leonsis sought $600 million in public funds for upgrades to Capital One Arena. Bowser and Mendelson offered Leonsis $500 million in public funds early last month — but that offer appeared to come too late, and Leonsis moved forward with his Virginia plans, which must still win legislative approval.

Now Mendelson’s proposal, the Ballpark Budget and Maintenance Amendment Act, appears to closely align with the core request from the Nationals: their own dedicated stream of funds.

Though he said the proposal was in the works long before Leonsis announced his teams’ planned move to Virginia, Mendelson said that blow to the city’s sports fans only “emphasized the importance” of tending to the Nationals’ deferred maintenance needs.

“We made a commitment to the team we would build the stadium and we would maintain it, and we just don’t need these stories about deferred maintenance and failing scoreboards,” he said. “So let’s provide a certain path that we’re going to maintain our facility and maintain it as a very attractive ballpark in the major leagues.”

Under the legislation, the new fund would have three core sources of revenue, all of which already exist, that could go toward long-term maintenance and improvements: a sales tax on purchases at the ballpark; rent that the team pays D.C. for the ballpark; and any remaining funds left over in the Ballpark Revenue Fund (BRF).

The BRF is a special pot of money that the city uses to pay off the municipal bonds that funded the construction of the ballpark in the 2000s. The city has been ahead of schedule in paying down those bonds, prompting questions about how any leftover money in the fund would be used — especially as other sports teams wondered if they could have a piece of it.

In September, Alan Gottlieb, chief operating officer of a sports business group owned by the Lerner family, which owns the Nationals, sent a letter to local leaders urging them to repurpose various revenue streams in the BRF into a “Ballpark Modernization and Sustainability Fund” — which Mendelson’s proposal reflects. The goal was to use the money to maintain and modernize Nationals Park, opened in 2008, without creating additional taxes or pulling from other budgets. Nationals Park is still one of the newer major league stadiums — only six new ballparks have been opened nationwide since.

The money in the BRF comes from four main sources, according to the Office of the Chief Financial Officer. The largest by far is the ballpark fee, a tax on people or employers who earn more than $5 million, which brought in an estimated total of $46.8 million in fiscal 2023, according to a December report; that tax will sunset once the bonds are paid off, the CFO’s office has said. The other three are taxes on sales at Nationals Park; public utilities; and rent that the team pays D.C. for the ballpark. According to budget documents, the bonds are expected to be paid down in 2027.

Altogether, that roughly $70 million in revenue typically is much greater than the municipal bond payments per year, creating leftover funds. But in recent years, Bowser and the council have directed some of the excess money in the BRF to the general fund to balance the city’s budget. Since 2020, they have redirected more than $200 million, including $82 million the city plans to pull from the fund for other purposes between 2024 and 2027. Mendelson acknowledged that the decision rankled the Nationals during last year’s budget season, but he defended it as necessary at the time.

He said his legislation will not change any past budget decisions but will prevent any more siphoning from the BRF for the general fund.

“The council went along — it’s not like the council’s innocent here,” he said, acknowledging that the council approved requests from Bowser to use BRF funds to balance the budget. “But you’ll remember that last year’s budget was a very difficult budget, and to not have sustained what the mayor proposed would have meant that we would have to find $80 million to replace it. But this bill says no more.”

While the bonds are still being paid off, the legislation directs Events DC, a quasi-governmental agency that negotiates with the Nationals about maintenance needs under the lease, to use excess revenue to fund improvements at the ballpark.

The Nationals are planning to upgrade the scoreboard and the equipment to operate it as well as the stadium lights ahead of the 2024 season. Future funds would be used for other stadium improvements as the ballpark continues to age.

These requests come as the potential sale of the team remains in limbo. The Lerner family announced that it would explore selling the team in 2022, and it remains a possibility. But the family is not close to a sale and obstacles still stand, though Leonsis is the likeliest buyer. That leaves the Lerners operating the team as if they plan to own it indefinitely.

Sam Fortier contributed to this report.