District of Columbia:
Status of the Sports Arena
AIMD-97-19: Published: Dec 31, 1996. Publicly Released: Dec 31, 1996.
- Full Report:
Pursuant to a congressional request, GAO provided information on the District of Columbia's sports arena project, focusing on the: (1) project's predevelopment costs, revenue collections, and financing; (2) interest rates received on the arena bonds; and (3) construction status.
GAO found that: (1) as of October 18, 1996, while the estimated predevelopment costs for most cost categories for the arena had somewhat changed, overall estimated predevelopment costs increased by a net amount of $617,000 or approximately 1 percent, from about $55.2 million to about $55.8 million, since GAO's last report; (2) the District had $66.6 million available to fund its predevelopment activities and establish a debt service reserve for the arena project; (3) this amount consisted of $57.4 million in net bond proceeds (after financing costs) and $9.2 million in 1995 revenue tax collections from the dedicated Arena Tax; (4) of the $66.6 million, $11 million is held in reserve ($5 million for cost overruns and $6 million for debt service); (5) based on estimates as of October 18, 1996, the District had sufficient funds to pay predevelopment costs; (6) the bond trustee has made the 1996 debt service payment of about $5.9 million on arena bonds, and the District's projections of Arena Tax revenues of $9 million annually appear sufficient to redeem the bonds by the year 2002 as scheduled; (7) arena predevelopment activities are nearing completion; (8) all land has been acquired; however, the final cost of the parcel of land acquired through condemnation proceedings will be determined by the outcome of legal proceedings; (9) the buildings formerly on the arena site have been demolished and the relocation of utilities and the securing of regulatory approvals are nearly complete; (10) District employees have been relocated and office improvements are underway; (11) construction of the Metrorail connection is about 25 percent complete; and (12) arena construction began on February 18, 1996, and the arena should open in late 1997.