District of Columbia: Status of Sports Arena and Convention Center Projects

GAO discussed the status of the District of Columbia's sports arena and convention center projects, focusing on the: (1) District's predevelopment and financing costs for the project; and (2) the revenues that will be generated from the new arena tax. GAO noted that: (1) the District's estimated predevelopment costs for the sports arena project total $56 million; (2) the District plans to borrow up to $53 million from a syndication of banks, and use an estimated $9 million in annual revenues from the arena tax to repay the loan over 9 years; (3) the arena tax will provide sufficient revenue to repay the maximum amount of the loan if the District's tax projection assumptions are achieved; (4) the District has received and deposited $18.7 million in new taxes dedicated to the Washington Convention Center Authority; (5) these tax collections represent approximately 61 percent of the $30.8 million projected for fiscal year 1995; and (6) the Washington Convention Center Authority cannot contract for the various studies necessary to better define the project proposal for the new convention center or expend funds for the operation and maintenance of the existing convention center until the new convention center is constructed and operating.