Summary: As of October 1997, the District of Columbia had pegged total predevelopment costs for the sports arena at about $58.5 million, an increase of about $2.7 million over estimates from a year ago. The increase is largely due to the extended time frames for soil remediation efforts. The subsequent negotiated settlement with the sports arena contractors on behalf of the subcontractors was to compensate them for premium labor rates to get construction back on schedule and to cover additional material costs. The District's $61.9 million in available funds for predevelopment costs for the sports arena appears to be sufficient to cover estimated expenditures. The only known potential risk to the District's sports arena budget is the price for property taken in a condemnation action, which is to be settled in court in December 1997. The difference between the funds on deposit with the courts to pay for the property and the owner's most recent asking price is $3.35 million. Collections from the dedicated arena tax have been more than enough to pay principal and interest of about $5.9 million annually on the bonds issued to finance the predevelopment expenses. A recent analysis by the District shows that if yearly dedicated tax collections remain in the $9 million range and if revenues from the ground lease of the sports arena and existing debt service reserve funds were used, the bonds could be paid off in 2002 rather than in 2010, as scheduled, thereby saving the District about $15.6 million in interest costs. The sports arena is scheduled to open on December 2, 1997, three months behind the originally scheduled date of September 1, 1997.
