BANKS ASK CONGRESS TO ASSURE THAT DC CAN REPAY ARENA LOANS
Crestar and NationsBank, who have offered the cash-strapped
DC government $53M to buy the land and make improvements on the
site of a proposed new arena, have asked Congress for assurances
the city will be able to repay the loans. Bullets/Capitals owner
Abe Pollin will finance construction if DC makes improvements and
donates the land. Congress must approve an amendment in the DC
Charter to allow the city to levy a tax on hotel and retail sales
to pay back the loans. That tax is expected to generate $9M a
year, but the banks are "concerned" that projection may be too
high. The banks will ask Congress for provisions that may
include an automatic increase if the tax doesn't produce enough
income, or a claim on the rent Pollin will pay the city.
Financing must be in place in May for construction to begin this
fall (Lorraine Woellert, WASHINGTON TIMES, 4/19).