Washington Business Journal by Michael Neibauer
The District is committing more than $47 million to a host of capital projects that it plans to partially fund with cash it has received from Pepco, in a deal that will ensure the utility's brand is in your face.
Through a sponsorship arrangement, executed on Sept. 18, Pepco agreed to pay the District $25 million in return for one or more of the following: the redesignation of Half Street SW between Potomac Avenue and V Street as “Pepco Place;” the placement of "Pepco Place" signage, the installation of “Pepco Park” at the ellipse at the foot of the Frederick Douglass Memorial Bridge; the installation of “Pepco Park” in Congress Heights near the future St. Elizabeths East sports and entertainment facility; and “any other mutually agreeable venue(s) in the District of Columbia.”
The deal, a binding agreement on Pepco Holdings Inc. (NYSE: POM) and its "respective successors and assigns," is unrelated to the negotiations between the Bowser administration and Exelon (NYSE: EXC) to secure the administration’s support for the proposed Pepco-Exelon merger, said Joaquin McPeek, spokesman for the Office of the Deputy Mayor for Planning and Economic Development. Bowser announced Oct. 6 that she would support the merger in return for $78 million in public benefits.
Of the $25 million from Pepco, D.C. has already put $21.1 million into escrow with the D.C. Superior Court to cover the city’s expected eminent domain payment related to 2 acres it has seized at Buzzard Point. That land, owned by Akridge, was taken by the District on Sept. 30 to clear the way for a new D.C. United stadium. Akridge contends its land is worth much more.
Pepco controls vast acreage at Buzzard Point, some of which it will sell to the District for $39.3 million to complete the stadium footprint (along with properties owned by Mark Ein and Super Salvage). The District, meanwhile, will sell Pepco, for $16 million, a parcel at First and K streets NW for a future substation. The negotiations that led to that land swap also spurred the sponsorship agreement, city officials say.
"Through ongoing negotiations, we are now in a position to reduce the District’s direct investment in the soccer stadium by $25 million," Bowser said in a news release.
The District, through the fiscal year 2012 budget, authorized the Department of Parks and Recreation to "contract for ... advertisements and sponsorship for recreation centers, pools and play courts" within its inventory, which would appear to open the door to park naming rights. It is unclear under what D.C. code section the city has the power to sell street naming rights.
Combining Pepco’s payment with surplus capital funds from fiscal year 2015, D.C. has freed up $47.1 million to use as it pleases for a slate of projects it wants to move on now. Late last week, the Bowser administration filed paperwork with the D.C. Council to shift that money around, offering details of each project: