[Congressional Record Volume 144, Number 107 (Monday, August 3, 1998)]
[Extensions of Remarks]
[Pages E1518-E1521]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 DISTRICT OF COLUMBIA CONVENTION CENTER AND SPORTS ARENA AUTHORIZATION 
                             ACT AMENDMENTS

                                 ______
                                 

                               speech of

                          HON. THOMAS M. DAVIS

                              of virginia

                    in the house of representatives

                        Thursday, July 30, 1998

  Mr. DAVIS of Virginia. Mr. Speaker, due to the time at which the 
House considered H.R. 4237 under unanimous consent procedures, the 
Committee on Government Reform and Oversight was unable to file the 
committee report on the bill. I am therefore entering the committee 
report as prepared into the Record at this time:

       The Committee on Government Reform and Oversight, to whom 
     was referred the bill (H.R. 4237) to amend the District of 
     Columbia convention center and sports arena authorization act 
     of 1995 to revise the revenues and activities covered under 
     such act, and for other purposes, having considered the same, 
     reports favorably thereon without amendment and recommends 
     that the bill do pass.

               I. Background and Need for the Legislation


                             A. Background

       As noted by the Committee in the 104th Congress, the 
     current Convention Center was

[[Page E1519]]

     completed in 1982, at 9th and H Streets, N.W., and is widely 
     considered too small to accommodate the largest and most 
     financially attractive conventions. Over time, it is 
     estimated that the situation will only become worse. The 
     District of Columbia's existing Washington Convention Center 
     is now only the 30th largest in the country and can 
     accommodate 55% of national conventions and exhibition shows.
       The inability of the Washington Convention Center to host 
     so many events is unfortunate not only for the local economy, 
     but also for the organizations and exhibitors who can no 
     longer have the Nation's Capital on their regular schedule of 
     meeting sites. In 1993, the Washington Convention Center 
     generated $656 million in spending from its activities. In 
     1995, that spending dipped to approximately $558 million. The 
     serious blow to the District's economy caused by the slowdown 
     in activity at the Convention Center is obvious and needs to 
     be reversed. A new, state-of-the-art Washington Convention 
     Center of the appropriate size and technology to host 90% of 
     the national level conventions and shows will generate up to 
     $1.5 billion of spending in the District of Columbia. 
     Obviously, such increased economic activity will generate 
     considerable additional revenues that cannot otherwise be 
     used by the District.
       In order to gain these economic benefits, the City needed 
     to find a way to finance a new convention facility. It was 
     clear to everyone that the City's general fund could not 
     afford to continue to pay the operating subsidy for the 
     current convention center or the up-front costs for a new 
     one. As part of an effort to address this problem, the City 
     Council enacted the Washington Convention Center Authority 
     Act of 1994 (DC Law 10-188). This act established a special 
     convention center tax. It took effect on October 13, 1994. 
     This tax was composed of a fixed percentage of several pre-
     existing taxes. The convention center tax is a dedicated tax 
     which the City places in a ``lock-box'' escrow account. It 
     can be used only to pay the operating subsidy for the current 
     convention center and for expenses associated with the 
     development and construction of a new facility. In the same 
     Act, the City Council created the Washington Convention 
     Center Authority (WCCA). The WCCA is a corporate body with a 
     legal existence separate from the City government. Because of 
     the independent status of the WCCA, its self supporting 
     revenue stream, and legal accountability, its spending is not 
     subject to an annual appropriation. Although it has the power 
     to issue bonds, the debt thereby created is not general 
     obligation debt. The WCCA is governed by a nine member Board 
     of Directors. The District's Chief Financial Officer and the 
     Director of Tourism are ex-officio, voting members of the 
     board. The remaining seven members, one from the tourism 
     industry and another from organized labor, are appointed by 
     the Mayor with the advice and consent of the Council. The 
     Directors are responsible for managing the current convention 
     center; developing plans for a new convention center; 
     managing the new facility; and appointing a general manager 
     for the convention center. The Board is empowered to develop 
     a personnel system for convention center employees.
       On July 12, 1995, the Subcommittee on the District of 
     Columbia held a hearing on H.R. 1862, the District of 
     Columbia Convention Center Preconstruction Act of 1995. At 
     the July 12, 1995 hearing the Subcommittee also reviewed 
     legislation authorizing the City to finance and pay its part 
     of the costs associated with the construction of a new sports 
     arena. That facility, now known as the MCI Center at Gallery 
     Place, opened on time and has been a spectacular success. 
     Following the July 12, 1995 hearing, the legislation 
     involving the sports arena and the legislation involving the 
     Convention Center were combined into a new single piece of 
     legislation, H.R. 2108 (P.L. 104-28), which authorized the 
     WCCA to expend revenues for the operation and maintenance of 
     the existing Washington Convention Center and for 
     preconstruction activities relating to a new convention 
     center in the District of Columbia.
       The linkage of the legislation for the MCI Center and the 
     Convention Center was more than a matter of convenience. It 
     reflected the Committee's belief that together they were two 
     of the most important economic generators in the entire 
     region. The legislation was strongly supported by the entire 
     Washington Metropolitan regional congressional delegation. In 
     1995, a new convention center was still in its initial 
     planning stages. It needed and received congressional 
     authority to permit already collected taxes dedicated to this 
     project to be used in order to proceed to the planning and 
     development stage. In 1996, a newly-formed Washington 
     Convention Center Authority began actively to investigate 
     construction of a new facility.
       The WCCA has worked over the past four years to develop a 
     project that will meet the economic development needs of the 
     District of Columbia, the requirements of the community and 
     the needs of the hospitality industry.
       The regulatory process for approval of the new convention 
     center has been key to the development of the project. WCCA 
     has proceeded in accord with the statutory requirements for 
     Federal and public involvement, notification of activities 
     via the Federal Register and community newspapers, and in 
     coordination with Federal and local agencies. In addition, 
     over an eighteen month period, WCCA conducted over 100 public 
     hearings with DC Advisory Neighborhood Commissions, community 
     leaders, organizations and churches to discuss the progress 
     and to provide the community an opportunity to express their 
     views. The National Capital Planning Commission (NCPC) 
     conducted six public hearings and the DC City Council 
     conducted five public hearings. This process involved 
     participation from the NCPC, the State Historic Preservation 
     Office, Commission on Fine Arts, the National Environmental 
     Protection Agency, the Historic Preservation Review Board, 
     the Redevelopment Land Agency, and the Washington 
     Metropolitan Area Transit Authority. This process included 
     the design, location, physical program, neighborhood 
     mitigation, environmental, historical, and transportation 
     issues. The Environmental Impact Statement process alone, was 
     approximately an eighteen month activity which involved 
     written public comments, public hearings and meetings, 
     reviewing agency in-put and comments that resulted in a final 
     document with mitigation measures for the environmental 
     impacts from the construction of the new convention center.
       The development of the new convention center process was 
     initiated by the private sector in partnership with the 
     District of Columbia. The private sector financed the 
     original feasibility study, assisted in the drafting of the 
     financing legislation, and requested that taxes be imposed 
     upon hotels and restaurants which provided the financing 
     framework of the plan.


                        B. Need for Legislation

       The Committee has followed efforts to build a new 
     Convention Center in downtown Washington with great interest. 
     At this time additional congressional approval is necessary 
     before construction on the new facility may begin. H.R. 2108 
     (P.L. 104-28) expressly did not authorize the financing or 
     the construction of a new convention center. In order for the 
     City to proceed beyond the planning and design phase, 
     explicit, affirmative congressional action is necessary.
       The Federal role in this project is very narrow. Here, 
     Congressional action is necessary for the convention center 
     project to move beyond the pre-construction stage. This 
     legislation, H.R. 4237, authorizes the WCCA to begin 
     financing (the issuance of bonds up to $650 million) and 
     construction of a new Washington Convention Center and waives 
     the 30-day waiting period for DC Council Act 12-402 to go 
     into effect.

                 II. LEGISLATION AND COMMITTEE ACTIONS

       On July 16, 1998, Delegate Norton introduced H.R. 4237. 
     H.R. 4237 was cosponsored by Chairman Thomas M. Davis, Mrs. 
     Morella, Mr. Moran of Virginia, and Mr. Wynn. It was referred 
     to the Committee on Government Reform and Oversight.
       The Subcommittee on the District of Columbia held a hearing 
     on July 15, 1998. The bill was polled by the Subcommittee on 
     the District of Columbia and marked-up by the Committee on 
     Government Reform and Oversight on July 23, 1998. There were 
     no amendments offered. The bill was favorably reported to the 
     House by a unanimous vote.

             III. COMMITTEE HEARINGS AND WRITTEN TESTIMONY

       On Wednesday, July 15, 1998, the Subcommittee on the 
     District of Columbia, of the Committee on Government Reform 
     and Oversight, met pursuant to notice. The purpose of the 
     hearing was to review the financing package for a new 
     Washington Convention Center.
       Chairman Thomas M. Davis of Virginia stated at the opening 
     of the hearing that a new convention center was important for 
     the economic and cultural well being not only of our Nation's 
     Capital but for the entire Washington metropolitan region. He 
     emphasized the cooperative nature of the project and the 
     close and continued oversight by the DC Financial Control 
     Board of the project. He called specific attention to the 
     narrow scope of the Congressional role in the development of 
     a new Washington Convention Center. Ranking Member Norton, 
     who introduced the legislation, stressed the importance of 
     her legislation to the City's economic recovery and future 
     vitality. Subcommittee Vice-Chair Morella and Representative 
     Moran of Virginia also stressed their support for the 
     economic and cultural benefits of the project for the entire 
     metropolitan region.
       The first panel consisted of witnesses from the Government 
     of the District of Columbia and the Washington Convention 
     Center Authority. Each witness expressed strong support for 
     the project. Mayor Marion Barry focused on the economic 
     benefits of the project for residents. Financial Control 
     Board Chairman Andrew Brimmer stressed that the Authority had 
     thoroughly reviewed and then unanimously approved the new 
     Washington Convention Center project. He stated that the 
     Authority was confident that the project would stay within 
     budget and that the financing package was fiscally sound and 
     in the best interests of the City. He also stated that in 
     granting its approval, the Authority gave serious 
     consideration to concerns expressed by various groups, 
     including the Committee of 100, a community land use planning 
     organization. Dr. Brimmer also emphasized that the project is 
     one of the most important such projects ever to be undertaken 
     by the government of the District of Columbia and that the 
     Authority would continue its oversight role as the project 
     developed. City Council Chair Linda Cropp and Council member 
     Charlene Drew Jarvis testified in support of the importance 
     of the

[[Page E1520]]

     project to the future of the City and as to the role the 
     Council played in the enactment of DC Act 12-402. President 
     and CEO of Host Marriott Corporation and WCCA Chairman 
     Terence Golden testified as to the need for a new facility 
     and to the fact that the project has been designed to meet 
     the needs of WCCA's target market, which consists of 
     professional associations, corporate conventions, and 
     international meetings. He reviewed the complex approval 
     process that the project has cleared and the significance of 
     the total economic output of the facility. He stated that by 
     the fifth year of operation, the region as a whole is 
     expected to realize as much as $1.4 billion in total output 
     from a new Washington Convention Center and 17,589 full and 
     part time jobs. Mr. Golden emphasized that the construction 
     management contract has been structured in such a way as to 
     encourage cost savings and that any construction cost 
     overruns would be borne by the Construction Manager. He 
     testified that the total cost for the entire project is $650 
     million, inclusive of the guaranteed maximum price (GMP). The 
     WCCA budget also anticipates that improvements to the Mount 
     Vernon Metro Station ($25 million) and some off-site utility 
     relocation costs ($10 million) above the $650 million will be 
     funded through Congressional appropriations or Federal 
     grants.
       The second panel was comprised of Gloria L. Jarmon, 
     Director, Health, Education, and Human Services Accounting 
     and Financial Management Issues of the General Accounting 
     Office; and Rick Hendricks, Director, Property Development 
     Division, Public Buildings Service, National Capital Region 
     of the General Services Administration. Ms. Jarmon testified 
     that GAO had identified approximately $58 million is related 
     expenses above the WCCA total project budget of $650 million. 
     She testified that this amount above the $650 million 
     included costs that WCCA has allocated to industry vendor 
     contracts ($17 million) and Federal appropriations or grants 
     for metro and infrastructure improvements ($35 million). Ms. 
     Jarmon stated that GAO's audit determined that WCCA's 
     financing stream is a conservative plan relative to estimates 
     provided by management consultants and the District, and to 
     GAO's evaluation of trends in tax collections and the 
     national and local economic outlook. Mr. Hendricks testified 
     that GSA assisted in the development of WCCA's contracting 
     methodology and that GSA finds the proposed project contract 
     to be appropriate. He stated that the contract appears to 
     have a high probability of being completed within budget and 
     on schedule and that it establishes a reasonable allocation 
     of risks. Mr. Hendricks also stated that the GAO identified 
     costs above WCCA's $650 million budget were handled in an 
     acceptable manner in accord with convention/exhibition 
     industry practice.

                      IV. EXPLANATION OF THE BILL


                              A. Overview

       To amend the District of Columbia Convention Center and 
     Sports Arena Authorization Act of 1995 to revise the revenues 
     and activities covered under such Act, and for other 
     purposes.


                     B. Section by section analysis

 Section 1. Revenues and Activities Covered Under District of Columbia 
             Convention Center and Sports Arena Act of 1995

       Subsection (a) waives restrictions on the Washington 
     Convention Center Authority with respect to the expenditure 
     or obligation of any revenues for the financing of the new 
     Washington Convention Center.
       Subsection (b) sets forth the rule of construction 
     regarding revenue bond requirements under the District of 
     Columbia Home Rule Act.

  Section 2. Waiver of Congressional Review of Washington Convention 
            Center Authority Financing Amendment Act of 1998

       This section waives the 30-day waiting period required for 
     City Council Acts to take effect.

                       V. COMPLIANCE WITH RULE XI

       Pursuant to rule XI, 2(l)(3)(A), of the Rules of the House 
     of Representatives, under the authority of rule X, clause 
     2(b)(1) and clause 3(f), the results and findings from those 
     oversight activities follow.


                           A. Recommendations

                        1. New convention center

       The Committee notes that the Federal role in this project 
     is narrow. In 1995, the Congress and the President enacted 
     legislation which enabled the District of Columbia and the 
     Washington Convention Center Authority (WCCA) to go forward 
     with its part of the costs associated with the development of 
     both the MCI Center at Gallery Place and to begin 
     consideration and pre-construction activities for a new 
     convention center. The MCI Center has proven to be a 
     spectacular success, and the Committee is proud of the role 
     it played in making that project possible.
       The Committee commends the hard work done by the WCCA, City 
     Council, Control Board, the National Capital Planning 
     Commission (NCPC), and community leaders to move the project 
     one step closer to completion. Under ideal circumstances 
     planning and construction of a convention center marks an 
     important, new phase in the life of a metropolitan region. 
     Three years ago, when the Committee started down this road, 
     it was not the best of times for the Nation's Capital. Today, 
     things are different. Not only have we made substantial 
     progress in restoring economic stability and prosperity to 
     the City, the Committee is convinced that projects such as 
     the MCI Center itself has been a positive element in the 
     City's continuing recovery. The MCI Center is a dynamic 
     attraction in the center of the City. The Committee believes 
     that a new Convention Center will only enhance the economic 
     and cultural renaissance of downtown Washington.
       The Committee expects the continued oversight of the WCCA 
     project by the Control Board and GAO to ensure that financed 
     project costs do not exceed $650 million.


                              B. Findings

       The Committee recognizes the new convention center as being 
     absolutely essential to the revitalization of the District's 
     economy. After years of planning and preliminary review, 
     local officials have decided to proceed with construction of 
     a bigger and better convention center north of Mount Vernon 
     Square.
       The work of the General Accounting Office and the General 
     Services Administration has been invaluable to the work of 
     the Subcommittee on the District of Columbia. With out the 
     many long hours of hard work the GAO audit team invested in 
     its investigation of these projects and without the guidance 
     and review provided by the GSA project team, Congress would 
     not have the confidence to permit the City to move forward 
     with this project. The Committee commends all parts of the 
     District government on having worked together so 
     constructively. The Financial responsibility and Management 
     Assistance Authority is empowered to approve or disapprove 
     all City borrowing. They must sign off on the financial 
     package, and after reviewing information from both proponents 
     and opponents of the project they have unanimously approved 
     the project. The Control Board has in effect reported to 
     congress that all aspects of the project, including borrowing 
     and costs, are compatible with the best interests of the 
     City. This judgment has great credibility with the Committee.

                  VI. BUDGET ANALYSIS AND PROJECTIONS

       This Act provides for no new authorization or budget 
     authority or tax expenditures. Consequently, the provisions 
     of section 308(a)(1) of the Congressional Budget Act are not 
     applicable.

         VII. COST ESTIMATE OF THE CONGRESSIONAL BUDGET OFFICE


                                                     U.S. Congress


                                   congressional budget office

                                    Washington, DC, July 30, 1998.
     Hon. Dan Burton,
     Chairman, Committee on Government Reform and Oversight,
     U.S. House of Representatives, Washington, DC
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for H.R. 4237, a bill to 
     amend the District of Columbia Convention Center and Sports 
     Arena Authorization Act of 1995 to revise the revenues and 
     activities covered under such act, and for other purposes.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is John R. 
     Righter, who can be reached at 226-2860.
           Sincerely,
     June E. O'Neill,
                                                         Director.
       Enclosure.


          Congressional Budget Office Cost Estimate--H.R. 4237

       H.R. 4237 would authorize the Washington Convention Center 
     Authority to issue revenue bonds to finance the cost of 
     constructing a new convention center in the District of 
     Columbia. The Joint Committee on Taxation estimates that the 
     bill would not effect governmental receipts. In addition, CBO 
     estimates that the bill would have no impact on federal 
     spending. Thus, pay-as-you-go procedures would not apply to 
     the bill. H.R. 4237 contains no intergovernmental or private-
     sector mandates as defined in the Unfunded Mandates Reform 
     Act and would impose no costs on state, local, or tribal 
     governments.
       The CBO staff contact is John R. Righter, who can be 
     reached at 226-2860. This estimate was approved by Robert A. 
     Sunshine, Deputy Assistant Director for Budget Analysis.

      VIII. SPECIFIC CONSTITUTIONAL AUTHORITY FOR THIS LEGISLATION

       Clauses 1 and 18 of Article 1, Section 8 of the 
     Constitution grant Congress the power to enact this law.

                     IX. COMMITTEE RECOMMENDATIONS

       On July 23, 1998, a quorum being present, the Committee on 
     Government Reform and Oversight adopted and ordered the bill 
     favorably reported by voice vote.

    X. CONGRESSIONAL ACCOUNTABILITY ACT; PUBLIC LAW 104-1; SECTION 
                               102(b)(3)

       The Committee finds that the legislation does not relate to 
     the terms and conditions of employment or access to public 
     services or accommodations within the meaning of section 
     102(b)(3) of the Congressional Accountability Act (PL 104-4).

    XI. UNFUNDED MANDATES REFORM ACT; PUBLIC LAW 104-4, SECTION 423

       The Committee finds that the legislation does not impose 
     any Federal mandates within the meaning of section 423 of the 
     Unfunded Mandates Reform Act (PL 104-4).

[[Page E1521]]

    XII. FEDERAL ADVISORY COMMITTEE ACT (5 U.S.C. APP.) SECTION 5(b)

       The Committee finds that the legislation does not establish 
     or authorize establishment of an advisory committee within 
     the definition of 5 U.S.C. App., Section 5(b).

      XIII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

       In compliance with clause 3 of rule XIII of the Rules of 
     the House of Representatives, changes in existing law made by 
     the bill, as reported, are shown as follows (existing law 
     proposed to be omitted is enclosed in black brackets, new 
     matter is printed in italic, existing law in which no change 
     is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

       In compliance with clause 3 of rule XIII of the Rules of 
     the House of Representatives, changes in existing law made by 
     the bill, as reported, are shown as follows (existing law 
     proposed to be omitted is enclosed in black brackets, new 
     matter is printed in italics, existing law in which no change 
     is proposed is shown in roman):

 DISTRICT OF COLUMBIA CONVENTION CENTER AND SPORTS ARENA AUTHORIZATION 
ACT OF 1995

                           *   *   *   *   *


                       TITLE I--CONVENTION CENTER

     SEC. 101. PERMITTING WASHINGTON CONVENTION CENTER AUTHORITY 
                   TO EXPEND REVENUES FOR CONVENTION CENTER 
                   ACTIVITIES.

       [(a) Permitting Expenditure Without Appropriation.--The 
     fourth sentence of section 446 of the District of Columbia 
     Self-Government and Governmental Reorganization Act (sec. 47-
     304, D.C. Code) shall not apply with respect to any revenues 
     of the District of Columbia which are attributable to the 
     enactment of title III of the Washington Convention Center 
     Authority Act of 1994 (D.C. Law 10-188) and which are 
     obligated or expended for the activities described in 
     subsection (b).
       [(b) Activities Described.--The activities described in 
     this paragraph are--
       [(1) the operation and maintenance of the existing 
     Washington Convention Center; and
       [(2) preconstruction activities with respect to a new 
     convention center in the District of Columbia, including land 
     acquisition and the conducting of environmental impact 
     studies, architecture and design studies, surveys, and site 
     acquisition.]
       /The fourth sentence of section 446 of the District of 
     Columbia Home Rule Act (DC Code, sec. 47-304) shall not apply 
     with respect to the expenditure or obligation of any revenues 
     of the Washington Convention Center Authority for any purpose 
     authorized under the Washington Convention Center Authority 
     Act of 1994 (D.C. Law 10-188).

                           *   *   *   *   *




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