Feb 08, 2006 3:44 AM EST

The District of Columbia Council rejected a lease for the Washington Nationals' new ballpark on Tuesday, leaving the district's government and Major League Baseball headed to arbitration.

The council voted 8-5 against approving the lease, but then returned to session an hour later in an attempt to revive the deal.

As part of the deal to lure the Montreal Expos after the 2004 season, Washington agreed to spend money on construction and land acquisition for the stadium, to be built along the Anacostia River waterfront. The council voted then to authorize up to $535 million in bonds, but the price of construction is thought to have escalated.

"The majority of the council took a shortsighted view in denying this lease," Mayor Anthony A. Williams said. "We're not saving money for the district, we're not saving money for the project, we're not even really bringing economic benefit to our citizens."

Via ESPN