Potomac Yard Arena Deal would be a Monumental Disaster for Virginia
Originally published in Richmond Times-Dispatch
I grew up in Fairfax County, attended Virginia Tech for college, and have lived in Arlington and Alexandria. I have been a lifelong, avid DC sports fan and proud to call Northern Virginia my home. That is why I oppose the Monumental Sports stadium deal for the Potomac Yards Entertainment District to bring the Capitals and the Wizards to Alexandria. While deal proponents argue that the project will usher in a new era of economic prosperity, a closer examination reveals an all-too familiar pattern – billions of taxpayer dollars given to a few wealthy individuals with no strings attached. It is an ill-conceived plan that could burden Virginians with exorbitant costs while delivering questionable, if any, benefits.
Decades of economic research have consistently shown that public financing for sports stadiums rarely lives up to the promises made by their advocates. In 1997, economists Andrew Zimbalist and Roger G. Noll concluded that new sports facilities have a minimal, if not negative, impact on overall economic activity and employment. A 2001 report from the Federal Reserve Bank of St. Louis further emphasized that taxpayers often receive little in return for their substantial investments. Between 1970 and 2020, state and local governments in the United States and Canada collectively spent approximately $33 billion in public funds on major-league sports venues, approximately 73 percent of construction costs. Despite this investment, economist after economist continues to find that stadium deals are simply bad investments.
Unfortunately, it appears the proposed Entertainment District in Potomac Yards is on track to follow this troubling trend. Governor Youngkin's proposal requires the General Assembly to authorize $2 billion in public bonds, with an additional burden of up to $106 million placed on the citizens of Alexandria. Monumental Sports & Entertainment, the conglomerate behind the Capitals and the Wizards, would contribute a mere $403 million, representing less than 20 percent of the project's estimated cost. This skewed financial arrangement raises serious questions about the true beneficiaries of the deal
In 2017, Sports Fans Coalition published the Danifesto, a list of conditions we wanted included with any public funding Dan Snyder might receive for a new Washington football team stadium. If taxpayers were going to pay for a stadium, taxpayers should experience real, tangible benefits from the facility. For example, condition the funding on free tickets for veterans, discounts for public school teachers, practice and playing time for youth football leagues, and other public benefits. If team owners don’t like the conditions taxpayers demand, then don’t take the taxpayer money. But Snyder never got his deal. Today’s Caps and Wizards deal seems even more like a multibillion-dollar handout to wealthy team owners than some of the proposals to Snyder. Those demands from six years ago may not be enough to make up for the roughly $1.5 billion taxpayers are expected to pay.
None of this even addresses the myriad of other concerns which have not been addressed in public statements or what little of the proposal is public. The entire deal came together quickly in backrooms, not in public settings where the community was invited to engage in a meaningful way. Traffic and infrastructure challenges also loom large. Route 1 is already a border-line parking lot, and not even a new metro stop will help alleviate the congestion, especially during rush hour when many of the games start. Environmental sustainability cannot be overlooked, either. Proposed renderings place the Entertainment District adjacent to environmentally-sensitive wetlands, necessitating strict compliance with relevant state and federal environmental protection regulations. Finally, we must address taxpayer equity. The estimated economic benefits outlined in the proposal are dubious at best but, if realized, would only benefit the immediate community. Virginians statewide, regardless of their proximity to the Entertainment District, should not bear the financial burden without reaping the supposed rewards.
The Monumental Sports Stadium Deal, as currently structured, poses a monumental disaster for Virginia. As responsible stewards of public funds, lawmakers should simply vote no when the proposal comes before the General Assembly.