City Desk

Ballers and Cents: Why Is the District Helping Buy Land for a D.C. United Stadium?

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When it comes to stadium financing, the private sector ain’t what it used to be.

Consider the Verizon Center. When Abe Pollin, the former owner of the building and its primary tenants, the Washington Wizards and Washington Capitals, died four years ago, every tribute made sure to note that he’d paid to construct the downtown arena himself. Which was true—as long as you overlooked the $70 million (worth more than $101 million in today’s dollars) the District government put up to acquire the land it sits on and improve infrastructure in the area. Or the $50 million in improvements the city bought for Pollin in 2007, a sort of 10th birthday present to the stadium. Set against the $693 million the District paid to build Nationals Park outright, of course, the $120 million the public gave Pollin looks downright stingy.

Compared to math like that, the deal the city reached with D.C. United last week for a soccer stadium on Buzzard Point looks pretty decent. The District would provide land and infrastructure improvements worth about $150 million; the team would pay another $150 million to build the actual arena. If the team (which loses money in its current home, RFK Stadium) makes an undefined “reasonable profit,” the city would get a cut. The complicated land swaps involved in the deal would also help the District spur development on the valuable real estate now occupied by the Reeves Center at 14th and U streets NW and build a new municipal office building at Anacostia Gateway, which officials hope will help create the kind of boom there that the Reeves Center did 20 years ago on U Street. And the team, a four-time Major League Soccer champion, would finally get a less-rickety home for about 20,000 fans, with sight lines built for soccer instead of baseball and football.

Just because the stadium deal is a better deal than most cities get for subsidizing arenas, though, doesn’t necessarily make it a bona fide good deal. D.C. United is a passion of mine: I went to my first game in 1996, the league’s inaugural year; I’ve had season tickets for 13 years; I bring my toddler daughter to enough games that she yells the team’s name when she sees its black-and-red logo; and I’ve traveled near (Gaithersburg—during rush hour!) and far (Los Angeles and Harrison, N.J.) to support the club. But I’d be even more excited about buying seats in the new stadium for the 2016 season if there was no public money for it at all.

Financially, D.C. United could afford to cover the whole $300 million tab on its own. The team’s primary owner, Erick Thohir, is the biggest media mogul in Indonesia; he also owns the Philadelphia 76ers basketball team and is reportedly negotiating to buy a majority stake in Italian soccer power Inter Milan. California venture capitalist Will Chang, one of Thohir’s partners, is a part-owner of the World Series–champion San Francisco Giants. Neither of them needs a handout from District taxpayers.

Even with recent budget surpluses, the District still has needs that go unfunded. Finding $8 million to keep the city’s libraries open on Sundays, for instance, took years. Why is a soccer stadium a better investment than increasing affordable housing, building more public parks, expanding efforts to control flooding in Bloomingdale, or any other item on city government wish lists lately? If the land swaps and development involved make so much sense as a real estate proposition, why wouldn’t private investors want to finance it all themselves, to make potential windfall profits down the line? And if selling the Reeves Center to a private developer makes sense as part of the stadium deal, shouldn’t the city just sell it on its own and keep the money?

The consolation for civic-minded soccer fans is that United didn’t push particularly hard to bluff its way into leaving town, the usual threat sports teams make to scare elected officials into building them stadiums. The team tried to build a facility in Prince George’s County a few years ago under previous ownership, but that deal fell apart; negotiations to move the club to a publicly funded stadium in Baltimore never seemed to get very far. Ownership and management insisted they wanted to stay in the District, and unlike the Nationals—whose owners last year tried to demand that Metro pay to keep trains running past the usual closing time to bring fans home from the team’s publicly funded stadium during the playoffs—the club goes out of its way to be a good corporate citizen. And like Pollin’s Verizon Center, the new D.C. United stadium will at least see the for-profit sports franchise that benefits from it pay for most of the construction of the building.

What the early praise for the Buzzard Point package really shows is what a lousy deal stadiums typically are for taxpayers. Only graded on the generous curve of stadium financing is United doing the public any favors. Keep that in mind as Mayor Vince Gray and Ward 2 Councilmember Jack Evans, who wants his job, muse aloud about bringing the Washington Pigskins back from Landover, Md., where they decamped in 1997 after former owner Jack Kent Cooke built the team a $250 million RFK replacement (which, like Verizon Center’s deal in D.C., also got $70 million in road and infrastructure funding from Maryland taxpayers). These arrangements have a tendency to get worse as they age, too: The Nats ballpark, after all, was originally supposed to cost the city “only” $440 million; by the time it actually opened in 2008, the price had gone up by 50 percent, in part due to land acquisition.

Ultimately, the District’s budget may make out OK under the D.C. United proposal. But if you expect the city to come out ahead every time a sports team comes calling, I’ve got a bridge in Brooklyn to swap you.

Stadium rendering via D.C. United

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