As promised, the D.C. Fiscal Policy Institute has been digging into the nuances of the proposed D.C. United stadium deal on its blog, most recently with a pair of posts outlining how the land swap for the stadium site would work, and how the term sheet divides up the construction costs. Among the highlights:
- “It is not clear why stadium land acquisition has to happen through swaps. The District could sell the Reeves Center and other valuable properties to the highest bidder and then use the proceeds to buy stadium land.” DCFPI notes that the Washington Post reported that D.C.’s chief financial officer had previously estimated the Reeves Center to be worth as much as $186 million, and would be swapped for a parcel worth an estimated $100 million; if formal appraisals of the land values differ, the soccer team would pay D.C. the difference, but there’s no guarantee that appraisals will actually match up with what land could fetch on the open market.
- As discussed here previously, D.C. would guarantee United a “reasonable profit” (whatever that means), kicking back property and sales taxes if team profits fall short, something that DCFPI calls a “soccer safety-net for DC United.” DCFPI here notes something that hadn’t initially occurred to me: Because sports teams, especially in leagues clamoring for public attention like MLS, will often take on big expenses as loss leaders — they cite the Seattle Sounders‘ recent acquisition of Clint Dempsey here, though part of that cost was covered by the league — “by subsidizing DC United if it faces operating losses, the District would essentially pay for players and other investments aimed at improving the team’s future bottom line.”