I have a particular interest in the internal politics of the Washington Post’s editorial hierarchy when it comes to stadium economics, so it’s been fascinating for me to watch the last couple of days, in which the Post editorial board gave an only slightly qualified endorsement to the D.C. United stadium plan, only to have their own stadium reporter point out a laundry list of reasons to be worried about the potential risks involved.
First the editorial: On Sunday, the Post editors showed that they’d skimmed the executive summary of the Convention, Sports & Leisure report on the stadium deal, writing that “a major league soccer stadium in the District would bring revenue, jobs and economic development to the city” (true, if you accept CSL’s never-explained-in-the-report methodology at face value) but that D.C. might not be getting the best price in the land swap that is at the heart of the deal — which was the one qualm that CSL highlighted as well. Wrote the Post: “Why not separate the transactions in a way that ensures fair market value for both properties and dispels any suggestion of a sweetheart deal?”
That’s perfectly reasonable, and something that could be agreed upon by all parties, and if this were the only thing that suggested a sweetheart deal, the Post editors would be doing a fine job. Except that the next day their stadium reporter, Jonathan O’Connell, who actually went to last week’s council hearing on the stadium plan, proceeded to run down a list of eight risks that the city would be running with the United plan, none of which were spelled out in the CSL report but any of which could be figured out by 1) reading it thoroughly and 2) using your brain:
- Akridge, the developer carrying out the land swap, can terminate it unilaterally if D.C. makes any changes that “materially impact” it, which would leave the district on the hook for any money already shelled out.
- There’s no cap on cleanup costs for the two sites in the land swap, which could push district costs beyond the $150 million projection.
- If the district buys the land, then D.C. United later decides that building a stadium is too rich for its blood, D.C. would be, in technical financing terms, screwed.
- D.C. has to spend its money by the end of 2016, while United can back out anytime before March 2018.
- The most that D.C. can get in damages if United backs out is $5 million.
- This is a potentially huge one: Part of the plan is for the government employees at the Reeves Center, which would be traded away in the land swap, to move to a new building in Anacostia — which not only hasn’t been built yet, but which hasn’t even begun planning. If that ends up being delayed, D.C. could be forced to throw in additional money to house its workers somewhere in the interim.
- The United plan doesn’t specify who will pay for maintenance and upgrades of the stadium.
- As former city administrator Robert Bobb testified at the hearing, “there is a high probability that at some point [the team] would seek a permanent property tax exemption” on the stadium. According to the CSL report (see chart on page 14), this would cost the District an additional $40.4 million in lost future property tax income.
These are all pretty significant concerns, though it’s always possible that United’s owners (or D.C. officials) have answers for some of them. If nothing else, it’s something that points up the need for the District to take their time on this, and not rush into a deal without fully vetting all of the possible risks involved with — sorry, what’s that, last paragraph of Sunday’s Post editorial?
The District can’t afford to dawdle. Monies need to be allocated this year. D.C. United, playing in a stadium that is ill-suited to its needs, won’t wait forever. And the team is willing to pay for its own stadium, which should make it attractive to other jurisdictions — including neighboring Maryland, which just elected a Republican governor who promised to be more competitive in going after business.
Oh, right, I forgot: The team could move to a stadium in Maryland that doesn’t exist yet and hasn’t even begun being planned for OMG OMG OMG. When it comes to making decisions based on fear, we always have been susceptible to focusing on all the wrong threats.