The revised stadium agreement that D.C. United got D.C. Mayor Muriel Bowser to sign back in June (after threatening to back out of the deal and move to Virginia instead) required the city to either buy the stadium land or move to seize it by eminent domain by the end of September — and hey, look what day it is today! So what’d they end up doing?
As the courts closed at 5 p.m. the city had not filed [an eminent domain] suit, and Joaquin McPeek, a spokesman for Bowser’s deputy mayor for economic development, declined to comment.
Almost two hours later, McPeek said that the District had made an after-hours filing, electronically, but offered no explanation for the apparent last-minute scramble in the mayor’s office.
Anyway, the point is, D.C. is going to force the site’s property owners to sell, and then use the courts to set a price. Because a private soccer stadium is clearly a public good. I mean, if the Supreme Court says a vacant lot can be, why not?
The city of Washington, D.C. and D.C. United have officially agreed to a new stadium deal! Yes, they already officially agreed to one last December, but apparently they left out a few things, and then one thing led to another and suddenly team execs were lunching with development officials from Virginia, and anyway, now it’s really settled, so the stadium is happening for sure.
Along with the previously announced $183 million in public cash and tax breaks, the new, updated deal provides that:
- D.C. United will agree to pay for half of the first $20 million in any cost overruns.
- The team will also provide a $5 million escrow fund to reimburse the district for its costs if the stadium ends up not getting built for any reason.
- The district has to either reach an agreement to buy the stadium land by September 30, or begin eminent domain proceedings to seize the land from its current owners. If it fails to do so, United can seek to relocate elsewhere.
This is maybe a marginally better deal for taxpayers than the earlier one — originally United’s owners weren’t going to pay anything for cost overruns, so $10 million is better than nothing. It’s still the case, though, that the team’s costs are capped, while the public’s are not. But then, it’s not like D.C. has any experience with sports stadium projects sticking taxpayers with ballooning costs.
When last we checked in on the new D.C. United stadium last December, the D.C. council had just approved $183 million in cash and tax breaks and construction was set to begin real soon now. So that’s that, and — hoooooooooold everything!
In the past three weeks, team officials have toured sites in Loudoun County, lunched with a Loudoun supervisor in New York and hosted a meeting with Virginia economic development officials at the team’s offices at RFK Stadium.
What seems to be going on here is that while the funding for the D.C. stadium is approved, all the paperwork hasn’t been — new mayor Muriel Bowser is still negotiating a “development contract” with the team’s owners to govern such things as cost overruns. So, naturally, it’s off to Virginia, where Gov. Terry McAuliffe has built a reputation for throwing public money (and personalized phone calls) at companies to get them to relocate to his state. Loudoun County officials say they can build a stadium for less than it will cost in D.C. (which probably doesn’t matter much to D.C. United owner Erick Thohir, since he’s not paying for most of it), and get it open in less than two years (which probably does, but is also pretty implausible unless they plan to make it out of plaster).
Anyway, this is almost certainly gamesmanship by Thohir — even the Washington Post obliquely notes that “it is possible D.C. United is using the discussion to gain leverage in the final negotiations over a Washington stadium” — while McAuliffe takes the opportunity to burnish his reputation as a Guy Who Gets Things Done (With Wads Of Cash And Tax Breaks). Not that it’s impossible that the D.C. deal falls apart and Loudoun emerges as a viable suitor, but seriously, with all the years that the D.C. United stadium squabble dragged on, if Thohir really wanted to go to the distant suburbs, don’t you think we’d have heard about it way before now?
The Washington, D.C. city council made it official yesterday, voting 12-0 to approve spending $140 million in city money on a new D.C. United soccer stadium at Buzzard Point, plus a 20-year property tax abatement worth $43 million. Of that, $33 million will come from money shifted from other, unspecified capital projects, while $106 million will come in the form of new city borrowing, to be repaid via … something. See, it’s all settled!
What is officially the “District of Columbia Soccer Stadium Development Emergency Act of 2014” — presumably called so because it had to be in order to get enacted on short notice, but it still betrays a certain irony deficiency among D.C. politicians — breaks the record for the largest MLS stadium subsidy ever. (The previous record holder depends on who’s counting, though it’s likely either the Colorado Rapids stadium in Commerce City, which got $120 million according to Judith Grant Long, or the Chicago Fire stadium in Bridgeview, which collected $98 million according to Robert Baade and Victor Matheson.) Though apparently irony isn’t the only thing the bill’s authors are deficient in: One clause extends the deadline for acquiring the stadium land to “September 31, 2015,” which is a pretty neat trick.
But forget all those “numbers” and that “money” — the important thing, as the Washington Post notes, is that the soccer stadium approval gives outgoing mayor Vincent Gray a “legacy” and a “signature economic development project, one that neither of the two preceding mayors were able to accomplish.” Or, looked at another way, Gray finally gave in to the demands for $183 million in subsidies for a private soccer team that earlier mayors had refused to cough up. Isn’t it great how in politics, everything has two equally valid sides?
The New York Times real estate section has a long piece up today about plans for a new D.C. United stadium, because … actually, I’m not sure why. The New York Times real estate section usually focuses on, you know, New York, and even if the D.C. council is voting on the United stadium plan today, it seems a bit outside the usual bounds, but, you know, whatever.
The article itself interviews the owner of D.C. United, the owner of the development company that owns the stadium land, D.C.’s planning director, D.C.’s incoming mayor, and one woman who lives in the planned stadium neighborhood, presumably for local color. My Vice Sports colleague Aaron Gordon has put together a Storify detailing all the flaws in this piece, but seriously, people, it’s a New York Times real estate section article. This is not, and never has been, journalism; it’s a service provided to realtor advertisers that dutifully identifies which neighborhoods real estate professionals are trying to hype as up-and-coming, enabling them to sell more housing there at inflated prices, and thus plow more money back into ads in the Times real estate section. It’s a win-win! Unless you 1) rent in a neighborhood thus targeted or 2) prefer to have news in your newspaper, but those people will be crushed like grapes by the tide of history, right?
Anyway, if you insist on reading the article beyond the “Real Estate” slug at the top, Gordon’s Storify is a worthwhile corrective. But really, you have better uses for your time. How about this article on how economic inequality is helping to drive the Uber economy? Or one about how ground squirrels are accelerating global warming? I never did like the look of those guys.
Outgoing D.C. mayor Vincent Gray and incoming mayor Muriel Bowser have reached an agreement on how to raise cash to fund land and infrastructure for the new D.C. United stadium, and it’s … “take the money from somewhere else and figure it out later”:
The details remain vague, but Gray announced on Thursday that he will send to the council a supplemental budget and a series of so-called “reprogrammings” — funding shifts from one pot to another — to cover the District’s anticipated $139 million share of the $300 million project.
(The council actually approved $150 million in spending, which should cover any additional money that developer Akridge wants for its property, unless it doesn’t.)
Sure would be nice to know what’s getting deprogrammed to find money for the stadium, but that’s one of the details Gray hasn’t revealed yet. The council holds its final meeting of the year on Tuesday, so presumably he’ll announce it by then, but maybe not much before then.
Not only did the D.C. council approve the revised $177 million subsidy package (I know I said $168 million yesterday, but I added wrong, sorry) for a D.C. United stadium yesterday, they did it unanimously, which I didn’t think D.C. politicians were even allowed to do. The council still needs to vote on the deal a second time on December 16 before it receives the final okay, but that’s a mere formality at this point, unless Erick Thohir kills somebody in the next two weeks.
As for where to come up with the $99 million needed to buy the land for the new soccer stadium, the council still hasn’t quite figured that out, kicking the can down the road to future budgets. For the initial payment, since outgoing mayor Vincent Gray had a hissy fit and decided not to send in a revised budget for the new stadium plan since it wasn’t his plan, dammit, council president Phil Mendelson instead resurrected an old budget bill Gray has submitted in June but which was never passed. Gray cried foul, but said he’ll now submit a new budget bill that includes stadium funds, so everyone is happy, anyway. Unless you’re unhappy with giving $177 million in public money to an MLS team owned by a billionaire Indonesian media mogul, of course, but only naysayers would say nay to that, right?
The Washington Post’s coverage gave credit to Gray, Mendelson, and incoming mayor Muriel Bowser for “deft dealmaking” in crafting a stadium plan that “had changed considerably” from the original version, but really it’s almost identical to the original plan: The way that D.C. will come up with its money has changed (just raiding the capital budget instead of selling the Reeves Center), but the amount that it’s spending on the stadium is virtually unchanged, and still a record public subsidy for any MLS venue. D.C. United fans will at least now get the soccer-only stadium they’ve been waiting for pretty much forever, but D.C. residents will be doing without whatever else the District would have been spending its capital budget money on if not for this deal. Hope you guys really like soccer.
So we now know what the D.C. council is going to vote on as its revised D.C. United stadium funding plan today:
- Instead of swapping the city-owned Reeves Center office building for stadium land, the District would spend $37 million out of its existing capital budget, borrow an additional $62 million, and repay that … somehow. That bit would need to be figured out in a supplemental budget request, either by current mayor Vincent Gray, or by new mayor Muriel Bowser when she takes over in January.
- D.C. United would no longer get sales-tax kickbacks worth $7 million, but would still get property-tax breaks worth $43 million. “Cutting all of the abatements might be a wonderful idea, but what is before us is the result of negotiations,” explained council president Phil Mendelson, if you have a lenient definition of “explained.”
This, then, is pretty similar to the fairly crappy deal that the D.C. council was considering earlier this year: The city would still be spending $90 million on land, plus $35 million on infrastructure, plus $43 million on property-tax breaks, for a total public cost of $168 million, which unless I’m mistaken would be the biggest MLS stadium subsidy in history. And all of the risks of the old deal would remain in place, plus the added risks of what happens if an eminent-domain court rules that the city has to pay more than $90 million for the stadium land, plus how this would constrain D.C. in future uses of its capital budget.
That said, it may still be a crappy deal, but it’s this council’s crappy deal now, so expect that it will likely be voted in. (Then the council will have to vote on it again later this month, because that’s how they do things in D.C.) Watch the council debate live here way at the end of the hearing that starts at 11 am, once they’re done with the Marion S. Barry, Jr., Ceremonial Recognition Resolution of 2014 and the D.C. Rocks, So We Need One Act of 2014.
Check it out! The Washington Post editorial board, which usually has a hard time finding a stadium deal it doesn’t like, has actually called for the D.C. council to slow down on its D.C. United stadium plan and rethink the tax breaks that are set to go along with it:
Before blithely rubber-stamping the breaks, as has been the council’s tendency when it comes to providing this benefit to developers, council members should determine if there is a real need. As the D.C. Fiscal Policy Institute pointed out in a recent blog post, “Every dollar in tax breaks for DC United is a dollar not going into the city’s coffers that could be used for education, public safety, health care, or other services.”
Now, maybe this is just the Post going along with the current political winds in city government, what with the council president openly calling for pulling back $8.4 million in sales tax rebates, at least. And yeah, they did run the editorial on the day after Thanksgiving, when maybe 12 people total read it. (The council is set to vote on the revamped United stadium deal tomorrow, so today would have been a good day to run the editorial, you’d think.) Still, it’s a significant shift from last month’s “can’t afford to dawdle,” and it favorably quotes the D.C. Fiscal Policy Institute, of all people. Mr. Serious Concerns must have been out of the office for the holiday.
Two D.C. council committees advanced a revised D.C. United stadium bill yesterday as expected, swapping in taking the stadium land by eminent domain in place of trading a city government building for it, also as expected. And no, the council, including councilmember and mayor-elect Muriel Bowser, still has no idea where it will get the money to buy the land:
The bill does not include a source of funding to replace the $37 million and land the city would have received through the Reeves swap. But Bowser said she was committed to finding money for the project through a combination of existing funds and new borrowing.
That’s not the only change to the plan being pursued, though, as it turns out: Council chair Phil Mendelson and government operations committee chair Kenyan McDuffie, according to the Washington Post, “have begun questioning whether the city ought to be providing $8.4 million in sales tax abatements to the team as part of a package of nearly $50 million in tax breaks.” Now there’s a question worth asking! Actually, it’s worth asking about the whole $50 million, but $8.4 million is a start, kinda?