January 17, 2011
D.C. United exploring D.C. stadium sites
D.C. United is apparently preparing to play Baltimore and Washington against each other in its bid for a new stadium: After talking up Baltimore last summer, team president Kevin Payne now says he's discussed four sites in D.C. with city officials.
One leading candidate, according to the Washington Post, is Buzzard Point in Southwest Washington:
[City council member Tommy] Wells said last week that he isn't sure how a stadium would be financed, particularly with the city facing an expected $400 million-plus budget shortfall next year, but that a stadium on Buzzards Point would enliven the neighborhood. The Akridge property is between First and Second and R and V streets SW, a neighborhood that has seen little new development. "It's an area that really could be a great place for soccer, but also a great place to have more commerce and retail on the west side of South Capitol," Wells said.
If Buzzard Point is familiar to you, that may be because it's part of the same area that was supposed to be revitalized by the Washington Nationals stadium when that was opened in 2008. But surely the second time will be the charm.
December 23, 2010
Baltimore soccer stadium study: Do the numbers add up?
A city-commissioned study on the economic impact of building a soccer stadium in Baltimore — presumably for D.C. United — was released yesterday (download it here), and included the following estimated benefits: 780 to 940 jobs created per year, state tax revenues of $3 million to $3.5 million a year, and city tax revenues of $2.3 million to $2.8 million a year. Added Patrick Turner, the developer who wanted to build the thing as part of his Westport megaproject: "It would be great for us and great for the city of Baltimore."
So, would it? Are those numbers realistic, and if so are they a good return on public investment? Let's crunch:
- Following a mind-numbing recitation of the history of MLS attendance and various Baltimore demographics (including, for some reason, a chart of student enrollment at every one of Baltimore's colleges), the study finally gets down to how many events it expects would be attracted to a new stadium: 17 MLS home games, 9 women's pro soccer games, 7 "national/international soccer" games, 4 college soccer games, 6 other sporting events (such as lacrosse), one concert, and 5 "other community events" each year. This seems a bit ambitious — are that many international soccer teams really going to want to play in Baltimore? — but not outrageously so.
- Total attendance at these events is projected at 584,750-695,100, with total direct spending of $40,379,000-$48,155,000. That's almost $70 a person, which is a lot to drop on a soccer game, even counting food, parking, and hotels (assuming anyone is traveling from out of town and staying overnight to see D.C. United). Factor in that this average needs to factor in lacrosse games as well, and you're starting to enter wishful-thinking territory.
- The report says it accounts for both displacement of existing spending and leakage of spending out of the local economy, but doesn't say squat about how these adjustments were calculated, beyond that it's part of the IMPLAN computer model used. That's not exactly reassuring, given that displacement and leakage are extremely locale- and project-specific (you need to know what out-of-town options there are for people to be otherwise spending their money at), and not easily captured in a generic computer model.
- Nobody's saying how much Turner wants in public cash for his plan — he says his goal is to privately finance the stadium, but given that this is a $1.4 billion project overall, there's plenty of other stuff he could be asking for money for. If you buy the estimated increased tax revenues of around $6 million a year, that would probably justify $80-90 million in taxpayer spending — but, of course, if any of the economic impact numbers are off, that would drop proportionately.
- Those 780 to 940 new jobs would justify a much lower public expenditure — more like $40-50 million if you want to stay below the $50,000/job figure above which projects are just embarrassingly wasteful. Though given that, according to the report, that job figure was just cranked out by IMPLAN by applying a multiplier to the economic benefits produced, it's probably not worth taking seriously anyway.
So, the overall takeaway: There's a price point at which helping to subsidizing a new soccer stadium in Baltimore makes sense, and it could be as much as $80 million, but probably a good bit less than that. Also, the clear plastic binder trick for getting your report taken seriously still works.
July 30, 2010
D.C. United starts beating Baltimore drum
There's been much chatter this week about a possible D.C. United move to Baltimore, with team president Kevin Payne telling the Washington Post it's "potentially a fairly clean deal because there is a developer, there is available land and there's the Maryland Stadium Authority."
It's also pretty premature, as the stadium authority's economic feasibility study isn't even due out until September. And at last word, the mayor of Baltimore still had no idea how a soccer-only stadium would be paid for. So think of the United-to-Baltimore rumors as more of a preview for the coming fall entertainment season.
May 12, 2010
Proposed D.C. ticket tax would fall mostly on team owners
A committee of the Washington, D.C., council is pushing a plan to add a ticket tax to sporting events in the District to fund parks and recreation programs: Tickets over $25 would get a $1 surcharge, those from $10 to $25 would get a 50 cent surcharge, and those under $10 would be spared. Also, the Washington Nationals would be exempt, as their lease with the city prohibits any additional ticket taxes — yet another argument in favor of the Nats' lease being among the sweetest of sweetheart deals.
The Washington Post, perhaps predictably, says the new tax "would come out of fans' pockets," but that's not entirely true: Most of the cost of ticket taxes end up getting folded into the face value of tickets, meaning local sports team owners would have to take a lower cut in order to keep from pricing themselves out of the market. (Team owners already price tickets as high as the market will bear, unless they're really, really dumb.) And the higher surcharge on high-priced tickets might actually help keep some ticket prices down, as teams would have an incentive to keep tickets priced right at $25 or $10 without going over, to avoid triggering the higher levies.
The tax is expected to be voted on by the full council on May 26. Expect to hear plenty of howling from D.C. United and the Washington Wizards between now and then.
March 24, 2010
Garber on D.C. United: Don't make me come in there!
MLS commissioner Don Garber is getting the hang of this threatening cities for stadiums thing. Asked about the D.C. United situation by reporters on a conference call yesterday, Garber replied:
"I am tired of going down [to Washington] for meetings and getting back-slapped and [attending] faux press conferences with mayors and local city officials to have them back-track because they can't get out of their own way. Quite frankly, it is frustrating, and at some point, we are going to have to do something about it."
And:
"I just can't understand why we can't make progress in D.C., and what more do we need to do to have the politicians in that community understand the relevance of that club, its deep commitment to the community. ... It's premature to say we would move it, [but] if they don't get a stadium ... that team will not be able to succeed and we would have to address what that means."
Now those are the kind of vague, unspecified move threats that get elected officials scurrying, without actually allowing anyone to evaluate whether the threat is real (since you haven't actually threatened anything specific). Good job, commissioner! A few more years of this, and maybe you'll get your own hagiography.
January 20, 2010
Maryland approves Baltimore soccer stadium study
Baltimore Mayor Sheila Dixon's idea of building a soccer stadium in South Baltimore took another baby step forward yesterday, as the Maryland Stadium Authority approved spending $100,000 to study the possibility of a new stadium for either D.C. United or the minor-league Crystal Palace Baltimore. Or rather, to "explore the benefits" of building a 17,000- to 20,000-seat stadium, for which you'd presumably need to know stuff like how much it would cost and who would pay for it — but given typical economic impact studies, maybe not.
October 07, 2009
Baltimore mayor seeks pitch to D.C. United
If you've been feeling bad for D.C. United that they're all dressed up to move with no place to go after their D.C. and Prince George's County stadium plans collapsed, then raise a glass to Baltimore Mayor Sheila Dixon, who's asked the Maryland Stadium Authority to consider building a soccer stadium near Camden Yards. A spokesperson for Dixon told the Baltimore Sun that it is, in the Sun's words, "uncertain how the stadium might be financed."
Dixon's preferred site, apparently, would be this place, which has been in the works for years but has been slow to find developers who actually want to build condos there. Where's Stringer Bell when you need him?
April 10, 2009
Garber threatens D.C. United move
MLS commissioner Don Garber upped the ante on the "look at other jurisdictions" talk for D.C. United yesterday, indicating that the team could move out of the D.C. area entirely unless it gets a new stadium deal. Garber told Washington Post soccer writer Steven Goff:
"Why we don't seem to be able to get a deal done is incredibly frustrating and it could be that, if something can't be resolved, we will move the team. ... We are getting close to the point where we can't continue to go on operating the team at RFK, a facility that didn't work for Major League Baseball, does not work for D.C. United. We have to develop a plan to get United in a partnership with a public entity in the region sometime soon or we will have to very seriously think about alternative locations."
This is, of course, one of the roles of sports league commissioners: levying move threats so that team owners don't have to. (D.C. United execs, you'll note, pointedly wouldn't comment on Garber's remarks.) So is it serious, or is it Bettmanesque? D.C. United would certainly lose a lot by relocating: Even in a "substandard" stadium (Garber's term), they ranked third in the league in attendance last year, and are the league's sixth-most-valuable franchise, according to Forbes estimates. That'd be tough to match in another market, especially as MLS has aggressively placed expansion teams in most other soccer hotbeds the last few years.
For now, then, probably best to consider this an intended bulletin-board quote for the locker room of the Fairfax County Board of Supervisors. Jerry Reinsdorf would no doubt approve.
April 08, 2009
P.G. County kills United talks
That didn't last long: Less than two months after D.C. United announced plans to build a 24,000-seat, $190 million soccer stadium in suburban Prince George's County, Maryland, the county council shot down that idea, voting unanimously to oppose a state feasibility study of the stadium plan. The team's demand for county money looks to have been the sticking point: "We're not interested under the terms that they came to us with," said councilmember Eric Olson. "If they were to pay all of it or a substantial amount, we could have another discussion, but it was clear that this was not what we could find acceptable."
A D.C. United spokesperson responded to the news by saying, "We will continue conversations with other jurisdictions regarding a future home for D.C. United." Where that might be is anyone's guess; the Washington Business Journal speculates that Fairfax and Loudoun Counties in Virginia might be interested, or possibly Montgomery County, where the Washington Freedom of Women's Professional Soccer play, if the league hasn't folded yet.
April 01, 2009
D.C. United stadium hitting snags left and right
Plans for a Prince George's County stadium for D.C. United aren't exactly moving ahead smoothly. The bill to study possible stadium sites is back in committee again, after the original version was determined to be not exactly constitutional. Meanwhile, Prince George's County Council chair Marilynn Bland is under fire for refusing to let opponents of the stadium plan speak at a public hearing, calling a recess after ten minutes when she realized she didn't have the votes to approve a stadium measure, and then shutting off cameras and microphones to ensure that those who'd signed up to testify wouldn't be able to.
March 26, 2009
Not everyone united on DC stadium plan
The Washington Post reports that the Prince George's County Council's General Assembly Committee voted 5-0, with two abstentions, against the next step in the stadium process. Specifically, the committee voted to recommend opposing state legislation allowing the Maryland Stadium Authority to begin design, site study, and financing work on the proposed new stadium for DC United. This vote is non-binding, and such votes represent "the sense of the Council at that time" according to Council Chairman Marilynn M. Bland.
While other Council members were silent on the reasons for the vote, Eric Olsen took issue with an obscure throw-in part of the plan allowing for new headquarters for the Maryland-National Capital Park and Planning Commission, bypassing the council. According to Olsen, "That is a fatal flaw."
DC United spokesman Doug Hicks appeared bemused. "It's difficult to react to today's vote, as we've not yet spoken to the legislators and don't know what, exactly, they are opposed to."
March 18, 2009
Maryland: We don't know nuthin' 'bout funding no stadiums
Apparently even vague financing plans for a D.C. United stadium were too much for the Maryland legislature, which stripped language from the stadium bill that would have specified the use of state bonds to finance the project. Instead, the new language will just punt the issue to negotiations between the Maryland Stadium Authority, the county, and the team. Many, many hearings can be expected before that comes to pass; bill sponsor Del. Melony Griffith declared, "Shovels are not going into the ground if this bill passes."
Meanwhile, Prince George's County Executive Jack Johnson has asked the Metro transit agency to sell it land near the Morgan Boulevard Blue Line station that is one possible stadium site. No word on whether Metro would get full market value for the land, or whether United would reimburse the county for land expenses.
March 11, 2009
D.C. United: Actually, how about some county money, too?
Just four weeks after announcing a plan for Maryland state taxes to pay for three-quarters of the $180 million cost of a new soccer stadium in Prince George's County, D.C. United officials switched gears yesterday, saying that the county itself should kick in $47 million towards the project. Needless to say, state officials like this idea: Maryland Stadium Authority executive Gary McGuigan told the county council yesterday that as "this was a county initiative," the county should help pay for it.
County officials, just as needless to say, weren't thrilled, asking who'd cover the gap if ticket sales and property values were to fall short of what's needed to pay off the stadium tab. The Maryland state house of delegates, which has been similarly skeptical of the plan, meets next Tuesday to discuss the details.
February 19, 2009
P.G. official: Soccer stadium won't bring revenue, build it anyway
D.C. United's plan for a $180 million-or-so stadium in Prince George's County, Maryland, is panned today by Washington Post columnist Marc Fisher, who calls it "a sweet deal for United, a feel-good boost for the beleaguered county and a financial loser for Maryland taxpayers."
Fisher's source? That'd be none other than Prince George's County Executive Jack Johnson, who defended the deal by saying, "I don't think it's going to create a lot of revenue." The reason taxpayers should put up three-quarters of the cost of a soccer stadium, he told radio station WAMU, is "public interest" and "public benefit."
Fisher then notes that a feasibility study conducted by the Maryland Stadium Authority is hardly clear about the public's interest or benefit:
- Most current United fans (57% of whom live in Virginia) say they would go to fewer games at a Maryland stadium.
- "New soccer stadiums in the Denver and Toronto areas were sold as possible concert venues, but each attracted only one show in its first year."
- Because MLS teams play only 16 home games in a season, "even if international soccer matches, a women's soccer team and a pro lacrosse team also used the stadium, it would be dark about 300 days a year."
(By the way, in case you're wondering whether Fisher is just expressing sour grapes because he writes for a D.C. paper, he made many of the same points in arguing against a publicly funded soccer stadium in D.C. last year.)
Since D.C. United has to know these same figures - especially the one about their current fans not wanting to make the trek to Maryland - this has to increase the odds that the Prince George's plan is mostly a stalking horse to kick-start plans for a soccer stadium in D.C. If so, it's not working: Washington Mayor Adrian Fenty issued a statement on Tuesday declaring, "While the District will greatly miss being home to the team, the administration congratulates both D.C. United and Prince George’s County on their successful negotiations." Fenty diplomatically failed to add: "Suckers!"
February 16, 2009
P.G. United? Soccer stadium plan announced for Maryland
So D.C. United held its press conference today, and now we have some specifics of the MLS team's plans for a stadium in suburban Prince George's County, Maryland. To wit:
- Where would it be built? The Washington Business Journal says the 24,000-seat stadium would be built "not far from FedEx field" and that team owner Victor MacFarlane said "the exact site will be chosen in the next 30 days." The Washington Post's David Nakamura says MacFarlane is "looking at three sites close to metro stations -- two at the Morgan Blvd. Metro Station and one at the Largo Town Center Metro Station."
- Who would pay for it? The Maryland Stadium Authority would sell bonds, 75% of which would be repaid by "admission, sales and income tax revenue created by the project" (per the Washington Business Journal), with the other 25% coming from the team. That indicates tax-increment financing (TIF) and its sibling finance mechanism, sales-tax-increment-financing (STIF), which allow developers to get their property and sales taxes to get kicked back to pay for construction costs. It's a hugely controversial finance scheme, especially during an economic downturn; as corporate subsidy expert Greg LeRoy told me way back in 2000: "Right now we're in the middle of this giant real estate boom, but real estate markets are cyclical. During the crash in real estate values in the early '90s, some places got caught in the downdraft, and the increment evaporated. And you've got a situation where a liability that was supposed to be taken care of by the TIF is now eating the lunch of the general fund." Gulp.
- How likely is this stadium to happen? Today's press conference was to announce the introduction of legislation by state delegate Melony Griffith - but, according to Nakamura, the bill, if approved by the legislature, would only "allow the team to enter into formal talks with the Maryland Stadium Authority toward building a stadium." He predicts any stadium to be "4-5 years away minimum."
In other words, this is still the very beginning of the process, not the end. MacFarlane may have declared yesterday, "We are coming to Prince George's County," but whether it's forever or just to take a look around remains to be seen.
February 15, 2009
Maryland stadium plan lacks specifics
Tim Lemke of the Washington Times has summarized the state of DC United's proposed new soccer stadium in Prince George's County, Maryland. To summarize the summary: There is no site yet, no clear budget, no financing plan, and no detail whatsoever in an enabling bill introduced in Maryland's General Assembly. There is, however, a press conference tomorrow.