The Virginia Mercury has a long article up about how the Virginia legislature rejected proposals to tie the state’s proposed $1 billion in Washington Commanders stadium funding to a resolution of team owner Daniel Snyder’s sexual harassment investigation. But let’s skip all that and go straight to the bit at the end about how the stadium bill’s sponsors expect to pay off that $1 billion in debt:
Over a 30-year lease, [Senate Majority Leader Dick Saslaw, D-Fairfax] said, the planned development would generate an estimated $153 million per year in tax revenues. Of that, Saslaw said, $60 million would go to the state, $59 million would go to the local government and $34 million would go to the authority to help pay off the bond financing.
Well then, $153 million a year is a lot of tax revenues, even for a project that could run into many billions of dollars to build if there’s additional development surrounding what’s proposed to be a $3 billion stadium. Where would all that tax money come from?
According to the actual bill, pretty much everywhere: The stadium authority would be entitled to “all sales tax revenues,” plus “all [state] personal income tax revenues, corporate income tax revenues, and pass-through entity tax revenues,” plus “any [property] tax increment financing on the campus.” That means that virtually every penny of taxes Daniel Snyder would normally owe on a stadium development would get kicked right back to a fund to help Daniel Snyder pay off his own construction costs.
(Yes, Saslaw claims that only $34 million of that $153 million a year would go toward paying off the bonds, but you’re not going to pay off $1 billion in bonds with $34 million a year in payments, not without a 0% interest rate. So at least some of that state and local money would have to be replacing other funds that would need to be tapped to pay the stadium authority’s bond debt.)
Saslaw promises that taxpayers wouldn’t be on the hook for paying off the $1 billion if tax revenues fell short — “the state is not backing the bonds” — but given the enormous pile of state tax money being committed to bond debt service, it’s almost inconceivable that it would get to the point where there would be a shortfall in payments. (And if it did, you have to wonder if the state of Virginia would really allow its NFL stadium’s bonds to go into default, whether or not bondholders are supposed to have “no recourse whatsoever” to additional state funds.) The proposed Commanders stadium doesn’t even have a site yet, let alone a budget, but already it’s looking at the single largest tax kickback in sports history, which is a pretty impressive feat for a team owned by the most hated man in sports and playing in a stadium that isn’t even 25 years old.
It’s an opening offer to try and beat whatever DC is going to try to give him to move the team back to the RFK site even though the cities lease on the site expires in like 10 years.
Are you sure Snyder has surpassed Bill Wirtz, the Norris family and Loria on the all time shitty owners list???
I mean, he’s up there… but…
I said “most hated,” not “worst.” The poll numbers don’t lie!
As concerning as is Virginia’s “Super-TIF” subsidy for their bid for Commander’s Stadium, the calculations behind the gross tax revenues available for allocation, are often as troubling if not more.
Peel back the onion on Virginia’s computations, which are very, very complex tax and economic projections, about the future, and rest assured those numbers reflect inflated sums, spun like cotton candy, by the stadium’s promoters and their legislative lackeys, without oversight or critical review.
Policy questions about using public funds in this fashion are essential. But even if one supports public funding for stadiums, shouldn’t voters and taxpayers want and expect accurate and independent financial analysis.
The public is mostly fooled on both counts: public finance for private stadiums is bad policy governing the nexus of public dollars flowing to private economic activity, attended by grossly inflated economic and tax calculations.
ITS SOMETHING WE SHOULDN’T DO AND WHAT ABOUT THE FUZZY NUMBERS TOO.
Is the math behind the tax projections publicly available?