More fallout in the maybe-$1.5-billion Virginia subsidy deal for a new Washington Capitals and Wizards arena in Alexandria, as everyone from state legislators to economists weigh in:
- Virginia state Sen. Adam Ebbin, who represents Alexandria, says the project is not a done deal in the state legislature, where “I don’t think there is universal support.” In particular, he’s worried that the new Potomac Yard Metro station doesn’t have the capacity to handle the crowds for a 20,000-seat arena, saying more state spending on transit will be needed as “a prerequisite for any consideration of a deal.”
- Metro CEO Randy Clarke has expressed similar concerns, saying last week, “Clearly [the station] would need some kind of modification to handle a demand of that nature.”
This is all happening against the backdrop of a nightmarish $750 million Metro budget gap, so it’s entirely possible that both Ebbin and Clarke are using the arena project to try to shake loose some more Virginia state money for the interstate Metro system. Still, we’ve seen similar issues with Metro station capacity before — who can forget the time that a D.C. official suggested that if fans were forced to walk to the next station to get home from Nationals games it would be good for local stores — so it’s entirely possible that the Alexandria arena would come with additional unreported transit costs.
Meanwhile, Smith College economist-for-hire Andrew Zimbalist has weighed in with a — column? op-ed? blog? more on that in minute — on the proposed Virginia deal, and he’s agin’ it:
The city and the state say not to worry. They’ve got the taxpayers covered. The debt service on the bonds will be defrayed from extra tax revenue from within a newly created special tax district and from lease payments by Leonsis. The problem with special tax districts is twofold. First, some of the projected businesses might not show up. Second, some of the businesses that do show up might be coming from other parts of the city or the state. In this case, the extra tax money from the district will be offset by less tax money from elsewhere in the jurisdiction.
This is all true, and all things Zimbalist has pointed out many times before, though at other times he’s said they don’t matter. The weird part is where Zimbalist’s essay appeared: not on a newspaper op-ed page, as you might expect, but on the website of the American Institute for Economic Research, best known for organizing the Great Barrington Declaration asserting that COVID should be responded to not with lockdowns but with “simple hygiene measures, such as hand washing and staying home when sick,” which even other libertarian economists decried as inane. And if you, or Zimbalist, thought that this would escape Twitter attention, you don’t know J.C. Bradbury:
WTF? Andy Zimbalist just published an article arguing against the Virginia arena development for AIER? I have so many questions.
|The Washington Wizards and Washington Capitals Have a Plan: It Shouldn’t Surprise You https://t.co/1ZMdWiBuYv
— J.C. Bradbury (@jc_bradbury) December 19, 2023
Let’s not focus on the negatives, though — instead, let’s celebrate that the prospect of Virginia plunking down $1.5 billion or more on a sports arena has united two mortal enemies. Not that the Virginia General Assembly probably reads either fringe economics websites or the flaming wreckage of Twitter, but it’s always nice to see dogs and cats living together.
UPDATE:
Anyone who thinks I am going to approve an arena in Northern Virginia using state tax dollars before we deliver on toll relief and for public schools in Hampton Roads must think I have dumbass written on my forehead.
— L. Louise Lucas (@SenLouiseLucas) December 20, 2023
Regarding the whole “if they spend money here they won’t spend money there” theory against special tax districts: WHO CARES! Really! Why should I care if someone buys a beer/meal in (say) downtown $an Jose instead of Oakland or San Francisco?! I’m sure someone in those city’s would say vice versa. This is America after all.
Because it means that the stadium is not creating new economic activity and therefore isn’t going to magically pay for itself as the owners and lobbyists claim.
It matters, or at least should matter, to those San Franciscans if someone is spending money in San Jose instead, because there’s only so much money and only so many people to spend it. Bay Area people spending money in San Jose are people who are no longer going to San Francisco and no longer spending money there.
Even within the same county/city, redirecting economic activity into a special tax district that consists solely of a stadium and other properties controlled by the team is essentially taking money away from everything outside of the district and giving it to the team owner. There’s no new economic activity, it’s just been taken from local business around town where normal taxes are paid, and reconcentrated in one neighborhood and one property owner under a favorable tax regime.
Do team owners really care about public transit access? With stadium area parking going for $20 to $60, I’m guessing they’re just pretending to care about it. When Chicago Fire MLS played in their Bridgeview stadium the only way to avoid their $24 lot was to take the CTA to the end of the line at Midway airport, and then catch a special bus to cover the final 4 miles.
A stadium/arena surrounded by giant parking lots means money can’t be made on non-game days. Many team owners will try to make money with retail/apartments/offices year-round, which would necessitate good transit access and will also prevent the area form having the reputation as a barren wasteland. As an example, how do people perceive Wrigley Field compared to Guaranteed Rate Field? Even if the White Sox are good and the Cubs are bad, the Cubs usually outdraw the Sox based on the enjoyment of going to the game, and now the Ricketts family will make money all year after buying most of the land surrounding Wrigley.
Yeah, and that whole thing was generally a failure and the team moved back to Soldier Field.
If getting to games is expensive and/or a hassle, fewer people will want to come at all and the people who still want to come sometimes will come to fewer games.
These days they do care, at least a little. They can make a lot more off developing that land than they can from selling parking.
Still haven’t fixed the headline Neil? Shouldn’t it be Caps/Wizards?
Is this a test?
Er, yes, a test! That’s what it was! And you passed!
Also, respect for not going with a “Yes Virginia…” approach.
COTD!
Yea!
Sorry to be “that guy” but my brain was melting trying to imagine that arena LOL…..
Thanks for pointing it out! I’m amazed and slightly alarmed that it took almost 12 hours for anyone to notice…
Your site might be the only one where I read the story and not the headline.
I do appreciate that the URL still says “nats” in perpetuity
As Neil Young said about the “underneath the stairs/giving back some glares” verse in Sugar Mountain, it’s left there as a reminder of what can happen.
Maybe it’s just that no-one who reads this site or watches the stadium extortion game would have been surprised of the owners of the Nationals were somehow extracting millions out of a subsidy for sports facilities other than their own… in many ways it would surprise me more if they weren’t somehow wetting their beaks on this Leonsis (pardon me “monumental”) scam…
Would a headline like “Senator warns if Caps/Wizards deal not approved DC United, NFL team and Nat will all move to Greensboro” really be all that surprising?
Well, I noticrd right away but with all the usual suspects posting here regularly I figured someone would step up.
Then I realized (sigh) fate had called my name…..
“noticed.”
Argh!
PS: Thank you Sen. Lucas. You wouldn’t, by chance, be interested in the Presidency would you?