Alexandria mayor claims Caps/Wizards arena plan ‘minimizes the risk’ for taxpayers despite all evidence to the contrary

If there’s one kind of article that I wish could be banned from all news outlets, it’s the single-source stenography piece. This happens when someone Important, usually an elected official but sometimes just a rich guy, opens their mouth and says things, and a reporter transcribes it all and puts it into print without asking questions like “Is this true?” and “Am I just being used as a propaganda tool?”

We had a couple of those yesterday, and they contain all the bad hallmarks of the genre. Washington, D.C.’s WTOP ran one titled “Alexandria mayor says funding plan for Wizards, Capitals arena at Potomac Yard ‘minimizes the risk’ for taxpayers,” which is an accurate headline in that, yes, Alexandria Mayor Justin Wilson did indeed say that. How does it do that, according to the mayor?

Wilson told WTOP that Monumental Sports and Entertainment, which owns the sports franchises, will pay a “significant private investment upfront, and ongoing rent that is paid for by the private sports teams, by Monumental.”

The rest of the project’s cost will be covered by tax revenue generated by the complex itself…

“It’s a model that minimizes the risk on the taxpayers, both the state and the city, and helps drive economic growth in Potomac Yard, which is ultimately what we’re trying to do,” Wilson said.

That’s just tax-increment financing, and it doesn’t minimize risk at all. The tax revenue generated at the Capitals and Wizards arena complex would be going toward paying off $1.05 billion worth of bonds, and Virginia taxpayers would be on the hook for that money (plus about $300 million in other expenses) regardless of how much tax revenue came in. As Good Jobs First relates in its TIF explainer, such “underwater” TIFs are distressingly common:

Sometimes, TIF projects fail to maintain enough incremental tax revenue to pay the debt service. This can happen because a recession arrives, causing the property’s value to decline (and enabling the developer to appeal for a lower tax assessment).

It can also happen because a project was inherently flawed. A feasibility study may have overestimated market trends or future rent rates. A corporation may have overstated its likely future growth. Or a retailer may downsize or go bankrupt due to new competition from e-commerce.

When a debt-service TIF goes underwater, if the bond is not a general obligation, the city is not legally obligated to cover the shortfall. But in reality, cities rarely allow TIF bonds to default. So a TIF can become a drain on a city’s general fund.  At one point in the Great Recession, Kansas City had six underwater TIF districts.

And even when the TIF money is enough to pay off the bonds, Good Jobs points out that’s still money being siphoned off from other needs, even as the new development creates new costs for taxpayers:

The treasurer of Adams County, Colorado, once denounced a $26.9 million TIF for a big box retail project, “without a penny [of it] accruing to the county.” He pointed out that if a murder occurs at the mall, the county coroner, county district attorney, county sheriff, county jail, and county court would all incur expenses, none of them supported by the TIF district.

A more accurate article would have pointed out some of this, or maybe even called someone at Good Jobs First for comment, since they’re right there in D.C. And a more accurate headline would have been “Alexandria mayor claims Caps/Wizards arena plan ‘minimizes the risk’ for taxpayers despite all evidence to the contrary,” actually, that’s good, I’m using that.

Bad article #2 is from Kansas City’s NPR station KCUR, and is headlined “Kansas City mayor says answers about new Royals stadium should come soon.” Does he now? What did he actually say?

[Kansas City Mayor Quinton] Lucas told KCUR’s Up To Date that he expects “final deals and arrangements” in the days ahead in order to meet that end-of-month deadline.

“There is active work in a number of different jurisdictions engaged —including the city of Kansas City — because any big investment in a part of our city will require zoning conversations as well as probably incentive discussions,” Lucas said. “That is something that I think gets decided soon. Then, I think we can put this issue to bed.”

There is a smidge of actual reporting in this one, in that the Jackson County Legislature needs to act by January 23 if it wants to put an extension of the county’s 0.375% sales tax surcharge to raise money for Royals and Chiefs stadium projects on the April ballot. But otherwise, this is just “mayor promises stuff will get done soon,” which is some extremely weak sauce as an excuse for running an article — especially when there are tons of important questions reporters could be researching, like whether Royals owner John Sherman would really move the team to a neighboring county without that tax subsidy, and whether that would actually be worse for Jackson County than hiking sales taxes and handing the proceeds to Sherman.

In short, it was a bad day for journalism, but then that’s most days these days. And when people are reading these articles, or at least glancing at the headlines, they’re getting the wrong idea about stadium and arena deals that they or their elected officials may have to be voting on. Everyone may make fun of the Washington Post’s “Democracy Dies in Darkness” slogan, but there’s a nugget of truth beneath the pomposity: Without good information, people can’t make good democratic decisions, and right now there’s alarmingly little work being done at too many media outlets to distinguish information from misinformation before throwing it all on the page and letting God sort it out.