Defector ran a long piece yesterday on why the Washington Commanders stadium deal sucks, and no, I’m not only posting about it because they called me “the great Neil deMause,” a title by which I expect you all to refer to me from now on. Chris Thompson’s article is an excellent summary of the record-shattering tax breaks and land subsidies the D.C. council handed out to Commanders owner Josh Harris for a new NFL venue on the RFK Stadium site, without even seeking alternate bids to help establish what would be a reasonable price. Here’s Thompson packing all the worst of it into one sentence:
The deal exempts the Commanders from property taxes on the stadium and the surrounding development; it exempts the Commanders from sales taxes on personal seat licenses; it gives the Commanders the exclusive right to develop housing and retail around the stadium, at the low price of $1 per year; and it gives the Commanders rent-free use of 24 acres of city-controlled land for a period of 26 years.
All this on top of the $1 billion in city spending on the stadium itself — though some late rejiggering of stadium revenues could reduce that to more like $650 million. The total public cost, as discussed here at length previously, will still likely be between $7 billion and $25 billion, setting a new standard for sports subsidies that will undoubtedly be used as a benchmark by other team owners, meaning it’ll cost lots of other cities more billions of dollars in the future. And this after, as Thompson notes, the D.C. Chief Financial Officer’s office issued a report finding that Harris doesn’t need the subsidies in order to make money on the Commanders, and that the district would get way more in tax revenues if it redeveloped the RFK site without building a stadium.
The whole thing went down this way, the story makes clear, because Harris’s management team lobbied the hell out of the D.C. council, including killing any proposed amendments that might have softened the blow even slightly. (One councilmember, Matthew Frumin, declared he would vote no unless Harris were required to pay penalties if he failed to fully develop the land, then when it didn’t happen voted yes anyway because “this is a time to come together.”) The final needed votes were obtained by getting the support of organized labor, which was strong-armed into supporting the deal by the threat of losing construction jobs:
“They had heard from the team that if the amendments passed that the team would pull out,” [councilmember Brianne] Nadeau explained to Defector. “In which case, all of those union jobs would go away. So I think they felt pressed to send a letter, saying, ‘Please don’t support any amendments, we don’t want the bill to go away.'”
Of course, the unions would still have gotten construction jobs if someone else had developed the RFK land, but there wasn’t anybody else offering to develop the RFK land, because D.C. Mayor Muriel Bowser specifically decided not to ask any developers if they were interested before offering the land to Harris, and the D.C. council didn’t push her to. The whole mess is a perfect example of what happens when you have political leadership prioritizing making local billionaires happy over figuring out what’s best for your city, and political opposition largely just wanting to show that they got concessions for various constituencies (union jobs, local hiring) even if those come to pennies on the dollar of what D.C. is giving up.
It’s all a terrible system, and not likely to end unless either someone finds a way to limit the lobbying power of wealthy corporate owners (not likely, the way the Supreme Court is going) or the federal government steps in. As one Defector commenter suggests: “One thing we could maybe do at the federal level is treat all local and state tax breaks for specific businesses and projects as taxable income, and maybe even tax them at 100% of value.” Great idea, and one that was tried almost 30 years ago, and it never even made it out of Congressional committee. “We can’t reform government without action by the government that won’t take it because it’s in need of reform” is probably the preeminent Catch-22 of our times, and if anyone has any ideas for a workaround, democracy is all ears.
All Hail The Great Neil deMause!
Hear hear!
The great one!
Concerning the 100% tax on subsidies: are the subsidies that are handed out now taxed at whatever rate the team/owner is paying? It seems to me (and I am certainly no tax lawyer) that the IRS considers all income taxable unless specifically excluded or exempted by statute.
No, because in-kind donations like buying a team part of a stadium or parking garages or whatever doesn’t count as income.
Since the team is presently in Maryland, shouldn’t this count as an “illegal” subsidy to lure a business from out of state (ok, district…)?
There are many, many ways congress could act to prevent this type of thing from happening without changing a single law.
The do not wish to do so and likely never will.
Wasn’t it in “The Distinguished Gentleman” that someone told the lead character (Eddie Murphy) that he had to raise $10,000 a week starting in week one to have any chance of being re-elected to congress?
And that movie was released in 1992, as I recall. No doubt it’s five or ten times that now.
Citizens united removed all premise of one person one vote. But that notion was very sick before it was killed.
The scumbags vacuuming up tax dollars today may have perfected their methods (and become utterly shameless… this deal, like most of the others, benefits no-one but billionaires… the construction workers would be working elsewhere if it weren’t for the stadium), but they did not invent them.
Instead of longing for the ‘good old days’ (which, as Jello Biafra pointed out, is just Nostalgia for an Age that Never Was…), perhaps we should just admit that the system has always been corrupt and has always benefitted a minute percentage of the population at considerable cost to everyone else.
When the constitution referenced “all men”, they weren’t talking about everybody. They were talking about white male landowners… and that was NOT the majority of the population of the US at the time.
When the Magna Carta was signed by King John (at the point of a sword…), it wasn’t meant to give rights to common folk. It was meant to protect Barons who had received grants of land and minerals from the king from having the king change his mind… which kings frequently had done, resulting in said barons spending their final days in a castle keep. The serfs and peasants did not benefit from the signing at all.
Most of what we were taught is a sanitized version of what actually happened designed to make “our system” seem right and just.
It has seldom ever been.