DC officials battle over giving United owners $300m to upgrade 8-year-old stadium

Washington, D.C. council chair Phil Mendelson’s proposal to give D.C. United‘s owners $300 million for upgrades to their eight-year-old stadium is facing opposition from Mayor Muriel Bowser, who has argued that she already gave a pile of public money to one 20,000-seat venue in the district — the Wizards and Capitals arena, which is in the midst of getting a $515 million facelift courtesy of D.C. taxpayers — and doing so for the United stadium would be “cannibalizing one for the other.” And this weekend the Washington Post editorial board chimed in with an opinion piece under the 10/10, no notes headline “Yet another subsidy for a D.C. stadium? Really?”

History shows that promises of new revenue from sports venues almost never pan out. The same is true of arguments that such public investments can help boost the local economy. And it’s especially true of more subsidies for Audi Field — since it already exists.

(Somebody’s already making use of J.C. Bradbury’s new stadium economics FAQ, excellent!)

There are ironies up the wazoo here, starting with Bowser finally finding a sports subsidy deal she doesn’t like after writing enormous checks to not just the Caps and Wizards but to Washington Commanders owner Josh Harris; and Mendelson, who was against the $7 billion Commanders deal before he was for it, now taking the lead on fighting for money for United owner Jason Levien. (Both Mendelson and Bowser were on the council when the initial United stadium funding was approved, and worked together to craft the final deal.) Then there’s the fact that the renovations to an eight-year-old stadium will somehow cost $620 million — Levien would cover the rest — when the initial construction cost in 2018 was only $400 million, just under half of it funded by the district. Levien says the stadium needs 8,000 more seats and a roof to be “more impactful,” and the rebuild is not just because MLS is about to shift to a winter schedule that will mean more cold-weather games in D.C.

If Mendelson has a case here, it may be that the funding scheme for the United renovations looks less bad than the previous D.C. stadium deals: The city’s share would be partly funded by a 4.25% ticket tax surcharge, which as previously discussed here mostly ends up coming out of sports team owners’ pockets. (The rest would be funded by a 4.25% sales tax surcharge at the stadium, which would less fall on the United owners; it’s a marginal cost thing.) There would also be a new city maintenance and repair fund for the stadium, which would be directly funded by team rent and naming rights and sponsorship money. It’s hard to say that putting public money into upgrading a stadium just eight years after it opened, in exchange for no additional years of a lease commitment, is ever a good thing, but this seems to be one of the less bad ways to pay for it, at least.

Or that’s how it looks from Mendelson’s proposed legislation, which runs only seven pages and just authorizes the mayor to negotiate the details. Bowser doesn’t seem interested in negotiating squat, but Mendelson is going ahead with an October 23 hearing regardless; maybe at that point we’ll find out more about the details of this plan, but don’t get your hopes up.