Category: Washington Mystics

Friday roundup: Sports subsidy protests in Virginia and KC, plus 2023’s biggest non-sports subsidies went to an industry that may surprise you (this is how clickbait headlines work now, right?)

access_time personNeil deMause

No news worth reporting yesterday, but I instead spent my morning recording this interview about the Oakland A’s potential move to Las Vegas, which covered a lot of ground in just half an hour. Tune in to hear what Brodie Brazil and I discussed, or just to see what’s on my living room wall behind the other end of the sofa from where I usually sit for Zoom interviews!

And a few other things of note happened this week, let’s get to them:

  • The newly formed Coalition to Stop the Arena at Potomac Yard rallied yesterday at the site of the proposed $2 billion Washington Capitals and Wizards arena, with former Alexandria vice-mayor Andrew Macdonald saying, “We don’t need an arena to thrive,” and local resident Shannon Curtis saying the project would “create a traffic boondoggle.” In related news, apparently the Potomac Yard Metro station was set for possible closure until this project was proposed because nobody was using it, but now, as discussed before, it would need expansion to handle arena-sized crowds. Hmm, maybe that should be included in the already-$1.5 billion public price tag? Just a crazy notion.
  • People in Southeast D.C., which is home to the new arena where the Washington Mystics play but which may lose the team to the current Capitals and Wizards arena if those teams relocate from D.C. to Virginia, are equally steamed about the whole thing. “I can’t stress enough that we’re not leaving; there’s still a commitment to the neighborhood,” promised Caps/Wizards senior VP John Thompson III, saying the team owners would work with the city to “bring other events” to the neighborhood “to help fill the void” — which sure sounds like leaving, though I guess keeping the arena open and every once in a while holding a concert there or something is technically just “moving out and promising to visit.”
  • As if Kansas City Royals owner John Sherman didn’t have enough prospective stadium sites to play off against each other, now the owners of the old Kansas City Star printing plant site want back in the game. (No details on who would pay for a stadium at that location.) Meanwhile, residents packed the first public meeting by Jackson County yesterday on the Royals’ plans, with KMBC reporting that “many voiced their concern about continuing a tax when they didn’t know where the stadium would be or any specifics about how it would benefit low-wage earners.” The local food and retail workers union also demanded that the project include a community benefits agreement to require that stadium jobs be union, which is already part of the tax extension proposal, and anyway CBAs often don’t work out that well for many reasons. But sure, better-paying jobs are better than worse-paying jobs, can’t get if you don’t ask.
  • The owners of the new Oakland Ballers minor-league baseball team say they signed a deal to rent out the Oakland Coliseum to host one game this summer, but A’s execs blocked them by enforcing their exclusive right to play baseball at the stadium. (Yes, the stadium that A’s owner John Fisher is trying to get out of as fast as possible. Irony is not his strong suit.) A fan group spokesperson said he figures it’s because Fisher was in “a position of embarrassment” because “I think we would have outdrawn them,” which is maybe wishful thinking but also maybe not.
  • Wondering how the biggest sports subsidy deals compare to the biggest non-sports subsidy deals? Check out good Jobs First’s list of the top megadeals of 2023, headed by Ford getting $1.7 billion from Michigan for an electric car battery plant and Volkswagen getting $1.3 billion from South Carolina for its own EV battery plant. Nothing against electric car batteries any more than against sports, but at 6,500 jobs combined, that’s nearly half a million dollars per job, which is a sports-level awful ratio — good job, car companies, even if not good jobs!
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Wizards, Caps, Mystics owner wants $600m in public cash to redo his privately owned arena

access_time personNeil deMause

Washington Wizards, Capitals, and Mystics owner Ted Leonsis is reportedly asking Washington, D.C. for some money to renovate his arena, which opened in 1997, according to a Washington Post story that I almost missed because it dropped on Friday night. How much money, you ask? Well, the Baltimore Orioles and Ravens up the road are each getting $600 million (plus more if the state wants), what do you say we do $600 million?

The funding would make up the bulk of an $800 million renovation plan Monumental has outlined to the city, according to the two people, who spoke on the condition of anonymity to discuss sensitive negotiations. The remaining $200 million would be covered by Monumental, which is owned by founder and chief executive Ted Leonsis.

One of the people outlined the ask: Monumental would receive the $600 million over four years and use it mostly on construction. The major priorities are to transform the seating bowl — fewer nosebleed seats, more seats close to the court and ice — as well as add a food court that would be open during nongame hours and a new, glassy entrance at Seventh and F streets. Monumental wants to do incremental construction over four consecutive summers, starting in 2024, to avoid disrupting the playing seasons of the Capitals or Wizards, this person said.

The source here is “two people with knowledge of the situation,” which isn’t very specific at all, but the details are detailed enough that it seems like they’re coming from somewhere, anyway.

The teams’ arena is owned by Leonsis’s company Monumental Sports & Entertainment, and there’s nothing requiring D.C. to fund upgrades, but district officials sound pretty copacetic about writing some kind of large check regardless. D.C. Mayor Muriel Bowser, asked about the possible arena renovation subsidy, replied with a joint statement with Monumental saying that “The District recognizes that Capital One Arena serves as an important economic anchor as we continue to reimagine and reinvigorate our Downtown,” so that certainly sounds like the district and Leonsis are working together on something. D.C. Council chair Phil Mendelson said he would need to know the details of any plan before taking a position, but did say he in general “supports giving Monumental public funds because the arena is an economic anchor in a fragile downtown” (the Post’s words, not his).

And before you can get your bearings on this apparent $600 million ask that seems to have its political skids well-greased, the Post drops word down in paragraph six that Nationals owner Mark Lerner wants his own pile of public cash:

The Nationals, in September, sent local leaders a letter asking the city to repurpose parts of the existing “Ballpark Revenue Fund,” which is dedicated to paying off the municipal bonds floated to fund the construction of Nationals Park, into a “Ballpark Modernization & Sustainability Fund.” The proposal would put taxes on tickets, food and merchandise, taxes on parking and the lease payment into a new fund to maintain and modernize the city-owned ballpark, but it wouldn’t create a new tax or pull from other budgets.

That’s super-confusing wording, but it certainly sounds like now that the Nats’ stadium is two-thirds paid off, Lerner wants the taxes on in-stadium spending that are being currently kicked back to pay for about 30% of the cost of the stadium to start being kicked back instead to pay for future renovations of the stadium. How much would that amount to? The in-stadium tax money was initially projected to amount to $11-14 million a year back in 2004; I can’t find any more recent figures, but just assuming a standard rate of inflation that would be $20 million a year today, and more in the future, meaning Lerner’s ask could easily be worth well over $300 million in diverted future taxes that would otherwise go to the district treasury.

With the way stadium subsidy numbers are going, it’s easy to start getting a little jaded — oh, only $300 million, at least that’s not over a billion like some MLB owners I could mention. But between the Wizards, Capitals, Mystics, and Nationals, D.C. could easily be looking at over a billion dollars to zhuzh up sports venues that it expected to be done paying for now — and in the case of the arena didn’t even pay for in the first place — just because “economic anchors.” How big an anchor are they? Oh, hello, Stanford sports economist Roger Noll:

Noll said even when a new stadium is built, a city gets about as many full-time jobs as a Macy’s department store.

Nobody ever talks about spending $600 million to upgrade a Macy’s, but then, Macy’s probably doesn’t have as many lobbyists.

 

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Friday update: Bad D.C. arena math, bad Bucks arena math, bad Columbus ticket tax math

access_time personNeil deMause

It must be September, because my TV is filled with Jim Cantore and Anderson Cooper standing ankle-deep in water. But anyway:

  • Washington, D.C., is about to open its new Mystics home arena and Wizards practice facility, and Mayor Muriel Bowser says it’s a model of how the city would build a new NFL stadium as well. “We know [sports] can help our bottom line by attracting people to our city, but it also has a big impact when we’re winning on our collective psyche,” says Bowser of an arena that got $50 million in public subsidies for two teams that were already playing in D.C. anyway. Maybe she should go back to using her terrible soccer stadium deal as a model instead.
  • People in Calgary are starting to ask whether, if the city is looking to spend $3 billion on hosting the 2026 Olympics, maybe it should build a new Flames arena as part of the deal? Camels, man.
  • Buffalo Bills co-owner Kim Pegula says she’s going to wait until after the gubernatorial elections this November to start negotiating a new stadium with whoever ends up in charge of the state. It won’t be the lox-and-raisin-bagel lady.
  • Speaking of the Pegulas and New York’s current governor, they’re planning an $18 million upgrade of Rochester’s arena that hosts the Rochester Americans minor-league hockey team (which the Pegulas also own), with costs to be split among the owners and city and state taxpayers. Split how? Sorry, no room in the Associated Press article, ask again later!
  • The AP did find time to fact-check Wisconsin Gov. Scott Walker’s claim that the new Milwaukee Bucks arena would return three dollars in new taxes for each one spent, and found that “Walker omits some of the state money spent on the 20-year arena deal and relies on income tax estimates that experts call unreliable.” I could’ve told them that — in fact, I did, three years ago.
  • “‘Ticket tax’ proposal could lead to higher prices on movies, theater, sports in Columbus” reads a headline on WSYX‘s website, something that the station’s reporter asserts in the accompanying video without saying where he got it from. He’s at least partly wrong: Ticket prices are already set as high as the market will bear, so unless the ticket tax changes the market — in other words, unless people in Columbus are forced to spend more on movies and theater and such because the other options (staying at home and watching TV, going out to eat) aren’t good enough, mostly this will just mean prices will stay roughly the same but a bigger share will go to theater/team owner’s tax bills. (I could try to find an economist to estimate exactly how big a share, but isn’t that really WSYX’s job?)
  • Former Oakland A’s exec Andy Dolich says the team owners may be looking at buying both the Howard Terminal site and the Oakland Coliseum site, and using the revenues from one to pay the costs of prepping the other for baseball, which, if the Coliseum site is such a cash cow and Howard Terminal such a money pit, wouldn’t they be better off just buying the Coliseum site and developing that? Or is the idea that Oakland would somehow give up the Coliseum site at a discounted price in order to get a new A’s stadium done? I have a lot of math questions here.
  • With nobody wanting to spend $250 million on a major renovation of Hartford’s arena, the agency that manages the XL Center is now looking for a $100 million state-funded upgrade instead. Still waiting to hear whether this would actually generate $100 million worth of new revenues for the arena; if not, the state would be better off just giving the arena a pile of cash to subsidize its bottom line, no?
  • Cobb County is only letting the Atlanta Braves owners out of part of the $1.5 million they owed on water and sewer costs for their new stadium. Yay?
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Wizards’ $50m practice arena renderings are scenes from a post-apocalpytic nightmare

access_time personNeil deMause

New renderings for the Washington Wizards practice facility (and Mystics home arena) to be built with at least $50 million in city money were released yesterday, and, I’m sorry, what?

new-dcpract-4

The new arena will apparently be surrounded by a massive frozen pond, or maybe a thin coating of a liquid polymer. Fortunately, no one will be around to try to walk on it, since that could get ugly.

new-dcpract-6

Is that a WNBA player? If so, why is she wearing so much makeup? What’s suspending the banner (?) in midair like that? And why on earth is there a film reel countdown projected (?) on a brick wall? What is it counting down to? Will there be any concession stands, or will the whole place just feel like an empty hotel lobby?

new-dcpract-2

The most important part of any new development: lens flare.

new-dcpract-5Put it all together and you have … dear lord. At least the rest of human civilization appears to have been destroyed in whatever cataclysm turned the very ground into a shiny flat surface, so no one will be around to see this. When the aliens land, though, they’re going to be disappointed that there’s nowhere to buy any curly fries.

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D.C. council asks not to pay for Wizards cost overruns, mayor implies that it must hate black people

access_time personNeil deMause

Oh yay, it’s some actual news for once! Washington, D.C. councilmembers have gotten cranky about Mayor Muriel Bowser’s plan to stick taxpayers with not just the $50 million cost of a new Wizards practice facility but all cost overruns as well — which was first revealed back in December, okay, but it takes a while for the D.C. council to work up a good head of cranky — and have introduced a bill to cap the district’s costs at $50 million:

“The District’s tax dollars are finite, and we have an obligation to our residents and businesses to use their funds as responsibly and efficiently as possible,” [at-large councilmember Elissa] Silverman said in a statement from the dais. “If we have to put more money toward a practice arena because of cost overruns, there is less money for new school construction, new ambulances and fire trucks, new and remodeled recreation centers, and other needed civic infrastructure, especially in Ward 8.”

Silverman also noted that the way the mayor has put forward her plan, the council wouldn’t even have to vote on it — unless the council blocks it by this Thursday, the spending deal will be “passively” approved, which is the kind of crazy that sounds about right for D.C. governance. (Several councilmembers have already filed a motion to extend the arena decision until April 7.)

Bowser’s chief of staff John Falcicchio showed that the council has no monopoly on the cranky, telling Washington City Paper: “It’s troubling that certain Councilmembers would move to strip $5 million from a job creating project in Ward 8. This is similar to the Council’s effort last year to defund the RISE Center at St. Elizabeths. Don’t tread on Ward 8.” Why are you picking on poor Ward 8, councilmembers? Do you think Ward 8 doesn’t deserve your blank checks? If you really loved Ward 8, you would buy it a pony.

All this over whether D.C. taxpayers will pay for an entire $50 million NBA practice arena, or will pay for an entire $50 million NBA practice arena plus any additional costs that crop up when the Wizards decide they want gold-plated exercise equipment. Representative democracy sure seemed like a good idea at the time.

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Wizards practice arena plan would put taxpayers on hook for full cost, plus overruns

access_time personNeil deMause

If the idea of Washington, D.C. spending $50 million on a practice facility for the Wizards sounded terrible enough, it just got worse: The city government would be on the hook for all cost overruns as well, with the team’s share limited to $4.5 million in rent payments over 19 years:

Monumental is the only tenant lined up for the facility and is expected to use it about 40 percent of the time, through Wizards practices, Mystics games and games from a NBA D-League franchise that has not yet been created. Events DC, the city’s convention and sports arm, would be responsible for booking events the rest of the time and would pay for any overruns beyond $55 million.

[D.C. council chair Phil] Mendelson said since Monumental’s contribution of $4.5 million equated to the rent the company would pay over the 19-year lease it expects to sign, the mayor had committed to paying for the entire bill even though ticket sales will go to Monumental. “How will we make any money off of this?” Mendelson asked.

The details of the deal for the arena, which would also host Mystics WNBA games and maybe an NBA D-League team, are still not worked out. Mendelson actually supports the plan, despite his qualms, so it looks to have a good chance of passing — if so, I hope they’ll at least chisel his “How will we make any money off of this?” quote into the cornerstone.

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D.C. residents give resounding thumbs-down to mayor’s NFL stadium plans

access_time personNeil deMause

Residents of the area around RFK Stadium really do not like Mayor Muriel Bowser’s idea to use the land for a new NFL stadium:

More than 150 residents of Capitol Hill filled a church gymnasium Wednesday night to propose ideas for re-use of the Robert F. Kennedy stadium property.

Most of the ideas centered around sports: playing fields, a pool, a boathouse, skating rinks, walking trails, even a velodrome.

There was one idea they widely and intensely opposed: building a new stadium for the Redskins. And almost every one of the more than 20 people who stood up to oppose a new NFL stadium did so without saying the team’s name.

Meanwhile, two former National Park Service workers who live near the St. Elizabeth’s Hospital site really do not like Mayor Bowser’s idea to use it for a new Wizards practice facility:

“I don’t think we need it over here,” said Alphonzo Walker, an unemployed 53-year-old who lives in Ward 8.

“I don’t know about this area,” said Eric Clark, also unemployed and in his 50s, though a few years older than Mr. Walker. “What’s going to happen to the homeless who live there?”

Okay, sure, small sample size. Still, the general principle is valid: If you have a plot of available land, and a plan to dedicate a few tens or hundreds of millions of dollars in city money towards it, what’s the best way to generate jobs and other benefits for the surrounding neighborhood, if that’s your goal? Think carefully before you answer.

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D.C. mayor proposes $55m Wizards practice arena, because city was out of other sports to subsidize

access_time personNeil deMause

Washington, D.C. Mayor Muriel Bowser has scheduled a press conference today to announce her proposal for the construction of a brand-new sports facility in the District. Nope, not the NFL stadium she talked about last week. But wait, you ask: Don’t the Nationals and the Capitals and the Wizards and D.C. United all have new buildings either in place or under construction? What on earth is there left to build?

D.C. Mayor Muriel E. Bowser has reached a tentative deal to build a $56.3 million Wizards basketball practice facility and Mystics arena for majority team owner Ted Leonsis on the east campus of the former St. Elizabeths hospital in one of the poorest corners of the nation’s capital.

Yes, you read that right: a $56.3 million practice facility. Plus a home court for the WNBA’s Mystics, because apparently the team is giving up on ever again being able to sell more than 5,000 tickets a game, despite the league average attendance being over 7,000. (Yes, I’m sure lots of those tickets are freebies or heavily discounted, but still.) The money would come overwhelmingly from public pockets: $23 million from the city itself, plus $27 million from the city-funded Events D.C. tourism bureau, with Wizards owner Ted Leonsis chipping in a whole $5 million, plus another $10 million for unspecified “redevelopment and community philanthropic investments.”

Bowser’s administration says this will be a terrific use of public money, notes the Washington City Paper, because:

A press release about the new facility estimates that it will generate $90 million in tax revenues over 20 years, in part by hosting Mystics WNBA games and an estimated 90 non-basketball events a year.

Okay, so let’s get this straight: Having the Mystics sell fewer tickets at a new arena instead of more back at their old arena would generate more in tax revenues because … there’s such a pent-up demand for concert dates that the Verizon Center will be able to fill those former Mystics dates with lots of new revenue-earning events? While also slotting in another 90 new events at the new arena? All of which will be spending by people who never would have been in D.C. otherwise, because after all, it’s not a big tourist town.

Not to mention that at a 5.75% city sales tax rate, to provide $4.5 million a year in new tax revenues, this new practice facility — practice facility, keep reminding yourself that — would need to generate an additional $78 million a year in sales all by its lonesome. That seems pretty unlikely — though if it could be such a cash cow, you have to wonder why Leonsis can’t just build it with his own money instead of making the people of D.C. build it for him and then hope to earn it back through sales taxes. It’s not like he’d need to take out a loan, even.

If there’s any argument for handing $50 million in public money to one of the richest guys in town, I suppose it would be that this is supposed to “revitalize” a rundown section of Southeast D.C., because what business owner can resist the draw of selling their wares to 17 games a year worth of WNBA fans? There is a Metro stop nearby, so it’s always possible you’ll eventually see condos springing up in Anacostia, like you do in pretty much every other D.C. neighborhood with transit. Of course, whether condos — or easy access to WNBA games — is what poor neighborhoods really most need out of $50 million in public spending is another story, but hey, beggars can’t be choosers, right?

This whole mess still needs to go before the D.C. council, where it will no doubt be the subject of months of raucous debate before it gets approved at the last minute by councilmembers scrawling out an agreement in ballpoint pen on the council floor. Democracy!

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