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A Bad Deal for Md. Taxpayers

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By Marc Fisher
Thursday, February 19, 2009

In the end, Mayor Adrian Fenty decided it wasn't worth a fight to keep D.C. United in Washington. Fenty, no fan of the deal to build a baseball stadium in the city, was even less enamored of using the District's financing power to put up a soccer stadium, which has far less ability to spark economic development.

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So United has moved on to Plan C (Virginia was the team's second choice, according to executives involved in the search for a site, but governments there have been unwilling to commit public financing to sports projects). The result, an agreement with Prince George's County announced this week, is a sweet deal for United, a feel-good boost for the beleaguered county and a financial loser for Maryland taxpayers.

Let's look beyond the bright display of optimism at a news conference where County Executive Jack Johnson and United chairman Victor MacFarlane touted the 1,000 jobs and $65 million and more per year in economic activity that a soccer stadium supposedly would generate.

Away from the spotlight, Johnson was more straightforward: Don't bet on much new development springing up around a soccer stadium. "I don't think it's going to create a lot of revenue," he said on WAMU's "Politics Hour." It's not dollars that argue for building a stadium, Johnson said, but rather "public interest" and "public benefit."

Boosters talk about psychological benefits because a soccer-specific venue hosts far fewer revenue-generating events than a downtown arena or an urban baseball stadium. A legislative policy analysis concluded last fall that a Prince George's soccer stadium "would add to the state debt load and reduce the state's debt capacity."

Could Maryland raise money for stadium construction? In Washington, the Forest City development firm halted construction last week on residential buildings near the baseball stadium because the D.C. Housing Finance Agency couldn't sell bonds to pay for units the District is subsidizing. In these tough times, will bonds for a stadium sell?

Maryland Comptroller Peter Franchot says yes. "This is an economic development project that makes sense even in bad times," he told me. "It's going to be something like Bethesda or Ballston in Prince George's County. You'll see huge development if they put the stadium near a Metro station."

Franchot defends the most remarkable part of the Prince George's deal, in which MacFarlane, who in flusher times promised to pay the entire cost of a soccer stadium at Poplar Point in Southeast, now proposes to put up zero dollars. Franchot and MacFarlane say it's good enough that D.C. United would eventually cover about a quarter of the stadium's cost through rent payments.

There's nothing terribly wrong with public financing -- if government backing is rewarded by ancillary development that expands the tax base. The evidence so far is that that's unlikely.

The best argument for a soccer stadium in a feasibility study commissioned by the Maryland Stadium Authority is that it could enhance the image of Prince George's and increase "the overall quality of life." Alas, that nebulous benefit was more than countered by a slew of warnings:

ยท The location is a demographic mismatch. According to Major League Soccer, its fans are 63 percent white, 19 percent Hispanic and 11 percent black -- similar to the national profile but almost a mirror image of Prince George's County, which is 18 percent white, 12 percent Hispanic and 64 percent black.


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