Prince George's County Council Chairman Gerard McDonough drafted legislation yesterday to provide tax relief for the ailing Washington Capitals hockey team, and by the end of the day a majority of the Council and County Executive Lawrence J. Hogan said they would support the measure.
One of four demands outlined Tuesday by Capitals owner Abe Pollin for keeping his National Hockey League team in the area was that the county reduce its amusement tax on Caps tickets from 10 percent to one-half percent for the next four years.
"We really have no choice," said Councilman William Amonett. "We're going to lose the money anyway if they leave . . . so, really, what choice do we have?"
In the eight years the Capitals have existed (at a reported loss of $20 million to its owner) the team paid an average of $233,624 a year to the county in amusement tax, according to County Information Officer Carl Gagliardi. In fiscal 1982, which ended June 30, it paid $268,750, he said.
In a year in which several hundred county teachers have been laid off because of budget contraints, Gagliardi said Hogan, "was not real thrilled" about losing the revenue. Hogan said later he would sign the measure, "since if we lose the Caps we'd lose the spinoff benefits, employment, people who buy drinks and dinner when they leave, etc." He added that he feared the action would open up a "Pandora's box" of requests for similar relief.
Council Chairman Gerard McDonough said he asked a staff member to draft tax relief legislation after Pollin's conditions were made public Tuesday.
Warning that the proposal was still in rough form, McDonough said it calls for the tax to be reduced to one-half percent of the Capitals' ticket receipts over the next three years, and gradually return to 10 percent in the fourth through sixth years. The county would receive nothing from the team in the first three years, since the tax payment would go the State of Maryland. McDonogh said the bill could be introduced next Tuesday and enacted at its session Aug. 24.
Only council member Sue V. Mills said she would oppose the effort, calling it "a government subsidy of private business. First it was Chrysler, now it's the Caps, what next? . . . It appears to me to be blackmail: 'If you don't give me this, I'll take my toys and go.' "
Last year, two groups appealed unsuccessfully for relief from the amusement tax. President Reagan's inaugural committee sought to avoid paying nearly $200,000 owed from a star-studded entertainment at the Centre. A month later, the Atlantic Coast Conference threatened not to return to the arena if the county refused to grant the ACC an exemption from nearly $100,000 in taxes from its basketball touranment held there. The county refused to back down and the taxes were paid.
One of the businesses that would be affected should the Caps leave town is Michael's, a small restaurant a half-mile away from Capital Centre. Owner Michael Tsourounis said fans, players, coaches and team executives stop in before and after hockey games. "As our business stands now," he said, "things are poor enough . . . Look, if we lose hockey then we might as well close up . . . We'd be devastated."
The Caps play 40 games a year at the Largo arena, and 10 to 13 of the visiting National Hockey League teams stay at the Sheraton Lanham Motor Inn. Most teams require more than 20 rooms a night and catering services.
"We would have a serious loss of business during softer periods if teams no longer stopped in town," said Eric Rill, owner of the Sheraton Lanham. "We've put a lot of work into attracting those teams and we wouldn't want to see that all wasted if the Capitals left town. Their business is very important to us," Rill said.
Spokesmen for both the Prince George's County and District of Columbia Chambers of Commerce said losing the Capitals would cause more harm than simple revenue loss.
"The image problem, the fact that Washington is losing another major league franchise the baseball Senators left 10 years ago and the feeling that Washington is not a major league city will have an unlimited economic impact on the area," said Bob Zinsmeister, director of governmental affairs for the Prince George's Chamber. "It will mean that business and people ready to move into Washington might take decide against coming here. It would be a civic knockout blow."