Three D.C. Council members introduced a bill yesterday that would provide $50 million in public funding for improvements at Verizon Center, a move that supporters said would spur more economic development near the Chinatown arena.
As part of the deal, the city would take over ownership of the building from Washington Wizards owner Abe Pollin in 2047. In the meantime, the city would get a rent-free, 24-seat luxury suite, which includes a private bathroom, two TVs, a refrigerator, a food service area and an unobstructed view of the arena floor.
The legislation, under which the District would issue $50 million in bonds and increase the tax on tickets and merchandise at the center, was requested by Pollin, who built the arena with private financing. The Wizards, Washington Mystics and Washington Capitals play in the 20,674-seat arena, which also hosts major concerts.
The $50 million would cover the costs of numerous upgrades. Pollin has asked for, among other things, a new $5 million scoreboard, a $3 million renovation of luxury suites, $400,000 worth of flat-screen TVs in suites, $1 million for a new marquee and many improvements to the arena's satellite and cable systems.
The money would "help keep Verizon Center amongst the premier sports and entertainment facilities in this country, and enable us to continue to attract outstanding events to our Nation's Capital," Pollin's company said in a statement.
"In our first 10 years in downtown Washington," the statement said, "the greatest athletes and performers have entertained over 22 million patrons, generated over $70 million in taxes for the city and spurred over $5.7 billion in development downtown. Our goal is to continue this success for many years to come."
A list of the requested improvements obtained by The Washington Post also shows expenditures for building maintenance, such as the replacement of a $750,000 emergency generator, $3 million to repair the roof and $500,000 for interior painting.
"This is a good deal," said council member Jack Evans (D-Ward 2), who co-sponsored the bill with Chairman Vincent C. Gray (D) and council member Marion Barry (D-Ward 8).
Evans said the city government has a box that seats at least 40 people at RFK Stadium, where the Washington Nationals play. The box is controlled by the D.C. Sports and Entertainment Commission. The city will get a box at the publicly funded baseball stadium in Southeast Washington when it opens next year.
Evans said the city would have to work out who would be in charge of running the box at Verizon, but it should be used for "economic-development purposes."
No one else on the 11-member council joined Evans, Gray and Barry as a co-sponsor.
"I think Abe Pollin has done a phenomenal job with the Verizon Center, but I wasn't comfortable enough to sign on," said council member Kwame R. Brown (D-At Large).
Council member Mary Cheh (D-Ward 3) was harsher. "I don't think the city should be an ATM for sporting authorities," she said. "There's caution on my part."
Council member David A. Catania (I-At Large), a critic of the publicly funded baseball stadium, said that Pollin has been good to the District and that the $50 million could be a good investment of the city's money. But, he said, "I feel much more inclined to be supportive because this has been a partnership."
Under the proposal, the city would issue the bonds, which would be repaid by a 4.25 percentage-point increase in the tax on tickets and merchandise at Verizon Center. The current tax at the arena is 5.75 percent, so the legislation would push the tax to 10 percent.
Because about 60 percent of patrons at the center are from Maryland and Virginia, Evans said, much of the increase could be considered a "user tax" on nonresidents. "People who use the arena are going to the pay for the arena," he said.
The tax increase should generate about $4 million annually, said Evans, who heads the council committee on finance and revenue.
Barry credited Pollin with reviving the once-desolate downtown area, which has become a hot spot for restaurants and entertainment. "You have a growth downtown that's outstanding and out-of-sight," Barry said.
More than a decade ago, the city spent $70 million to buy the land at Seventh and F streets NW, improve the Metro station at Gallery Place-Chinatown and make other upgrades. But Pollin had to come up with $220 million in private financing to build Verizon Center. By contrast, the city has agreed to spend up to $611 million for the ballpark that will be home to the Nationals.
When the city requested a box at the Verizon Center in 1997, Pollin refused because the arena was built primarily with private funds.
Instead, Pollin offered a discounted, 12-seat box at $625,000 for five years. Barry, who was mayor at the time, entered into a lease, but it was stopped after criticism from city residents and Congress.
Now, in addition to offering a luxury suite, Pollin said that at Gray's request, he will open Verizon Center for the City Title girls' and boys' basketball championship games March 5 at no cost. Pollin's company, Washington Sports & Entertainment LP, will recoup expenses through ticket sales, said Matt Williams, a company spokesman.