Key Va. lawmakers reach deal to cap Commanders stadium bonds at $350 million

Washington Commanders fans pose Feb. 4 at FedEx Field at a party celebrating the team's unveiling of its new name. Virginia and D.C. are vying to lure the Commanders out of Landover, Md. (John McDonnell/The Washington Post)

RICHMOND — Virginia would kick in no more than $350 million in state tax revenue to build a potential home for the Washington Commanders under a new plan, the latest effort to rein in legislation that could have generated an endless funding stream for the National Football League team.

Senate Majority Leader Richard L. Saslaw (D-Fairfax), who had first estimated that the state would forfeit about $1 billion for a stadium, said Tuesday that he had insisted on the cap in recent negotiations with the team. And Del. Barry D. Knight (R-Virginia Beach), the sponsor of the House’s competing bill, said he and Saslaw had come to an agreement on that $350 million cap — as well as a tighter definition of what facilities could be publicly financed.

Mark T. Bowles, a McGuireWoods lawyer and lobbyist representing the Commanders, confirmed that the team is on board with the limit, which would not apply to local tax revenue that might be devoted to the project.

“We understand Sen. Saslaw’s concerns and his commitment to look out for the interests of the Commonwealth,” Bowles said in a text message.

A team spokesman declined to comment.

The cap agreement comes on top of other moves in recent days to tighten the House’s and Senate’s stadium bills, following a Washington Post report that highlighted potential loopholes.

At the start of the General Assembly session, Saslaw and Knight had proposed separate bills to attract the Commanders to Virginia. Both measures would create a stadium authority to oversee financing and construction of a stadium for the Commanders, who currently play at FedEx Field in Landover, Md., and have been shopping for a new stadium for years.

Under both measures, the state would give up a share of tax revenue generated by the stadium and by a commercial-entertainment-residential complex around it, with the authority using the proceeds to finance bonds for the stadium facility. But “facility” was defined so broadly in both bills initially that the bonds possibly could have financed not just the stadium but also the vast “mini city” that Commanders owner Daniel Snyder plans to build as well.

The Senate version also would allow the stadium authority to issue new bonds in perpetuity — and collect the tax revenue to pay them down — to finance new construction, expansion, repairs and maintenance. The House version would limit the bonds to 20 years.

Following The Post’s report last weekend, Saslaw proposed stripping references to “lodging” and non-team offices from the “facility” definition. He also recommended specifying that any financeable restaurants, retail and concessions be “inside the stadium” and “essential to the operation of the stadium,” and proposed setting a 30-year deadline on the stadium authority’s power to receive tax revenue to pay down the bonds.

The two changes Saslaw proposed still left the amount of money that could be raised from state tax revenue uncapped. But his latest move would set a $350 million ceiling on the principal amount of the bonds, plus issuance costs and other financing expenses.

The cap on state revenue would not prevent the stadium authority from collecting a share of local taxes — including sales, property, hotel and admissions taxes — if the locality of the project agrees.

“We’ve got a good bill now,” Saslaw said.

But Knight, the chairman of the House Appropriations Committee, said a lot of differences remain to be worked out between the two bills before the General Assembly’s scheduled adjournment Saturday. The House version, for instance, would require the team to dedicate at least half the revenue from stadium naming rights to cover the debt service, while the Senate bill would not. And while the only state tax that the House bill would allow the authority to tap is the sales tax, the Senate version would also include income tax revenue generated within the stadium, the team’s corporate-income tax revenue and pass-through-entity tax revenue.

“I’m willing to do my bill because it’s been implemented before. His has never been implemented before,” Knight said, referring to Saslaw’s proposed revenue sources. “He seems to think that he’s got a good bill that’s cash-positive for the state. I’m not sure if that’s true or not. I’m just not sure. I know mine is.”

Asked if the two were still far from a compromise, Knight held up his left hand and said, “I’m here, on what y’all know that my proposals are on the House bill.” Holding his right hand far off to the side, he added of Saslaw: “He’s over here.”

The team is considering three sites in Virginia: one in Loudoun County and two in Prince William County. It has continued to explore locations in Maryland and D.C., where officials have stepped up their own efforts to lure the Commanders in recent weeks as Virginia’s plans have advanced.

The Commanders are contractually obligated to play at FedEx Field until 2027, after which they could stay or seek another home.

Gregory S. Schneider and Sam Fortier contributed to this report.