Buried 784 pages deep in Loudoun’s proposed budget for fiscal 2015 is a $500,000 expenditure that has caused grumbling in the county’s rural business community. The expenditure represents Loudoun’s payment to the Washington Redskins as part of an unusual eight-year marketing partnership.
In 2012, the Board of Supervisors agreed to pay $2 million to the NFL team, which practices and has its headquarters in Ashburn. In exchange, the county receives “marketing assets” that brand Loudoun as the corporate home of the Redskins in on-air mentions, advertisements and news releases, and on the backdrop that appears behind speakers at the team’s news conferences.
The county also receives special access to events at the Redskins’ practice facility in Ashburn, pregame field passes, club-level game tickets and the use, at one game a year, of a FedEx Field premium suite, which county officials use to entertain business leaders and prospects.
Critics of the partnership say that spending $2 million on the marketing agreement is not the best use of scarce tax revenue. They also question whether it is appropriate, in light of the move of the team’s training camp to Richmond last year, to pay for the agreement using tax funds that are restricted to the promotion of travel and tourism.
“They’re giving the money away to an organization that doesn’t need it, and they’re cutting all sorts of funding from worthy recipients,” said Avis Renshaw, who owns a farm near Lucketts and serves on Loudoun’s Rural Economic Development Council. “I would argue that the rural economy is far more worthy of [tax] funding. Look how much business the wineries bring in from outside Loudoun County.”
Jean Brown, owner of a bed-and-breakfast in Lincoln, said, “I just think the priorities have gotten skewed. [The tax] was supposed to encourage tourism, and the Redskins took off and moved [the training camp] to Richmond.”
Loudoun pays for the agreement using restricted funds generated by a levy on hotel and motel rooms. About 43 percent of the tax revenue is restricted under Virginia law and may be used only on programs that promote travel and tourism in the county.
Board of Supervisors Chairman Scott K. York (R-At Large) said it is appropriate to use restricted tax revenue on the Redskins agreement, even with the loss of the training camp, because it helps the county’s overall economic development efforts.
“I have no problem now, because I believe in the long run it’s inducing ultimately what we are trying to do . . . to expand our commercial tax base, and expanding the commercial tax base does help to bring heads in beds because of business travel,” York said.
Renshaw said she was “shocked” when she learned that the county spends restricted tax funds on the Redskins partnership. Jim Burton, a former four-term supervisor and finance committee chairman, said the partnership is an inappropriate use of restricted funds.
“The [tax] is not supposed to be a slush fund,” Burton said. “If the agreement is continued, the funds should come out of the Department of Economic Development’s budget.”
Although the proposed $500,000 expenditure in 2015 would come from the restricted funds, the county’s use of those funds could result in shifting some of the tax burden to local taxpayers and reducing the county’s annual payment to the Loudoun Convention and Visitors Association, also known as Visit Loudoun.
Revenue from the hotel tax fell $162,000 below projections last year, and another shortfall of $325,000 is projected in the current year. Loudoun is scheduled to make $1 million in payments to the Redskins from the hotel tax reserve this year, leaving insufficient money next year to cover all the programs that currently receive hotel tax funding.
In his proposed budget for fiscal 2015, County Administrator Tim Hemstreet recommended shifting $251,000 in funding for economic development programs from hotel tax to local tax funding, placing them in competition with public schools and other government agencies for money generated by property taxes. Hemstreet also proposed reducing the county’s annual payment to Visit Loudoun by $121,000.
Darin White, a sports marketing expert on the faculty of the Brock School of Business at Samford University, said there might be a “prestige factor” to having the team headquartered in Loudoun, even though the team plays its home games in Maryland and carries Washington’s name.
“My guess is that, if you were to poll your average NFL fan, very, very few people would know that they actually are headquartered in a completely different place, which questions whether the county is really getting any value for that,” White said.