District officials defended Mayor Muriel E. Bowser’s plan to spend $50 million on a sports and entertainment venue for the Washington Wizards before the D.C. Council Tuesday, saying they had agreed to pay any construction cost overruns that could arise and were still negotiating key agreements despite early missed deadlines.
In September, Bowser announced the framework for a deal with the team’s owners in which taxpayers would put up $50 million toward a $55 million, 5,000-seat venue in Southeast D.C. where the Wizards would practice and the Mystics would play home games. Monumental Sports & Entertainment, owner of the teams, would pay $4.5 million and D.C. would own the center.
Chairman Phil Mendelson (D) expressed support for the project but asked why the District had agreed to pay for so much for it and whether the city was prepared to complete construction by the planned opening date in August of 2018. Monumental is the only tenant lined up for the facility and is expected to use it about 40 percent of the time, through Wizards practices, Mystics games and games from a NBA D-League franchise that has not yet been created. Events DC, the city’s convention and sports arm, would be responsible for booking events the rest of the time and would pay for any overruns beyond $55 million.
Mendleson said since Monumental’s contribution of $4.5 million equated to the rent the company would pay over the 19-year lease it expects to sign, the mayor had committed to paying for the entire bill even though ticket sales will go to Monumental. “How will we make any money off of this?” Mendelson asked.
Council member Elissa Silverman (I-At Large) asked the most pointed questions about the plans at the round table, questioning why the city needed to subsidize another entertainment venue. D.C. owns the Lincoln Theater on U Street, put $12 million into the Howard Theatre and provided hundreds of millions in support for the Wharf, the Southwest Waterfront development, which will include another concert hall. The MGM casino and hotel under construction at National Harbor in Prince George’s County will bring another venue across the Maryland line.
Silverman said it was “unforgivable” that the District had not done more to previously develop the Ward 8 neighborhood where the venue would be built, Congress Heights, but questioned whether $50 million could be better spent supporting existing businesses or bringing in a college or university. “Why not just give the money directly to small businesses that are in Ward 8?” she asked.
Deputy Mayor Brian Kenner said the District envisioned the project as an anchor for the site that would generate private development around it, bring in new tax revenue and create jobs. Greg O’Dell, president and chief executive of Events DC, is overseeing construction and operation of the facility and is setting aggressive goals for contracting small, disadvantaged and District-based businesses and for hiring D.C. residents.
“This is something that we think is going to be much larger than just something for the Wizards and Mystics,” Kenner said.
Monumental Sports did not send a representative to testify.
Mendleson raised concerns about a deadline in the term sheet agreed to by Kenner and O’Dell with Monumental stipulating that a development agreement and lease would be complete by Nov. 16 or Monumental was free to negotiate a deal elsewhere. Kenner said those agreements were still not complete but would be soon and that he had been given verbal assurances from Monumental that the company was committed to D.C.
“We are still having some additional conversations with Events DC and Monumental and we anticipate having it done by the end of the year,” he said.
Most members of the council at the round table expressed support for the project and the aim of bringing economic development to Congress Heights, where poverty and and unemployment run well above the District average. Council member Jack Evans (D-Ward 2), an avid backer of sports facilities dating to the Verizon Center, said the venue was a chance to kickstart a similar revival to the one surrounding Verizon Center in Chinatown.
“It has to start someplace and this is the opportunity for it to start,” he said
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