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D.C. Council member proposes spending cap for Wizards facility

D.C. Council member Elissa Silverman (I-At large) doesn’t want to see D.C. on the hook for construction cost overruns. (Bill O’Leary/TWP)

D.C. is close to agreeing to put up $50 million in taxpayer funds for a 5,000-seat arena and Washington Wizards practice facility, but one District official wants to make sure it doesn’t spend a penny more than that.

Council member Elissa Silverman (I-At large) proposed Tuesday to bar District leaders from spending more than $50 million to build the facility. That’s in contrast to a deal negotiated by D.C. Mayor Muriel E. Bowser (D) and Events DC, in which it would be on the hook to pay for any cost overruns that should arise. Events DC is a sports and events booster that receives more than $100 million in annual taxpayer support but has a separate, pro-business board.

Bowser’s proposal would bring jobs and tax revenue to a neglected area of Ward 8 and has been largely supported by the council to this point, despite some questions about why taxpayers would foot 92 percent of the $55 million cost. The facility would be publicly owned and operated by Events DC and available for uses such as concerts in addition to Wizards practices and Washington Mystics home games.

Silverman said her proposal wasn’t aimed at sidelining the project but rather ensuring that D.C. taxpayers won’t foot the bill for unforeseen costs as they did for Nationals Park, school modernization projects and the new two-mile streetcar line, which cost $200 million over more than a decade to build. She said five of her colleagues agreed to introduce it with her, council members Anita Bonds (D-At Large), Mary Cheh (D-Ward 3), David Grosso (I-At Large), Kenyan R. McDuffie (D-Ward 5) and Brianne Nadeau (D-Ward 1).

Three of her colleagues joined her in submitting a new approval resolution, an action that delays approval of the contract until April 7.

“We talk a lot in this building about accountability and transparency, and that is really what this bill is about,” Silverman said. She said it was important to remind her colleagues and residents that the District has a finite amount of money to spend on schools, recreation centers, ambulances and other needs. “If it ends up being a $60 million project or a $70 million project, that money doesn’t just grow on trees and it impacts what we can do on many other capital projects.”

D.C. has begun demolishing existing buildings on the site, located on the east campus of the former St. Elizabeths hospital in Southeast D.C., and Bowser says she expects construction to be complete in 2018.

Bowser’s chief of staff, John Falcicchio, called the proposal “troubling” and compared it to the council’s reluctance to approve funding last year for a community center on St. Elizabeths. “Don’t tread on Ward 8,” he said through a spokesman.

Greg O’Dell, president and chief executive of Events DC, declined to take a position on Silverman’s proposal. He said he wanted to be sure, however, that in trying to attract future events, acts or entertainment to the venue that he maintains the financial flexibility to make additions or enhancements that could close the deal with a possible tenant, such as another sports team or attraction.

“I appreciate the council’s concern, specifically council member Silverman’s concern,” O’Dell said. “I think we want to make sure that we are demonstrating that we can manage the project. What we also want to make sure is that we are mindful that we are not limiting our investments in this community.” 

O’Dell said he had not yet discussed the idea with officials from Monumental Sports & Entertainment, the company that owns the Wizards and would be expected to pay cost overruns in Silverman’s plan.

Officials for Monumental declined to comment, but while Silverman was working through the final wording of her proposal on Monday, Ted Leonsis, majority owner of Monumental, was speaking to 200 sports, tech and marketing executives in a ballroom at the Marriott Marquis convention center hotel, describing how he is growing his company into a media and entertainment one capable of providing year-round entertainment.

Monumental is working on adding a D League basketball team that would play at St. Elizabeths and an Arena Football League team that would play at the Verizon Center.

“You can expect us to be adding to our roster of teams so that we can have more summertime programming, so that we can have more programming that we can distribute through our series of network and distribution channels, and also so that we can place teams into our venues,” he said

Leonsis spoke at length to the crowd about the importance he believes sports play in building community and urban economies and offered a number of examples from the District’s recent past. He said he hoped the practice facility in Ward 8 would do the same.

“That community has not been embraced enough by out federal government and by our city itself,” Leonsis said of the area around St. Elizabeths. “It’s a great neighborhood, with it’s own culture, it’s own personality and it needs jobs. It needs a light shined on it showing that it is a vibrant, very unique part of our city. So the city sees what’s happening to [downtown] with the Verizon Center, it sees what’s happening with the thriving new Yards area that has sprung up around Nationals Park … and we said if they were to build an arena we would take the Mystics and it would motivate us to find other teams to put into that 5,000-seat arena.”

Council member Jack Evans (D-Ward 2), a supporter of the mayor’s plan for the venue, called the spending cap “unneeded” at a Tuesday breakfast meeting of the council.

“You know, she hates stadiums,” Evans said. “In many ways the city is building the stadium, so to ask for some other party to cover the cost overruns — doesn’t that sound a little bizarre? On its face it makes no sense.”

Silverman said she recognizes the need for investment in the city’s neglected neighborhoods but said there was no reason the deal couldn’t be made more financially sound and transparent about the costs.

“What I want to do is engage in a discussion with Monumental in making sure that the use of tax dollars is efficient,” she said. “It’s not meant to be a deal killer. It’s meant to impose efficiency on a very big expenditure.” 

This post has been updated. Staff writer Aaron Davis contributed.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz