Mayor Vincent C. Gray said the District would pay $120 million — for land, streets, sidewalks and other infrastructure costs — toward a new soccer stadium. But legislation he recently submitted to the D.C. Council makes clear that’s not the whole story. Always note the asterisk.
The price quoted by the mayor doesn’t include, for example, a multi-year sales tax exemption that would be provided to the team, concessionaires and retail outlets operating inside the stadium. It also doesn’t include the expense of providing D.C. United stadium owners with property tax abatements for up to 20 years.
Do those write-offs amount to a reimbursement of the $140 million that D.C. United said it would spend on its new stadium? A spokesman for the chief financial officer could not tell me the exact cost for two decades of tax exemptions.
“We need to work our way through this to decide whether it’s in the best interest of the District,” council Chairman Phil Mendelson told me.
Following a recommendation from Ward 4 D.C. Council member and Democratic mayoral nominee Muriel Bowser, the council set aside $200,000 to hire an expert to provide an economic-impact analysis. “Before we approve any deal, we should have a thorough understanding of the likely impacts,” she said through a spokesman. “It [also] should be a transparent, thoughtful process from beginning to end.”
Why spend more public money? It doesn’t take an expert to tell the council what it already knows: The deal, as presented by the mayor, is lousy. Taxpayers would be ripped off. Developers and corporations would walk away with stuffed wallets while wearing Cheshire Cat grins.
The government is giving away the Frank D. Reeves Municipal Center at 2000 14th St. NW. Initially assessed at $128 million , Chief Financial Officer Jeffrey DeWitt now says it’s worth around $73 million.
But that wasn’t low enough for Gray and his team. They agreed to a price of $55.6 million. The Akridge Co. would only pay $37 million in cash for the building, plus it would exchange land it owns on the proposed stadium site. Government sources told me that construction of a new stadium at Buzzard Point ultimately would increase the value of other Akridge-owned land in the area.
Quick, call the police. A robbery is in progress.
The city also plans to lease back the Reeves Center from Akridge until a new office building is constructed in Southeast, according to Mendelson. Neither rental fees nor construction costs have been calculated in the stadium price tag.
“People may look at the District as an over-generous welfare state. But what we give in welfare to average citizens pales [compared] to what we give to some of the oligarchs involved in economic development,” said council member David Catania (I-At Large), who also is running for mayor.
Catania, like most council members, including Bowser, supports the stadium construction. But he argued that the Reeves Center should be “decoupled” from the package and that there should be a separate conversation about office space requirements. “I would invite a more thoughtful analysis of workplace needs and usage across our government,” he said.
The abatements also are problematic. “The real property tax probably makes sense,” said Mendelson. “[But] the sales tax I don’t quite get.”
Truly baffling is this: Gray did not incorporate any stadium-related costs in his 2015 budget and multiyear financial plan. The District is pressed against its debt ceiling. If the council approves any portion of the stadium package, it almost certainly would instigate a redirection of capital improvement money. That could have an adverse effect on critical projects such as school modernizations and affordable housing development.
Mendelson referred select parts of the stadium legislation to three committees — government operations, economic development and finance and revenue — along with his Committee of the Whole, which has scheduled a hearing for the end of June. The complicated referral likely means a first vote may not come until October. “There’s no question this will get caught up in the election,” he said.
The least political and best course may be to wait — until a new mayor assumes office or, more prudently, until the chief financial officer has completed the council-mandated cost projections of the city’s infrastructure needs for the next 15 years.
Should a stadium be the District’s priority when its bridges are crumbling?
Delays may mean Gray won’t have the stadium as part of his legacy. But that shouldn’t be part of the council’s considerations.
Mendelson and his colleagues must focus on balancing the need to grow the Southwest community and provide a decent, much-deserved stadium for D.C. United against their obligation to be good stewards of the District’s physical assets and the public’s money. That requires slowing the action to allow for more thoughtful deliberation.