Photo by Keith Allison on Flickr.
Tens of millions of dollars in public money would pay for a pro basketball practice facility and small arena at the St. Elizabeths campus, under a deal reported Monday. Will it spur needed economic development or take away funds from needed public projects like schools?
A recent candidate for public office said about sports subsidies, “We have to make the case that this is really going to generate the type of economic revenue that would make our up-front investment worth it. We still have a lot of capital needs in the District of Columbia, schools being really at the top of the list.”
That was Muriel Bowser in 2014. Will she make a persuasive case for this one?
What’s in the deal?
Under the deal, Events DC, the authority that runs DC’s convention center, would pay up to $32.5 million toward building the facility, which it would own. The NBA Washington Wizards would use the complex as a practice facility, while the WNBA’s Mystics would play games there instead of the Verizon Center. It would also host arts, cultural and community events.
The buildings could cost up to $56.3 million, and the difference could come from some combination of funds from the DC budget and from Monumental Sports & Entertainment, the entity that owns the Wizards and Mystics. The exact mix is reportedly still being negotiated, and would also need approval from the DC Council (not a foregone conclusion).
Monumental would also contribute $10 million for as-yet-undisclosed (or undecided) amenities for the nearby Congress Heights area, Jonathan O’Connell reported in the Washington Post. Meanwhile, the District would provide the land gratis, along with roads, lighting, utilities, and parking lots.
Is this a good idea?
While its sports deals haven’t come close to the ridiculous giveaways of some stadium deals, DC has still been willing to throw substantial public money at pro sports despite near-unanimity among economists that such deals rarely make fiscal sense.
If there is any good spot, St. Elizabeths isn’t such a bad one. DC took control of the huge east campus, which abuts Congress Heights Metro, and the Gray Administration announced grand plans for a technology innovation center there, but progress has been very slow.
If this center actually kicks off economic growth at St. Elizabeths, that could be valuable, as could drawing people across the Anacostia River to a part of the city many never see. What we don’t know, and have only heard snippets about secondhand, is whether the lack of change at St. Elizabeths is due to a lack of private sector interest or just government slowness; for example, most of the site still lacks power and roads.
DC will have to put those in as part of this deal; if it simply put them in anyway, would that be enough to trigger growth without a large sports subsidy? Economic development officials have not disclosed enough to answer that.
What would candidate Bowser say?
During her 2014 campaign, I interviewed Bowser along with her competitors, and sports subsidies were one of the topics. She said,
My approach is that there is economic development that it’s okay for the city to incentivize… but it has to make sense for us. ...
We also have to make the case that this is really going to generate the type of economic revenue that would make our up-front investment worth it. We still have a lot of capital needs in the District of Columbia, schools being really at the top of the list, and other public buildings. So what are we going to get out of this investment?
Now having said all that, I think that this team has been a good neighbor in the District. There are a lot of District residents that support this team. And I hope they come to a deal that makes sense for us.
Bowser was talking then about the proposed deal for a soccer stadium at Buzzard Point. She primarily opposed a “land swap” where the District would give developer Akridge the Reeves Center at 14th and U in exchange for land in Buzzard Point, and she later followed through and blocked that piece of the plan.
But the soccer deal ultimately cost about $150 million out of the DC budget. Supporters said it would revitalize Buzzard Point and keep a beloved soccer team in the city, while detractors noted that the budget delayed many capital projects like school renovations.
Bowser added at the time, “I think when you know we have a billionaire owner, which we do, some people have to ask the question of why do we have to give them $150 million. We have a lot of priorities for DC.”
Watch this segment of my interview with Bowser here: