DC United Stadium, Some Questions

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We’re still working to get more details on the proposal for a new stadium for DC United in Prince George’s County. There’s a press conference Monday that will hopefully offer some more specifics on the plan. While it does appear that the county and the state are serious about luring United, it’s important to note that it’s still very early in the process. The legislation introduced Thursday to the General Assembly by Delegate Melony Griffith reads as follows:

“Authorizing the Maryland Stadium Authority to review and make recommendations relating to the development, financing, and construction of the Prince George’s County Soccer Stadium; authorizing the Authority to acquire by specified means a Prince George’s County Soccer Stadium site or an interest in the site; requiring the Authority to transfer lease payments to the Authority appropriated by the State to the Prince George’s County Soccer Stadium Financing Fund; etc.”

As you can see, there are not a lot of specifics here. So let’s look at some of the big questions that will need to be answered before D.C. United starts to play in the suburbs.

-Where will the stadium be located? And who will pay for the land acquisition?

United officials are said to be looking at more than a half-dozen sites, so that obviously needs to be sorted out. And what’s unclear here is whether the quoted price tag of $180-195 million includes the cost of acquiring land, whether the land is being provided to D.C. United for free or if there will be some sort of ground lease. I’m also curious as to whether we’re talking about land that is currently ready to build on, or if this is another eminent domain situation. Sometimes the issue of land—how to get it, who would control it—is the stickiest part of a stadium project.  

-Who will pay for the stadium, and how?

DC United has stated that the stadium will be paid for by the team and through new revenue generated by the team and facility. Which sounds as if the team will provide some up front costs and then obtain some sort of loan or bond, which would be paid back using future revenues. But the devil is in the details. The new Yankee Stadium and the Mets’ new Cit Field are technically being privately financed by the teams, but money was first obtained through a series of tax-free bonds floated by the city, which also offered some additional tax breaks to the teams. It’s been quite controversial.
        Keep in mind, too, that United owner Victor MacFarlane is a real estate developer. This plan could involve not just the construction of a stadium, but other related projects that would, in theory, generate revenue to help pay for construction. Often in projects such as that, the local municipality would get involved by offering a program such as a PILOT (payments in lieu of taxes), in which the municipality allows future tax revenue to be used to make payments toward construction. Some people view this as just a sneaky way of using public dollars.

-Will the county/state provide infrastructure upgrades?

FedEx Field was privately financed, but the state kicked in tens of millions of dollars for roads and such. Same goes for Verizon Center. The Poplar Point concept in D.C. was scuttled because the two sides could not agree on a plan to pay for infrastructure around a new soccer stadium, so it will be interesting to see what the plan is here.

-Will D.C. United and pro-stadium groups make the economic development argument?

We’ve already seen that the Maryland Stadium Authority believes the stadium could bring 1,000 jobs and as much as $80 million in direct economic impact. We will likely see more of these types of studies, which many economists find flawed and inaccurate. Most economists simply don’t buy the argument that stadiums generate economic development for the communities in which they are built. And FedEx Field, also located in Prince George’s, is certainly not the best example of how to get the most out of a stadium.

To overcome this, D.C. United must show that the new stadium will be a place not just for Major League Soccer games, but games involving tems such as the Washington Freedom, the Bayhawks lacrosse team and local college teams. And it must also be a venue for concerts and other events. Verizon Center works from an economic development standpoint because it has four major tenants and is used more than 200 times a year. The LA Galaxy’s Home Depot Center is also heavily used for events other than soccer. United must strive for a similar level of activity, if possible.

-From a legislative and political standpoint, what has to happen?

As we saw with the development of Nationals Park, there can be a big gap between presenting a bill supporting a stadium and finally getting the go ahead to start building. Don’t be surprised if the stadium becomes a political hot potato given the budget problems at the state and county level.

-What role will the economy play?

At the moment, it is almost impossible for anyone to borrow money for stadium financing. The tightening of the credit markets just won’t allow it. Even if D.C. United is able to get financing, it will probably be very expensive. And MacFarlane and his partner, Will Chang, are wealthy men but not as wealthy as they used to be. The good news, though, is that no one is building anything just yet. By the time United is ready to break ground, economic conditions may be better.

-How will D.C. respond?

If District officials want to keep the team in the city, they must respond quickly with some sort of solid proposal, either back at Poplar Point or, more likely, some place like the RFK campus. The city has some leverage here, because United would most likely prefer to stay in the city if all things are equal. (The team is called D.C. United, after all.) But given the way the Poplar Point situation fell apart and the circus surrounding development of Nationals Park, United may decide that dealing with the city is just too much work.

-How will fans respond?

A stadium in Prince George’s County would probably only be 15 minutes or so from where D.C. United plays now. But people from Northern Virginia may not realize that or care. There are a lot of people who believe, fairly or unfairly, that Prince George’s County has too high a crime rate in some areas or just simply isn’t “nice enough” an area for them to visit.

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