- The Washington Times - Monday, August 1, 2016

Shovels haven’t even hit the ground yet, but the tab for the new multimillion-dollar Washington Wizards practice space and entertainment arena already is expanding: The city agency tasked with shepherding the project says the extra millions are necessary to build a competitive facility in a growing region.

In a letter to D.C. Council Chairman Phil Mendelson last week, Events D.C. — the District’s entertainment and convention arm — said it would need an extra $10 million on top of the initial $55 million cost to build the facility, which has been touted as a key to economic revival in Ward 8.

Erik Moses, a senior vice president of the quasi-governmental organization, said in an interview that the original cost projection was simply a preliminary estimate and that the extra money is needed to house a high-tech practice facility under the same roof as an entertainment arena.

“In months since [the initial estimate], architects and general contractors have gotten on board to figure out exactly what is needed. The extra money will get to the minimum standard of what’s needed for a high-quality space,” Mr. Moses said. “We’re not trying to turn a Chrysler into a Mercedes. We just weren’t at the higher level of planning when announced.”

In September Mayor Muriel Bowser unveiled plans to build a 5,000-seat, 118,000-square-foot arena on the campus of the former St. Elizabeths Hospital in the Congress Heights neighborhood. The arena, which is projected to open in 2018, would serve as a practice facility for the Washington Wizards and Mystics about 40 percent of the time; the rest would be used for concerts and other events.

The training facility will feature swimming pools, two practice basketball courts, several training rooms and a team kitchen, among other things.

When hashing out the costs of the deal, Wizards owner Ted Leonsis said his company, Monumental Sports & Entertainment, would pay about $4.46 million of the then-projected $55 million. The District agreed to pay the rest, as well as any cost overruns that could occur.

One of the major differences in the more costly plan is the split-bowl seating in the arena. The original project called for less-expensive single-bowl seating, but Mr. Moses said the split bowl will allow the cheaper, upper deck seats to be closer to the action, creating a better experience for fans. The new setup will reduce the capacity from the planned 5,000 to about 4,200 seats.

“We want this thing to be optimal for music,” Mr. Moses said. “The split bowl brings more seats closer to stage. It’s still good for basketball, but it’s really good for entertainment.”

The fact that taxpayers would be on the hook for any added costs irked council member Elissa Silverman, at-large independent. In March she introduced a bill that would have barred the District from spending any more than the original $50 million it had pledged.

The measure ultimately failed amid pushback from council member LaRuby May, whose ward will house the arena. Ms. May said she found it strange that costs would be capped in the predominantly black and economically struggling Ward 8 when there had been no budget caps for similar projects — including Nationals Park — in more affluent areas of the city.

Events D.C. Board Chairman Max Brown also shot back at Ms. Silverman in a March 24 interview on WAMU’s “The Kojo Nnamdi Show,” saying there would be no cost overruns.

“We don’t want to be micromanaged like a teenager with a debit card,” Mr. Brown said on the show. “I’m a fiscal pit bull. We have a board that is serious about coming in on budget.”

But now with the city on the hook for an extra $10 million, Ms. Silverman once again is questioning the spending transparency of Events D.C.

“Earlier this spring, I was concerned that there was very little transparency about the costs of the project and hoped that the lack of information would challenge the Council to hold Events DC accountable,” she said in a statement Friday. “I’m concerned that — despite promises that this project would be on time and on budget — this cost overrun has come even before we have broken ground.”

Ms. Silverman said cost overruns are not only bad for taxpayers, but also the Ward 8 residents who would benefit from the arena. The new plan, which costs more but will reduce the number of seats, is taking jobs away from those who need them most, she said.

The project was supposed to bring about 900 jobs to the city and about $90 million in tax revenue annually. But with the arena’s reduced capacity, that could change.

“Even more concerning to me is that we will be spending more money for fewer seats, which means fewer fans, fewer jobs and less benefit for Ward 8,” Ms. Silverman said. “Ward 8 has waited too long for economic investment, and we want to make sure every dollar we spend brings the highest return.”

Mr. Moses said the extra money being spent by Events D.C. actually will make the venue more attractive, especially in a region with no dearth of venues.

“This building is going to have to compete with a lot of buildings in the region,” he said.

When questioned about the possibility of further cost overruns, Mr. Moses said there are always unknowns with development projects.

“So we’re going to manage the process as strictly as we can. We’d love to spend less money if we could and still build a top-quality space,” he said.


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