Will the Arena Create 30,000 Jobs?

Will the Arena Create 30,000 Jobs?

Secretive calculations raise questions about proposal.

The promise of 30,000 jobs has been at the center of arguments in favor of a controversial proposal for a sports arena in Potomac Yard. It was a talking point for Gov. Glenn Youngkin at the December announcement, and he has deployed it countless times in person and online. Supporters frequently use it as an argument in favor of the proposal to create a public authority that would own the land and lease it to Monumental Sports & Entertainment.

But is it true?

Two months after announcing the proposal, the city of Alexandria is now finally releasing some additional information about how a consultant calculated the projection of 30,000 jobs. But the one-page document that was produced 54 days after a request for information is heavy on graphics and light on details. It says nothing about the assumptions leading to the numbers. Questions to the city government about the assumptions were referred to HR&A, the consulting firm that is the source of the projection. HR&A declined to be interviewed for this story, referring questions to the Alexandria Economic Development Partnership.

"The delay in providing you specific information about jobs is that information was never intended to be released at this level," says Stephanie Landrum, president and CEO of the AEDP. "We cannot release information while we are still negotiating, and frankly that has been the major deciding factor in how and what we've released."

THE LACK OF TRANSPARENCY is raising new questions about the proposal, which is now in a state of limbo after being rejected by the state Senate. Lawmakers are expected to return for a reconvene session next month, and they could theoretically consider a budget amendment from the governor reviving the discussion. Even if there's no resolution on April 17, the governor could theoretically call for a special session whenever he thinks he has the votes.

"The Senate has to engage," the governor told reporters last week. "I would strongly suggest that they piggyback on the great work that was done in the House so we can get together and deliver something for Virginia that helps all of Virginia in the most extraordinary economic development opportunity that I think Virginia has seen."

Not everyone agrees about the merits of the economic development opportunity. Critics worry that the 54-day delay in providing information about the 30,000 jobs is a red flag, and they point to a lack of specifics in the document that was eventually provided. They say the lack of detail is alarming, especially considering the magnitude of what the governor is asking lawmakers to approve. Ultimately, the idea that the area would create 30,000 jobs has not been substantiated.

"This is ludicrous," says Heywood Sanders, a professor of public policy at the University of Texas San Antonio. "It's simply not plausible."

THE TWO-MONTH delay in providing support for the claim of 30,000 jobs is an indication to Sanders that the city and Monumental are now scrambling to come up with some kind of data to justify a claim that's already in widespread circulation. Many media outlets have reported the claim even though its origins are still shrouded in mystery. Now that the city is sharing the one-page document detailing some additional information about the 30,000 jobs, Sanders says it's clear the emperor has no clothes.

"It either assumes that anyone who reads this is totally naive," he says, "or it's based on the assumption that the governor of Virginia quoted 30,000 jobs some months ago as the product of this project, and they somehow finally had to come up with a document that got close to 30,000."

Landrum denies that city leaders were scrambling to come up with an after-the-fact justification. She says that the projection was from June, when HR&A delivered a document that included that forecast. That document has never been released to the public, although the city did eventually release a document from HR&A dated Jan. 22 that makes predictions about the number of software publishers and management consultants who would be employed at Potomac Yard. That document accounted for some but not all of the 30,000 jobs, which is why an additional document needed to explain the forecast.

"It's not a normal part of what gets released to the public because it does include proprietary information," says Landrum. "Frankly, it shows other businesses how we evaluate projects and will give them better information to come negotiate with jurisdictions moving forward."

"This is ludicrous. It's simply not plausible."

— Heywood Sanders, professor of public policy, University of Texas San Antonio

THE SECRECY surrounding the prediction is alarming to critics of the proposal, who say that the public has a right to know how these numbers were calculated. The idea that supporters could keep that kind of information secret based on a claim of protecting proprietary information is not persuasive to critics, who wonder if more data might have been available sooner if it had supported the thesis.

"If they really understood what was going to happen and really had the cost and benefits mastered, they would have rolled those out right away," says Greg LeRoy, executive director of Good Jobs First, a nonprofit research group on economic development. "Without giving us the underlying assumptions, there's no way to judge this. And there's every reason to believe that it's inflated by faulty assumptions."

For now, all those assumptions remain a secret. And elected officials in Richmond and Alexandria are being asked to make decisions based on faith that the projection of 30,000 jobs is believable. City officials say HR&A has already done a significant amount of work in Potomac Yard, and they stand by the projection as a solid analysis. 

Critics aren't buying it.

"If there are a whole bunch of numbers and you don't have the backing data and you don't have the footnotes, then the numbers can say absolutely anything," says Neil deMause, co-author of the book "Field of Schemes," which is also the title of his blog. "And I think that's kind of the goal here."

HE POINTS TO DECADES of research he says show these kinds of deals are bad for taxpayers. Team owners rake in profits, he says, and some businesses stand to benefit. But, he says, in example after example the rich get richer while the public gets fleeced. City leaders say their proposal is different because it catalyzes one use and a district around it.

"I guess it's possible that Alexandria will be different from all of the other hundreds of times this has happened since the 1980s," said deMause. "But I would not put my money or Virginia taxpayer money on it."

When asked for a model of a publicly financed deal that worked out well for taxpayers, Landrum instead points to a 2013 project in Georgia. Cobb County spent $300 million in taxpayer funds to construct Truist Park to host the Atlanta Braves. Advocates said the deal would be a home run, but an analysis from Kennesaw State University concluded that the project resulted in a property tax increase rather than a rollback.

"Despite being ideally located and developed as part of a comprehensive mixed-use project, Truist Park is not an exception to the dismal economics of stadiums," wrote J.C. Bradbury, a professor of economics at Kennesaw State University. "This stadium has not been different from past publicly subsidized stadiums that have failed to generate promised economic returns."

ACCORDING TO INFORMATION that has been released, almost 1,000 people will be directly employed at the arena. These include parking, security, food concessions and arena retail sales. These are jobs critics say are not really created at all because they are essentially pirated from the existing facility in DC. The vast majority of the jobs come in what city officials call "Phase III," which starts in 2031 and continues through 2036.

"There's actually a large number of jobs on day one because the whole project needs to be constructed," says Landrum. "So in addition to the 30,000 permanent jobs that we've shared there are also 17,000 construction jobs that will be operating on site from day one and throughout the buildout of the various phases."

Agenda Alexandria on Proposed Monumental Arena

On Monday, March 25, 2024, Agenda Alexandria will host a panel discussion at the historic Alexandria History Museum at the Lyceum, starting promptly at 7 p.m.


* Katie Waynick, President of the Del Ray Citizens Association, spearheaded a survey regarding the arena plan in collaboration with neighboring civic associations — Rosemont, Lynhaven, and Hume Springs. She will unveil survey findings.

* Former Vice Mayor Andrew Macdonald, a key figure in the Coalition to Stop the Arena.

* Dr. Dennis Coates, Professor of Economics at the University of Maryland Baltimore County

* Tom Kopko, board member of the Cameron Station Civic Association.

Note: Board members of Agenda Alexandria made several attempts to invite decision-makers from Monumental Sports and Entertainment, JBG Smith (owner of the Potomac Yard property), and the Alexandria Economic Development Partnership (AEDP) to participate as panelists but these parties declined to participate.

* March 25, 7 p.m. at the Lyceum, 201 S Washington St, Alexandria, VA 22314