The Deal Is Dead

The Deal Is Dead

On Wednesday afternoon, March 27, with Ted Leonsis and D.C. Mayor Muriel Bowser announcing a deal that would keep the Washington Capitals and Washington Wizards in D.C., and Virginia Gov. Glenn Youngkin conceding defeat, the deal to create a sports arena and entertainment district in Potomac Yard is dead. 

The announcements came just after Alexandria Mayor Justin Wilson said that the City of Alexandria had ended negotiations related to the Potomac Yard Entertainment District opportunity and that the proposal would not move forward. 

“We trusted this process and are disappointed in what occurred between the Governor and General Assembly,” Wilson said. 

Youngkin said: “A one-of-a-kind project bringing world-class athletes and entertainment, creating 30,000 jobs and $12 billion in economic activity just went up in smoke.”

The metrics and assumptions raised by Youngkin as he kissed the project goodbye were met by many with skepticism throughout the process. 

The idea that the arena could create 30,000 jobs was not backed up by data. Calculations and assumptions employed were kept secret. 

“This is ludicrous,” Heywood Sanders, a professor of public policy at the University of Texas San Antonio told Gazette Packet reporter Michael Pope. “It’s simply not plausible.”

An area of economics that has examined the return on public financing of professional sports facilities has concluded it rarely if ever pays off.

Neil deMause, co-author of the book “Field of Schemes,” points to decades of research he says show these kinds of deals are bad for taxpayers. Team owners rake in profits, he said, and some businesses stand to benefit. But, he says, in example after example the rich get richer while the public gets fleeced. “I guess it’s possible that Alexandria [would] be different from all of the other hundreds of times this has happened since the 1980s,” deMause told Pope in an interview earlier this month. “But I would not put my money or Virginia taxpayer money on it.” He could not cite any example of a good result for the public.

The proposal also faced significant opposition from Alexandria residents.

Andrew Macdonald, former Vice Mayor who co-founded the opposition group Coalition to Stop the Arena at Potomac Yard, noted earlier that other proposals will come forward. “I think there are other development options that will result in far fewer environmental and quality of life impacts, and create a more sustainable revenue stream,” he said in an earlier interview with Gazette Packet reporter James Libresco. “There needs to be development in Potomac Yard, but a sportsplex is simply not suitable for Alexandria.” 

Results from a recent poll of Del Ray, Hume Springs, Lynhaven and Rosemont residents conducted jointly by the neighborhood civic associations which had 496 respondents found that 58 percent oppose the project, 29 percent support it, 12 percent have mixed opinions and less than 1 percent are unsure. 

“[Arena proponents] failed to prove this was a good public investment,” said Macdonald. “The city failed to engage the community from the start in a meaningful way, preferring instead to ignore public concerns and hire lobbyists (using our local tax dollars) to push the bill through the General Assembly.”

There’s plenty of blame to go around, but Sen. Scott Surovell, majority leader of the Virginia Senate, says the Governor’s failure to include stakeholders is where the deal went awry.

“The failure of this deal falls squarely on Governor Glenn Youngkin,” said Surovell. “This isn’t a Carlyle deal. The Legislature is a co-equal branch of government, and key members – Republicans and Democrats alike – were not included at every stage of the process. By the time the deal was brought to the table it was essentially non-negotiable, even for myself as the bill’s sponsor.

“The arena proposal failed because the Governor failed to include the stakeholders in state government who would have to deal with the consequences of this decision long after he left office with a photo opp breaking dirt.”