Greater Greater Washington

Will a DC United stadium be worth it?

Last week, we looked at how much DC taxpayers have paid to build and maintain Nationals Park. What are they getting in return? And will the city's deal to build a new soccer stadium be worth it?


The proposed DC United stadium.

In 2003, baseball boosters hired consulting firm Brailsford & Dunlavey to estimate the benefits of a Major League Baseball team in DC. Later, they would help manage the design and construction of the stadium. They determined that the construction of a $272 million stadium would result in $5 million in one-time tax revenues. The stadium cost over twice as much, so if the same ratio holds, it produced $12.9 million in tax benefits.

But supporters also cite external benefits. Tourism would create jobs and tax revenue. Baseball and the stadium would be a cultural amenity, attracting concerts and other events. The stadium would also spur the redevelopment of Capitol Riverfront. But there just isn't any hard evidence that Nationals Park has led to any development.

The stadium didn't cause development

There were many other factors at play in Near Southeast that led to redevelopment, much of which occurred before the stadium site was selected. If the stadium truly were a catalyst, development would have occurred around it first, rather than scattered throughout the neighborhood.

On the 10 squares immediately adjacent to the stadium, only 2 smaller projects have broken ground: the Camden South Capitol apartment complex across the street and 55 M Street, whose main tenant DDOT moved there because of its proximity to the US Department of Transportation. Meanwhile, NoMa, where the stadium was originally supposed to be built, has experienced rapid development without one.

Research shows that stadiums do not spur development. In a survey of the economics of sports facilities, Siegfried and Zimbalist concluded that there is "no statistically significant positive correlation between sports facility construction and economic development." Even Brailsford & Dunlavey didn't assign a value to it at Nationals Park.

The stadium doesn't produce a lot of tax revenue

The stadium also generates some tax revenue, through hotel and restaurant taxes and income taxes from newly created jobs. Councilmember Jack Evans estimates the stadium produces up to $500,000 in tax revenue per game during the playoffs, which would require visitors to spend at least $3.5 million at hotels and restaurants.

Where Evans got that number is anyone's guess, but economists with the Kansas City Federal Reserve estimate that the average imported tax revenue for a MLB stadium is about $1.5 million a year. However, that includes tickets and parking, which we've already counted, and it assumes that 20% of fans are from outside of the metro area. But 85% of Nationals fans come from Virginia and Maryland.

Assuming there are 2.5 million tickets sold each year and each ticketholder spends an average of $33 outside the stadium, we get a total imported tax of ~$5.6 million. It's worth noting that that number is probably higher than it should be, because much of it represents hotel spending, but fans from Northern Virginia or Maryland are unlikely to rent a hotel room. It's also higher than Brailsford & Dunlavey's $4.7 million estimate.

The same study estimates the job creation and income tax benefits of a MLB stadium at $1.365 million a year. It's possible that DC's income tax take would be lower since, like its fan base, its employees are more likely to live in Virginia or Maryland.

Brailsford & Dunlavey also estimated that the city would collect $4.2 million in increased business franchise taxes from baseball-related activities, though it's unclear how they determined this and the city does not report it separately.

Is Nationals Park a cultural asset?

Stadium supporters say that venues and sports teams provide a significant cultural amenity in the form of entertainment, local unity, prestige, and civic pride. Having a sports team makes people happy, and a city has a legitimate role in helping people to be happy and making a city appealing. But what is this worth?

A 2001 study of the Pittsburgh Penguins' contributions to the public good tried to answer that question and put the value of the team between $4.20 and $6.94 per household. If we multiply $6.94 by DC's 260,136 households, we get a value of $1.81 million in public good benefits.

That value is for the team alone, not the stadium, which may add some cultural benefits by hosting concerts, weddings, and other events. So I'll round up to $2 million a year.

DC also spent $82.6 million for transportation infrastructure to support Nationals Park, but it has limited value outside of baseball. A second, $20 million entrance for the Navy Yard Metro station is nice, but is probably unnecessary outside of event days. Most of the $27 million spent on rebuilding the Frederick Douglass Bridge next to the stadium was to improve its aesthetics. But DDOT also resurfaced the bridge, did structural work, and added new streetlights and guardrails, extending its life and usefulness to travelers.

Therefore, in return for their investment, DC taxpayers get ~$11.2 million in jobs and tax benefits, another ~$2 million in public goods benefits, some development benefits, and a grab-bag of transportation improvements.

It's possible that the team's future success will lead to greater attendance and thus greater revenue to offset the stadium debt. But for now, DC is out $127.9 million and losing at least another $10.735 million every year on its stadium investment. Even Brailsford & Dunleavy's estimate, which stadium boosters used to justify the stadium, predicted the 30-year net present value of the stadium, which cost $670 million, to be just $526 million.

What about DC United?

This brings us back to DC United and DC's plan to swap the Reeves Center for land to build the team a new soccer stadium. Unlike Nationals Park, the DC United deal could be good.

DC pays $150 million for land and infrastructure improvements. DC United pays the same amount to build the stadium. If the team makes a high enough profit, then the city would get a cut. Much of the land is unused right now, so there would be less use of eminent domain.

But it's hard to see DC United Stadium providing as much in external benefits that Nationals Park does.

Major League Soccer just isn't as popular as baseball and it plays fewer games, so per team attendance is about one-eighth as high as baseball's. Assuming that visitors spend the same amount of money, the amount of expected tax revenue falls to just $2.9 million. That includes public good of the team, even though it's not a given that DC United would leave the DC area if they didn't get a stadium. It also includes sales taxes, even though there doesn't appear to be any plans for a special soccer tax.

The rent DC United will pay will be $1 a year, though DC United will pay up to $6 million a year in property tax, and any sales tax collected at the stadium could be paid back to DC United if they don't make a "reasonable profit."

This is not quite the same as guaranteeing DC United's profit, as the DC Fiscal Policy Institute has been saying, but it is a pretty sweet deal, and one that any other business in the city would love to have.

Meanwhile, DC is also contributing about twice as much for its stadium as the average MLS city does. As DCFPI points out, there is no cap on the land acquisition costs, so the price could easily go up, just as it did with the baseball stadium. The whole thing will be funded by complicated land swaps that lack transparency or the assurance that DC is getting the best possible price for its assets.

Though the costs of this stadium deal will be far lower, it is likely the benefits will be too. Those benefits would need to amount to at least $9.5 million a year to cover the $150 million price tag. In order for that to happen, the $150 million price to DC would have to hold steady and DC United would need to be successful enough to pay its entire property tax and generate revenue per attendee similar to the Nationals, while paying DC an additional $600,000 from profit sharing and covering its own security.

While DC stands to benefit if soccer does well, they're at risk to lose money if soccer does poorly. There may be a deal out there that can make breaking even a likelihood, but so far, this doesn't appear to be it.

David Cranor is an operations engineer. A former Peace Corps Volunteer and former Texan (where he wrote for the Daily Texan), he's lived in the DC area since 1997. David is a cycling advocate who serves on the Bicycle Advisory Committee for DC.  

Comments

Add a comment »

Incomplete analysis, re-do.

1) No accounting for residual value of the stadium.
2) No mention of the 10% restaurant tax revenue generated as a direct result of the stadium (i.e. Justin's, Gordon Biersh, Bluejacket-- when it opens).
3) No mention of the expanded tax base from stadium-related employment (the stadium created hundreds of direct Nationals-related jobs).
4) No mention of the jobs created from construction of the stadium
5) No mention of the number of years for the useful life of the stadium (the long the stadium is used, the more tax revenue it will generate).

by 202_cyclist on Sep 3, 2013 2:35 pm • linkreport

Another one of these, again?

by Scoot on Sep 3, 2013 2:40 pm • linkreport

The stadium didn't cause development

This point right there kills the validity of this post. You can argue until you're blue in the face that there were things "in the pipeline." Notice how none of them actually came out of the pipeline until about 2005-06 when baseball came around in 2004.

We already knew that you were going to give a thumbs down to the DC United stadium using the same slanted analysis as before. You made the same arguments that most idealogical stadium opponents made.

by Cavan on Sep 3, 2013 2:46 pm • linkreport

"No mention of the jobs created from construction of the stadium"

Sigh. ANY use of the funds would have created jobs. You can't count those as a benefit. Unless you want to add those to the cost side on top of the $$. Its a wash.

"Notice how none of them actually came out of the pipeline until about 2005-06 when baseball came around in 2004."

it actually takes time for projects to be completed. USDOT was completed in 2006. After years in the pipeline. Do you attribute that to the ballpark?

"You made the same arguments that most idealogical stadium opponents made."

what kinds of arguments do non-ideological opponents make? Do you consider all stadium opponents to be ipso facto ideological?

by MStreetDenizen on Sep 3, 2013 2:53 pm • linkreport

Wondering if a stadium is "worth it" based on whether the city will make back its money is as stupid as wondering whether a new tv will be "worth it" based on whether you can pay back its cost by charging your friends to watch movies. The point isnt to make money. The point is to be able to watch tv.

by Kristophanes on Sep 3, 2013 2:55 pm • linkreport

6) This post also fails to mention revenue from non-baseball related events held at Nationals Park.

by 202_cyclist on Sep 3, 2013 3:00 pm • linkreport

"The point is to be able to watch tv."

If folks want to watch the Nats, they can pay for tickets, which can give the Nats sufficient profit to pay for their own stadium. Its how movie theaters, restaurants, and most other things we use are paid for. The argument for public funding has to at a minimum show that there is a benefit on top of that.

by MStreetDenizen on Sep 3, 2013 3:01 pm • linkreport

Kristophenes, that's the point of the Pittsburgh Penguins study. As the old add said, "It's in there".

by David C on Sep 3, 2013 3:07 pm • linkreport

"1) No accounting for residual value of the stadium."

Cities always have to pay to have the stadium knocked down.

"2) No mention of the 10% restaurant tax revenue generated as a direct result of the stadium (i.e. Justin's, Gordon Biersh, Bluejacket-- when it opens)."

It's in the imported tax of ~$5.6 million

"3) No mention of the expanded tax base from stadium-related employment (the stadium created hundreds of direct Nationals-related jobs)."

It's in the job creation and income tax benefits of a MLB stadium at $1.365 million a year

"4) No mention of the jobs created from construction of the stadium"

It's at the end of the 2nd paragraph

"5) No mention of the number of years for the useful life of the stadium (the long the stadium is used, the more tax revenue it will generate)."

I'm using the standard 30 year time span. What will the stadium be worth after 30 years without further investment? And what is the discounted value of that today?

"6) This post also fails to mention revenue from non-baseball related events held at Nationals Park."

Possibly true, though I suspect that DC is reporting it in stadium sales tax. But even if not that amount is surely trivial as you noted before.

by David C on Sep 3, 2013 3:12 pm • linkreport

Cavan, if you have an argument to make based on data or facts I'd love to hear it.

by David C on Sep 3, 2013 3:13 pm • linkreport

David:

The Federal Reserve study is from 2001 (i.e. more than a decade old). The annual $1.5M stadium-related income tax should be adjusted for inflation, both from 2001 until 2013 and from 2013 going forward for the useful life of the stadium.

It also looks like this post completely ignores the stadium concession taxes, which were over $9.5M in 2012. Assuming one percent annual growth in stadium concession tax revenue, this is approximately $330M during the 23 year lease of the stadium (more revenue of course for the District if Nationals Park is used beyond 23 years).

There also does not appear to be any mention of the $1 per ticket tax surcharge for any tickets beyond 2.5M annual tickets at the stadium.

by 202_cyclist on Sep 3, 2013 3:30 pm • linkreport

FedEx field has done wonders for Prince George's county. Wondrous traffic on the beltway from NoVA and Montgomery county on game days mostly. That's about it. Granted, the team built it, but non-attending locals get the negative externalities. And there haven't been any positive externalities other than that big workout place, have there? Free tickets for the local megachurch pastors or something?

by Greenbelt on Sep 3, 2013 3:45 pm • linkreport

There were many other factors at play in Near Southeast that led to redevelopment, much of which occurred before the stadium site was selected.

You can argue that much of the redevelopment was planned/in some sort of conceptual state/"in the pipeline" before the stadium site was selected, but you cannot honestly say that it occurred before then. And as we all know, just because there are plans out there doesn't mean something will move forward.

Case in point: redevelopment plans for Florida Rock were first floated in 1998. So one could claim that this was already "in the pipeline." But that does not change the fact that pretty much nothing happened with the site until after Nats Park was up and running. You see a lot of this.

If the stadium truly were a catalyst, development would have occurred around it first, rather than scattered throughout the neighborhood.

This would be valid if people were arguing that Nats Park was the only catalyst. No one is saying that. Obviously, there have been/are/will continue to be multiple factors.

On the 10 squares immediately adjacent to the stadium, only 2 smaller projects have broken ground:

Does Florida Rock not count as breaking ground?

In any case, using immediate adjacency shrinks the sample size very low, where particularities of the property ownership/zoning/etc. have an outsized effect. A macro trend like neighborhood redevelopment requires looking at more than the closest 10 properties.

economists with the Kansas City Federal Reserve estimate that the average imported tax revenue for a MLB stadium is about $1.5 million a year.

DC is a higher cost-of-living jurisdiction than all but a couple of other markets. Maybe all but NYC. One should expect the DC figure to be significantly higher.

A 2001 study of the Pittsburgh Penguins' contributions to the public good tried to answer that question and put the value of the team between $4.20 and $6.94 per household. If we multiply $6.94 by DC's 260,136 households, we get a value of $1.81 million in public good benefits.

Hockey is far less popular than baseball, so one should expect that the public good benefits of baseball would be higher, as it is a more highly valued activity.

by Dizzy on Sep 3, 2013 3:49 pm • linkreport

202,

If you'd like to pull all of the numbers into 2013 dollars we can do that, but considering I'd have to pull the ~$700M cost of the stadium from 2004 dollars to today, that will only make the stadium look worse.

by David C on Sep 3, 2013 3:49 pm • linkreport

There also does not appear to be any mention of the $1 per ticket tax surcharge for any tickets beyond 2.5M annual tickets at the stadium.

Because there haven't been any.

by David C on Sep 3, 2013 3:50 pm • linkreport

It also looks like this post completely ignores the stadium concession taxes, which were over $9.5M in 2012.

Nope. That was in the last post and carried forward to this one.

by David C on Sep 3, 2013 3:50 pm • linkreport

Dizzy:

"In any case, using immediate adjacency shrinks the sample size very low, where particularities of the property ownership/zoning/etc. have an outsized effect. A macro trend like neighborhood redevelopment requires looking at more than the closest 10 properties."

Exactly. When it suited them, opponents of the stadium in David's previous post said that Capitol Riverfront/Navy Yard really should be counted as part of Capitol Hill, so there isn't too much consistency here. I certainly would not expect a fair analysis.

by 202_cyclist on Sep 3, 2013 3:55 pm • linkreport

@Dizzy--

Florida Rock does not count. The industrial crap has been cleared from the site, but nothing has broken ground. No shovels in the gravel yet, and in fact the liquor board is considering granting a Bullpen/Fairgrounds-like liquor license for a temporary entertainment venue there. I.e., if anything breaks ground there anytime soon, I'd be shocked.

However, Ballpark Square, on a different directly-adjacent parcel, is supposed to break ground this fall. Here's hoping it happens: http://www2.hickokcole.com/portfolios/ballpark-square/

by JES on Sep 3, 2013 3:56 pm • linkreport

David C:
"Cities always have to pay to have the stadium knocked down."

Do you have evidence for this or are we just suppose to believe it?

"There also does not appear to be any mention of the $1 per ticket tax surcharge for any tickets beyond 2.5M annual tickets at the stadium.

Because there haven't been any."

Not yet, but as the population of the DC region grows from 5.5M to 7M, it isn't unrealistic to expect that the Nationals will pay this tax in during some seasons.

by 202_cyclist on Sep 3, 2013 3:57 pm • linkreport

@JES:
The redevelopment of this building (http://www.jdland.com/dc/index.cfm/3835/Update-on-the-Planned-Demise-of-Spooky-Building-213/) is currently underway. This is almost directly across the street from the stadium.

by 202_cyclist on Sep 3, 2013 4:01 pm • linkreport

"Exactly. When it suited them, opponents of the stadium in David's previous post said that Capitol Riverfront/Navy Yard really should be counted as part of Capitol Hill, so there isn't too much consistency here. I certainly would not expect a fair analysis."

Richard Layman, IIRC, mentioned that Cap Riverfront had previously been considered part of Capitol Hill. I dont recall the exact point, but was under the impression it was to reinforce that proximity to Capital Hill was a driving force of development. Which it was. I don't think he meant to arbitrarily indicate the boundaries of what counted.

Geographically, there is no reason to completley exclude the whole are east to 8th street. but one needs to recognize that with the tearing down of the public housing, the move of NavSea and USDOT (with contractors following behind), with the shortage (well documented on GGW) of housing close to metro stations in DC (and navy yard metro is a particularly close to the CBD) large scale development was coming anyway. Especially residential (and related retail)

by MStreetDenizen on Sep 3, 2013 4:04 pm • linkreport

@202, I live there. I'm aware. However, the very article you link says "that's a good ways off--in the meantime there will continue to be parking on the site."

Tearing stuff down doesn't translate to immediate development. One doesn't need to look very far around here to see swaths of vacant land that have been empty for over half a decade.

Don't get me wrong, I can't wait for stuff to be built down here, but the reality is that some of these properties won't come to fruition for probably another decade, 15 years after the stadium was built. It's awfully hard to tie that "expedited timeline" to the ballpark.

(FWIW, I'm a ballpark supporter; it's the main reason we moved down there. But I'm also very hesitant to tie some of this development directly to the ballpark.)

by JES on Sep 3, 2013 4:05 pm • linkreport

"The redevelopment of this building (http://www.jdland.com/dc/index.cfm/3835/Update-on-the-Planned-Demise-of-Spooky-Building-213/) is currently underway. This is almost directly across the street from the stadium. "

Its also exactly across the street from A. The metro entrance and B. USDOT

by MStreetDenizen on Sep 3, 2013 4:07 pm • linkreport

"If the stadium truly were a catalyst, development would have occurred around it first, rather than scattered throughout the neighborhood."

I disagree. A catalyst (stadium, employment center, metro station, whatever) can cause development throughout a neighborhood. Which particular plots the development occurs on probably depends on other factors, like what the surrounding parcels are currently used for, whether the owners are willing to sell and at what price, the remediation required before developing the land, the topography and size of the parcels, etc.

by sbc on Sep 3, 2013 4:13 pm • linkreport

JES:
"(FWIW, I'm a ballpark supporter; it's the main reason we moved down there. But I'm also very hesitant to tie some of this development directly to the ballpark.)"

Agreed but we also had the great recession in 2008-09, which although it largely spared the DC region, did undoubtedly delay some developments, especially in an up & coming area like Capitol Riverfront.

by 202_cyclist on Sep 3, 2013 4:15 pm • linkreport

MStreetDenizen:
"Its also exactly across the street from A. The metro entrance and B. USDOT"

The same metro entrance that David C. cites as a cost of the stadium?

by 202_cyclist on Sep 3, 2013 4:16 pm • linkreport

202:

The older metro entrance might not be directly across the street from this site, but it's close enough (One's on half St, one's on NJ Ave... two blocks apart). Point being, the new entrance isn't necessary to be able to say that this site is "incredibly close" to the metro entrance.

by JES on Sep 3, 2013 4:25 pm • linkreport

202

no, the old entrance.

Its exactly across the stret from the old entrance. AFAICT the only parcels any closer to the old entrance are the one direclty on top of it, and the one (built on before the ballpark) east of NJ from it.

I am confused. Have you actually spent much time around the intersection of M Street and NJ Avenue? You seem unfamiliar with the details of it.

by MStreetDenizen on Sep 3, 2013 4:31 pm • linkreport

@JES

Florida Rock does not count. The industrial crap has been cleared from the site, but nothing has broken ground. No shovels in the gravel yet, and in fact the liquor board is considering granting a Bullpen/Fairgrounds-like liquor license for a temporary entertainment venue there. I.e., if anything breaks ground there anytime soon, I'd be shocked.

Different terminologies, then - I consider physical remediation/clearing of a site to count as 'breaking ground,' even if it is not yet work on the planned permanent structure. When they started doing utility relocation for the Silver Line, I considered that breaking ground, for instance. But that's semantics. If the Florida Rock site does end up gaining a revenue (and entertainment!) generating temporary use in the interim, that will be a positive.

@David C

It also looks like this post completely ignores the stadium concession taxes, which were over $9.5M in 2012.

Nope. That was in the last post and carried forward to this one.

It would help if you had a single table that showed all of the credits and debits you're taking into account.

by Dizzy on Sep 3, 2013 4:31 pm • linkreport

@Dizzy

I agree that I'd rather have a fairgrounds clone than an empty lot there, but the fact that they're applying for a permit for that instead of actually starting to build is disheartening to me. The block just north of the park where the fairgrounds currently sits has been cleared for years, yet still nothing permanent even remotely close to being built.

I don't consider "breaking ground" to include site prep. Site prep means that something will EVENTUALLY be built. Breaking ground means that something is BEING built. Very important distinction, and after seeing deadlines come and go constantly down here, I've stopped getting remotely excited about anything until I see a bulldozer start hollowing out underground parking.

by JES on Sep 3, 2013 4:45 pm • linkreport

Cavan -- I don't understand why you think that 2 years is a reasonable time frame for turning a project around. The projects that broke ground between 2004 and 2006 had virtually nothing to do with baseball, and had been in the works for years. When you take into account land acquisition, design, what developers call entitlement, permitting -- all before construction, it's a 4-6 year process. Plus construction.

by Richard Layman on Sep 3, 2013 4:50 pm • linkreport

Greenbelt -- virtually all of the money that PG County "makes" from FedEx Field comes from the ticket tax. No other real revenues.

by Richard Layman on Sep 3, 2013 4:52 pm • linkreport

202_cyclist: the better question for you is what evidence do you have that there is residual value in a stadium after 30 years? ALthough I agree with you that there is likely to be quite a bit, because a baseball stadium post-1970s-up to Camden Yards, had no real value after its useful life was over, but now it's likely that the Camden Yards and later stadiums could last at least for a few decades. I don't know if they will last as long as Wrigley Field or Fenway Park.

But it's probably fair to say that the stadium has a 50-60 year useful life at least, although this will require further investment to maintain.

2. WRT soccer. Again, compared to football and arena-based sports (hockey, basketball), maybe the useful life of the event structure is longer. I think it's fair to say it probably is. But as you saw with the Penguins Hill Arena, Cap Centre, and many other equivalents (now the Sacramento Arena), those structures typically don't have a more than 30 year useful life.

3. Not that you care but this is a problem with convention centers too...

by Richard Layman on Sep 3, 2013 4:57 pm • linkreport

Dizzy -- I agree with others. Site prep/clearing-demolition is often absolutely not "breaking ground" which means commencing with a project. Lots can be empty for a decade or more.

by Richard Layman on Sep 3, 2013 5:01 pm • linkreport

@Richard Layman

One of the big issues with the facilities you cited is that they were done on the cheap and located in very inconvenient, out of the way locations that had nothing to recommend them except the cheap cost of land and seas of surface parking, which is no longer en vogue. Very true for the Cap Centre and Arco Arena in Sacramento. Compare that to Verizon or the United Center, which will be going strong long past their 30th birthdays (to say nothing of something like MSG).

by Dizzy on Sep 3, 2013 5:04 pm • linkreport

It's interesting to see Arco Arena discussed in these comments. Downtown Sacramento, as much as I like Sacramento, has long been sluggish. Since the new downtown arena has been announced earlier this year, however, five large properties have either been sold or are close to being sold.

http://www.sacbee.com/2013/08/28/5686600/arena-plans-spur-talk-of-sales.html

by 202_cyclist on Sep 3, 2013 5:11 pm • linkreport

using immediate adjacency shrinks the sample size very low, where particularities of the property ownership/zoning/etc. have an outsized effect. A macro trend like neighborhood redevelopment requires looking at more than the closest 10 properties

It doesn't get much better. But you'd agree that we should weight it so that the closest properties carry the most weight right? How far should we go? How should we compare a block adjacent to the stadium and one 0.5 miles away?

by David C on Sep 3, 2013 5:11 pm • linkreport

Isn't this analysis incomplete without an accounting of the costs and benefits of the other components of the deal, namely the redevelopment of the Reves Center?

by mrewers on Sep 3, 2013 5:15 pm • linkreport

There seems to be a lot of talkling past each other. I don't think David C is saying that a stadium has no positive effects. or that it has no cultural value. What he is doing is to put forward the economic case. So far, the economic argument is very weak. We can still build a stadium, but lets at least be honest about the decision. If

It clear that a stadium is associated with new development. But its wrong to conclude that the stadium is the cause of development. With a stadium comes all sorts of money and effort to get things done that spurs development. People also fail to consider alternative returns on investment.

If we had bulldozed a chunk of SE and invested the same amount of money to build something else, I am pretty sure that there would be a lot of development, and perhaps more income to the city.

by SJE on Sep 3, 2013 5:17 pm • linkreport

Do you have evidence for this or are we just suppose to believe it?

Why not both. Irving had to knock Texas stadium down. Pontiac sold the silver dome for less than the cost of a DC row house. Memorial stadium in Baltmore is another example.

Not yet, but as the population of the DC region grows from 5.5M to 7M, it isn't unrealistic to expect that the Nationals will pay this tax in during some seasons.

Actually it is. Even if the Nats sold out every game all year they could only get 3,392,928 fans into the stadium (not counting playoffs or games that are never rescheduled). Even at the maximum, DC would only earn $900,000 extra dollars in rent and that's only if EVERY ticket is sold at its regular price (discounted tickets don't count, even if the discount is only $1).

by David C on Sep 3, 2013 5:17 pm • linkreport

It would help if you had a single table that showed all of the credits and debits you're taking into account.

Fair enough. This post was originally much much longer. But we had to trim it down. Some of the clarity may have been lost. The original post had the numbers pulled in to the opening paragraph.

by David C on Sep 3, 2013 5:21 pm • linkreport

"Isn't this analysis incomplete without an accounting of the costs and benefits of the other components of the deal, namely the redevelopment of the Reves Center? "

no its not, because the redevelopment of Reeves Center could be done without building the soccer stadium. And anyway, Dave C is analyzing Nats Park, not the Soccer stadium. I think.

Whoever said this needs to be done in a spreadsheet was right. it all gets very tangled up in narrative.

by MStreetDenizen on Sep 3, 2013 5:22 pm • linkreport

Interesting debate and post.

@ Richard Layman on how long the soccer stadium would last...

My worry is soccer is growing in popularity. It is by far the sport most played by young kids in the USA. As those kids grow up to buy their own tickets and the US Mens team gets better (they are 3 games away from equaling the most wins ever in a row for a mens national team, which would be an amazing feat (hard to win a bunch of games in a row since there are so many ties in soccer)) popularity should climb. i'm not sure how it should be measured, but mens pro soccer has grown dramatically in the USA over the last 10 years.

I don't think it is realistic to plan on a DC team playing in such a small stadium 33 years from now (figuring it won't open for 3 more years at least). I fear 15-20 years from now the tea will be threatening to move unless we build a bigger stadium.

I would be very curious to hear what DC United's long term strategy and planning are. How will DC be able to lock them into a 30 year contract?

by turtleshell on Sep 3, 2013 5:41 pm • linkreport

turtleshell -- hopefully you are right. But then, I went to a Detroit Express game with my brother, who played soccer, I didn't, sometime in the 1970s.

There seems to be some kind of disconnect in the US between playing vs. watching.

Dizzy -- no argument from me about in-city and transit-centric arenas vs. in-city and car-centric arenas vs. out of city and car centric arenas. But there are many in city arenas that reached their useful life. if you recall, in the previous thread I gave you props for your points about urban design.

There are only a few cities that really have a transit-centric capability, DC fortunately is one of them.

And we are lucky we're doing mixed use, compact development. So we've been fortunate with both Verizon Center and now the Baseball Stadium, by comparison to many other places.

E.g., it's not like the area around either Yankee Stadium or Willets Field is particularly awesome and those stations have railroad and/or subway service both.

But as far as arenas go, they age, they seem to die pretty quickly, at least compared to a house built in the 1880s.

Not just in PGH, in Seattle, and if I remember correctly, in many other places. And it was not so much about car centric locations, as it was other factors.

by Richard Layman on Sep 3, 2013 5:56 pm • linkreport

Look, get over it. The stadium is GOING TO HAPPEN, OK? Your B.S. walks and money talks. See?

by Look See on Sep 3, 2013 6:42 pm • linkreport

Whoever said this needs to be done in a spreadsheet was right. it all gets very tangled up in narrative.

That's fair. Let me simplify. I treated it like three separate items: upfront, transportation and annual.

Upfront
cost of stadium -$135 million
maintenance contingency -$5 million
Construction taxes $12.9 million
SUBTOTAL -$127.9 million

Transportation
Metro entrance -$20 million
Douglass Bridge -$27 million
Streetscape work -$25.6 million
SUBTOTAL -$82.6 million

Annual
Debt Service -$38 million
Maintenance -$1.5 million
Baseball sales taxes $10.1 million
Imported tax revenue $5.6 million
Rent $5.5 million (rises by ~1.85% per year)
Franchise Tax revenue $4.2 million
Public Good $2 million
Income and sales tax $1.365 million
SUBTOTAL -$10.735 million per year

I didn't determine the value of the transportation improvements and kept the whole category separate. It's much more than $0, but much less than $82.6 million.

by David C on Sep 3, 2013 8:33 pm • linkreport

Whoops. Streetscape work should be $35.6 million

by David C on Sep 3, 2013 8:34 pm • linkreport

The larger picture is that DC spent it's stimulus money to enlarge the freeway into this area, maxed out it's municipal credit to pay for Nat's Park, will pay about another $1B to rebuild the Douglas bridge and do that oval racetrack thing here, and will swap property worth a lot for it's share of the DCU stadium. Including tax-exemptions we're blowing at least $4B on this strip of projects.

$4B would have bought a nice streetcar system which would not only have helped DC residents but encouraged tourism more. DC is not using it's public funds and assets the way progressive cities do.

Unfortunately there aren't VIP skyboxes for DC council members on streetcars. And building them doesn't funnel money to powerful local developers and firms.

Just like people, a city has a certain amount of credit and assets and has to make priorities. Ours are dumb growth.

by Tom Coumaris on Sep 4, 2013 12:10 am • linkreport

If the stadium truly were a catalyst, development would have occurred around it first, rather than scattered throughout the neighborhood.

Doesn't really follow. Nobody wants to build high-priced condos right next to a stadium -- thus, all those surface parking lots -- Moreover, the Nats forced the city to build those aboveground garages, right where entertainment businesses would have loved to locate. That was a significant drag on the neighborhood. Other businesses - located further from the stadium -- beyond all the parking for those suburban visitors and thus cut-off from their out-of-state money -- have been waiting on residential development.

Now -- about soccer -- if you're claiming that the baseball stadium can't get credit for projects that were being planned prior to the stadium's construction -- you're going to have to shelve that line of attack with respect to Buzzards' Point. Any development will be tied to the stadium project, because nothing is going to happen there without it. Even the streetcar line, if it is built, will be due in part to the stadium.

Know this about soccer -- the economics are very different from other sports. Soccer fans are more likely to spend money in the neighborhood, for one thing, when they get a neighborhood that has commercial establishments. Moreover, there will be more tourism involved, because of international games and competitions.

Also -- it's specious to compare the public costs of the glorified bleachers put up in flyover country. United intend to build a much better facility than the ones in Texas, for example. Of course, the land costs are necessarily higher in DC than near the interstates in flyover country.

As the cost structure will be larger, the benefits will also be greater. The team will ensure there will be development, because they will play a part in that. And, the stadium will likely host a lot of college tournaments that will bring in a lot of hotel traffic -- perhaps even major youth tournaments. The likely future home of the Soccer Hall of Fame may provide additional tourism.

Will the project ultimately turn a profit for the city? Probably not, but few public works projects are measured that way.

by Fischy (Ed F.) on Sep 4, 2013 12:12 am • linkreport

You are going to lose this one too. The arguments do not hold water with all the items you do not factor in.

Compared to much the rest of the nation, DC is fairly well off, these stadiums do not get any cheaper to built. Do it now or it will cost even more later.

by Ray B on Sep 4, 2013 12:21 am • linkreport

DC is somewhat unique in this in that questions like development of a given area really do matter.

For most places, the broader market will determine if a condo building gets built. But because DC only controls a small portion of the larger metro, it matters alot whether it ends up in DC itself, or somewhere else.

So if the stadium spurred construction that otherwise would have happened in Arlington, then yes, its a good deal. If instead it spurred construction that would have happened in some other DC neighborhood, then its probably a wash.

by TomA on Sep 4, 2013 8:47 am • linkreport

This analysis makes the case the stadium's ROI is debatable. That was clear going into this.

But I'm fine with that.

Supporters will say the stadium delivers a public good. It's self-justifying for its intangibles.

That's an argument that can be used to support other public projects. For instance, I don't want see the District relocate the MLK central library to a less accessible location so it can profit off the downtown real estate. If the city is rich enough for sports stadiums, it's certainly rich enough to give its central library, and the library system as a whole, the support it deserves.

by kob on Sep 4, 2013 9:25 am • linkreport

I don't want see the District relocate the MLK central library to a less accessible location so it can profit off the downtown real estate. If the city is rich enough for sports stadiums, it's certainly rich enough to give its central library, and the library system as a whole, the support it deserves.

Not sure the central library would be relocated because of profit motive so much as because it's basically a services clearinghouse for homeless people. Let's move it to wherever it can deliver services most efficiently. Maybe Reservation 13 in Hilleast.

by oboe on Sep 4, 2013 10:02 am • linkreport

"These stadiums will not get any cheaper to build": actually, if we force the team to build them, they are a lot cheaper.

The specialized facilities junket merely protects legacy pro sports from competition from other sports that people watch and play. We subsidize horse racing, baseball and football. We give more subsidies to baseball versus basketball or soccer. But more adults play soccer or basketball. We are making sport into something you watch, instead of doing.

Why does the city have to raise money for parks, basketball courts, and kids sports leagues, and can't find the money and will to give kids more time for play at school, but seems eager to give away hundreds of millions to a pro sport team?

It just seems nuts.

by SJE on Sep 4, 2013 10:08 am • linkreport

Doesn't really follow. Nobody wants to build high-priced condos right next to a stadium...

It absolutely follows. First of all, the stadium-related development would naturally be more likely to be across the street than 5 blocks away or in Trenton, NJ. Second, you follow it up with all kinds of reasons why the stadium has not resulted in development and possibly even thwarted it. You're making the case that the stadium has been a detriment to development.

Any development will be tied to the stadium project, because nothing is going to happen there without it.

I don't think there is any reason to believe this. Development will likely be tied to the stadium, but that area would definitely not sit fallow once it was made available.

And, the stadium will likely host a lot of college tournaments that will bring in a lot of hotel traffic -- perhaps even major youth tournaments.

How much of this other business do other MLS stadiums bring in?

Will the project ultimately turn a profit for the city? Probably not, but few public works projects are measured that way.

No, but they should all be measure as being worth more than they cost. Building things that are worth less than they cost is bad public policy, especially when the losers are taxpayers and the winners are multi-millionaires.

by David C on Sep 4, 2013 10:55 am • linkreport

The arguments do not hold water with all the items you do not factor in.

For example?

by David C on Sep 4, 2013 10:55 am • linkreport

$4B would have bought a nice streetcar system which would not only have helped DC residents but encouraged tourism more. DC is not using its public funds and assets the way progressive cities do.
This is the most financially irresponsible statement that has been made in this blog. A street car system cannot and will not generate positive revenue flow to the District – maybe in the 1940’s but not now.

Many do not know; D.C. has tourist buses that does it share to entertain tourists. Most importantly, the city pays $30 million a year to maintain the Connector Bus line which is currently in the red. The Connector Bus line has increased its fare to offset the annual lost in revenue. And, what can a trolley street car do…but cause more financial drain on the city and the residents?

Tired of being raped- this street car folly is a cash cow for U.S. House Representative members who are providing commerce and jobs to their voting districts…that is plain and simple.

And, for anyone in the District, Maryland or Virginia to support such under the table development [street car] is a provocateur.

Calvin H. Gurley

by Calvin H. Gurley on Sep 4, 2013 11:00 am • linkreport

oboe -- what I want to write in response to your point about MLK Library would end up with the "comment deleted due to a violation of website policy". It's horrid to say that all MLK does is serve homeless populations. That's an issue sure, and I'd argue that it needs to be addressed. But there are a wide variety of reasons to have an improved library downtown, whether or not it is that particular building.

cf.

http://urbanplacesandspaces.blogspot.com/2013/09/the-central-library-planning-process-in.html

http://urbanplacesandspaces.blogspot.com/2013/09/a-follow-up-point-about-local-library.html

by Richard Layman on Sep 4, 2013 11:24 am • linkreport

Compared to much the rest of the nation, DC is fairly well off, these stadiums do not get any cheaper to built. Do it now or it will cost even more later.
by Ray B on Sep 4, 2013

The District like many struggling major cities must stay away from building stadiums…have we not learn our lesson? The only financially viable sports venue is Mr. Abe Pollin’s Verizon Center. However, every sport development needs financial help…and Pollin got some help from the Council and the Mayor.

From my last count, the National Stadium was approaching a price tag of about $735 million dollars in January of the year of its opening. I have not included the cost over-runs and emergency millions to get the stadium to open on time for opening day in the month of March.

This city is wasting money on prostitute developments and does not have anything to show for it in the end. The National’s Stadium (the Lerner family got over like fat rats), the 1,001 bedroom Marriott Hotel*, the foolish H Street Trolley streetcar system (will cost $1 billion before the first ride), financial perks and tax abatement for developers, Jack Evans’ alleged give away of a million dollar alley to George.Washington University – all this for big business.

And, the common people of the District are denied to have a fully operating D.C. General Hospital…a public hospital for residents.

*Marriott 1,001 bedroom hotel.

This hotel is dead and out of business before it opens!!! Folks put your investment in the Gaylord-Harbor Place resort. The Gaylord is kicking the D.C. Convention Centers behind – taking away high cost trade and professional show bookings. I did not wish to use Mayor Walter Washington’s name in a loss situation.

The Gaylord Resort-Harbor Place will have a casino(s) the Wynn and others coming soon and there is talks about Disney re-opening discussion on a theme park.

And, the best (no brainer plan) that our silly council members and mayor can come up with is an old, dried out H Street Trolley rail system to compete against Prince Georges County’s casino resort???

This City Council and this Mayor don’t know Jack about returns on financial investment or future financial planning.

Wake Up Trusting Citizens

Calvin H. Gurley

by Calvin H. Gurley on Sep 4, 2013 11:45 am • linkreport

@Calvin, so you're saying we should build a casino in Buzzard Point?

by mrewers on Sep 4, 2013 11:52 am • linkreport

@mrewers

Arguments for a casino in D.C. will arrive fast and furious once a casino opens at National Harbor.

Casinos are spreading like cancer in the U.S. Resistance is crumbling as lawmakers point to neighboring jurisdictions and say: Why should they get all the money?

When this issue pops here, and it will, it absolutely will, the GWW threads will be long .........

by kob on Sep 4, 2013 12:17 pm • linkreport

And, the stadium will likely host a lot of college tournaments that will bring in a lot of hotel traffic -- perhaps even major youth tournaments.

How much of this other business do other MLS stadiums bring in?

Very little, if at all.

It will be unique to DC. The NCAA and conference tournaments rotate among stadia. When it looked like there would be a stadium at Morgan Blvd. and U.Md. was firmly ensconced in the ACC, there was talk of moving the ACC tournament to DC permanently. I don't know what impact the move to the Big Ten will have on that plan, but you might still see the national championship (Final FOur) become a regular fixture here.

As for points I made about how the Nationals' garages have hurt development -- that's not an attack in stadiums generally -- just the mistakes that were made there in the rush to get it built and in the contract which allowed the Nationals to force the city to build those garages aboveground rather than taking more time to build below-ground parking. Chalk it up to learning from mistakes...

by Fischy (Ed F.) on Sep 4, 2013 12:31 pm • linkreport

@Fischy (Ed F.):

I inquired about this on the previous post about the Nationals stadium-- why can't that parking be utilized during days and times when thare are not Nationals games? DC could potentially earn revenue from this and it would also help reduce the amount of parking required for developments at surrounding parcels.

by 202_cyclist on Sep 4, 2013 12:59 pm • linkreport

@Calvin Gurley,

The District like many struggling major cities must stay away from building stadiums…have we not learn our lesson? The only financially viable sports venue is Mr. Abe Pollin’s Verizon Center.

So....the District is "struggling"?

I think most would disagree with you there.

And all major cities must stay away from building stadiums because the "only financially viable sports venue is Mr. Abe Pollin’s Verizon Center."

How lucky DC is to have landed literally the only viable sports venue in any city in the US.

To be fair, I think there are a lot of folks out there who think DC should emulate PG County. Fortunately--when looking at those who are actually DC residents--their numbers are shrinking.

by oboe on Sep 4, 2013 1:12 pm • linkreport

oboe -- what I want to write in response to your point about MLK Library would end up with the "comment deleted due to a violation of website policy". It's horrid to say that all MLK does is serve homeless populations.

Fair enough, obviously that was a bit strong, but I think DC needs to decide what exactly is the purpose of its libraries. In the past, the behavior of some of its patrons has been permitted to drive significantly curtail its use by DC residents as a library first and foremost. If we want MLK to be an actual library, we need to enforce standards of behavior.

http://greatergreaterwashington.org/post/15846/mlk-library-can-help-itself-by-helping-the-homeless/

http://voices.washingtonpost.com/rawfisher/2008/12/dc_libraries_decide_not_to_be.html

by oboe on Sep 4, 2013 1:27 pm • linkreport

“But there just isn't any hard evidence that Nationals Park has led to any development. “

I find this statement just patently silly. No one is claiming that every square foot developed at the Navy Yard was only because of the ballpark, but c’mon… it is pretty clear that the bulk developed since 2005 has.

Stadium deal at Navy Yard agreed to 12/04
Nats Stadium broke ground 5/06.
Completed 3/08.

Below are the 13 most obvious major ballpark developments, consisting of dozens of parcels of land at the Navy Yard and totaling 6 million sq/ft of since planned/built developed space. You will see none of them were bought before 2005.

Monument Realty
Bought 6 parcels in 2005 for 45 million
Inclusive of a 275K office building
320 unit apt building with retail (currently unstarted)
150 room hotel (currently unstarted)

909 Halfstreet
Bought for 29 million in 2007
400 unit apt building currently planned

Square 696
Home to towing company lot and car repair shop, the property was bought in 2007.
Plans call for 825K of office and retail

70 and 100 I street.
Bought in 2005, this was a 210 million dollar project with a combined 650 residential units and 42K sq/ft of retail. All delivered in 2008.

Onyx on First.
Land Bought in 2006, completed in 2009. 260 residential units

1111 New Jersey
Land Bought in 2005, Completed in 2008
220K sq/ft office

20 M
Bought in 2005, completed in 2007. 190K office

Square 699
Bought in 2005, First phase of 200 unit condo (velocity)
Opened in 2009, remaining two phases sold to Toll last year.

1015 Half Streeet
Bought in 2006
Construction started in 2008, finish delayed to 2011. 410K sq/ft

1000 South Cap
Bought in 2005, currently Parking lot K for stadium
Future plans for a 320K office building.

Akridge Half Street
Purchased in 2007, currently undeveloped, future
Plans call for 700K sq/ft mixed use development

1325 South Capitol
Purchased in 2006.
Construction began late 2007, stopped 6 months later.
Finished April 2013
245 residential units.

Square 701
Owned for decades by one family, but first ever redevelopment plans weren’t submitted for zoning approval until 2012. 670K mixed use development planned.

By 12/04 when the stadium deal was signed, DC was in its 5th year of record breaking real estate development. According to the DC Development Report, more than 40 billion dollars of privately funded development ( inclusive of non-institutionally owned residential…i.e SFH renovations) had occurred in the District between 1999 and January of 2005, yet of that enormous amount of money, only a couple hundred thousand sq/ft had been built anywhere near the “now” ballpark, with another ~200 thousand in the pipeline.

None of the above 6 million sq/ft of deals, covering enormous swaths of SE near the Navy Yard were in any pipeline, or on anyone’s books until 2005, so I don’t see how anyone can say “development was coming, it was in the pipeline” because it simply isn’t true. According to JDLAND, approx half a billion in private money was spent on the above land purchases, all of it within 24 months of the stadium becoming real, most of it within 12 months. One can’t possibly say that “there just isn't any hard evidence that Nationals Park has led to any development”.

If the author is going to claim all or most of the development that has happened around the ballpark was already on the way, he needs to prove it because none of the above 6 million sq/ft of developable square footage was.

by SE-DC on Sep 4, 2013 1:49 pm • linkreport

About the income tax. I don't think the estimate is low. You failed to consider that the players both home and away would be taxed. With the exception of the teams from Pennsylvania (which has a reciprocal agreement with the District, Maryland and Virginia), all players would owe DC income tax for the portion of their income earned in DC.

by Tom on Sep 4, 2013 1:50 pm • linkreport

SE-DC

You know what else was happening then? The Capper Carrolsburg housing project was finally completely demolished.

And the new USDOT building opened.

I have no doubt that the demolition of C-Cburg, and opening of USDOT, would have impacted development in the area even if there had been no ballpark. How much of that would have moved ahead, at what pace, I do not know.

by MStreetDenizen on Sep 4, 2013 2:02 pm • linkreport

"it would also help reduce the amount of parking required for developments at surrounding parcels."

Not for the existing buildings or the two residential buildings now under construction, which are being built under the old zoning code and have parking.

Its a good idea though, for future developments that will be built under the new code. Surely some more new developments will be built closer to the ballpark, someday.

by MStreetDenizen on Sep 4, 2013 2:04 pm • linkreport

M street,

Like I said, I am not crediting the ballpark with every sq/ft of development planned or completed in that zipcode.

But those two projecets you mentioned total 1.6 million sq/ft. 1.3 of it being a government headquarters.

All of the 6 million sq/ft in projects I mentioned above, were private dollars. Claiming it was all underway, or would have happened anyway when confronted with the fact that none of the projects were on the board in 2004, and all of the property they now sit on was bought within `18 months of the stadium deal being inked, is silly.

by SE-DC on Sep 4, 2013 2:15 pm • linkreport

"How much of this other business do other MLS stadiums bring in?

Very little, if at all."

Not so! Here's what's going on in addition to soccer games in some of MLS's other soccer-specific stadia in September alone:

FC Dallas Stadium, Frisco, TX:
-Five high school football games
-Breakaway Music Festival
-Some other concert
-College football game

Toyota Park, Bridgeview, IL:
-College football game
-Car show
-5K race

Sporting Park, Kansasi City, KS
-Country music & camping festival

Dick's Sporting Good Park, Commerce City, CO
-Make-a-Wish Kickball Tournament

BBVA Compass Stadium, Houston, TX
-Margarita Pour Off event
-Six college football games

Also, I think we can safely say that if DCU can't find a stadium in the DMV, the franchise is moving out of the city. The owners lose serious dough each year they remain in RFK, and there's no hope of making money in that stadium for a host of reasons which I'm too lazy to regurgitate.

by Pseudonym on Sep 4, 2013 2:22 pm • linkreport

"But those two projecets you mentioned total 1.6 million sq/ft. 1.3 of it being a government headquarters.

All of the 6 million sq/ft in projects I mentioned above, were private dollars. Claiming it was all underway, or would have happened anyway when confronted with the fact that none of the projects were on the board in 2004, and all of the property they now sit on was bought within `18 months of the stadium deal being inked, is silly"

The point about C-Cburg is not how many sq feet replaced it. Its that it removed a public housing project with its negative externalities. Just as the ballpark removed the entertainment district, which had businesses that may well have been negatives for development. The argument is that the presence of the old C-Cburg held back development, and when it fell, new development was free to proceed. Similarly USDOT added eyes on the street, as surely as the ballpark did.

by MStreetDenizen on Sep 4, 2013 2:29 pm • linkreport

SE-DC:
"But those two projecets you mentioned total 1.6 million sq/ft. 1.3 of it being a government headquarters."

Don't forget that the US DOT headquarters also has two huge atriums for natural light in the middle of both of the buildings. These are nice features but they reduce the amount of usable space by perhaps 1/3.

by 202_cyclist on Sep 4, 2013 2:31 pm • linkreport

For starters, your facts are wrong. The baseball lease wasn't signed until March, 2006 (not December 2004), which undermines almost all of your deductions. And before you say that people made plans based on the promise of baseball, I'll remind you that originally, the council voted against the lease and MLB didn't like it. So any investments or plans made before then were speculative and the supposed impact of baseball has to be discounted as such. Smart developers don't gamble millions on the vote of council and the whim of MLB.

Even if you look at the four projects started during that window (and four is really not a lot for the middle of a nationwide real estate bubble) they aren't even that big.

Also, many of the projects you list are still in the planning or unstarted phase. If baseball is a driver of development what are they waiting for? Buying land and sitting on it isn't development, it's land speculation.

1015 Half Street predates the stadium (A building permit application was filed in late August, 2004 and they'd been working on it before then obviously).
1000 South Cap also predates the stadium (In 2006 they requested an ally closing for it and at that time JDLand notes, it had been on the boards for a number of years)

So let's break down your 13 projects:

Almost half of them, 6 1/3, are not even started yet.

Of those that have been completed, only two have grown up entirely after the baseball stadium. So 2 projects in 7 years is not that many. How does the area compare to NOMA? It looks like growth there is pretty much the same.

don’t see how anyone can say “development was coming, it was in the pipeline” because it simply isn’t true

If you don't believe me, why not believe experts in 2002:

"Land costs also would be comparatively reasonable near the Navy Yard in Southeast Washington, and a stadium there would fit with the mayor's goal of developing the waterfront. Downtown is not close, but both Interstate 395 and a Metro stop are. City officials say a boom of housing and commercial development is already transforming the area."

One can’t possibly say that “there just isn't any hard evidence that Nationals Park has led to any development”.

I can until you provide some.

none of the above 6 million sq/ft of developable square footage was.

Again, this is false. Both in that some of it was already being developed and that all of it was as "developable" then as it is now.

by David C on Sep 4, 2013 2:44 pm • linkreport

"Don't forget that the US DOT headquarters also has two huge atriums for natural light in the middle of both of the buildings. These are nice features but they reduce the amount of usable space by perhaps 1/3."

and the ballpark has a big field in the middle. '

Whats your point exactly? Im citing the USDOT and C-Cberg as projects that helped to change the perception of the area as dangerous, and so enabled other development. Just as the ballpark is said to have done (surely you don't think the impact of the ballpark on residential development is due to the demand to live within walking distance of baseball, do you?)

That presence or absence of atriums have no bearing on that.

by MStreetDenizen on Sep 4, 2013 2:47 pm • linkreport

David C:
"Also, many of the projects you list are still in the planning or unstarted phase. If baseball is a driver of development what are they waiting for?"

The Great Recession to end. Rents have decreased slightly this past year. I am not a developer but there are many things that affect timing and phasing of development. At least six hundred apartments, a Whole Foods, and a Harris Teeter are under construction now. Construction on an additional Forest City mixed-use residential building is expected to begin any week now.

by 202_cyclist on Sep 4, 2013 2:48 pm • linkreport

Tom

ou failed to consider that the players both home and away would be taxed.

That was the original proposal, but the player's association opposed it. As I understand it, the expected revenue from a player's tax was expected to be about $5 million. So they squashed the player's tax and added the rent instead. I could be wrong, but that's how I understand it. In negotiations, you see the player's tax disappear at the same time the rent comes in.

by David C on Sep 4, 2013 2:49 pm • linkreport

All of the 6 million sq/ft in projects I mentioned above, were private dollars.

No, because much of it is just drawings right now.

by David C on Sep 4, 2013 2:50 pm • linkreport

The Great Recession to end.

So the argument is that baseball would have driven development if not for the Great Recession? That's quite a strong claim of the behavior in alternate universe - how will you ever provide evidence to support such a claim?

by David C on Sep 4, 2013 2:54 pm • linkreport

David C:
"So the argument is that baseball would have driven development if not for the Great Recession? That's quite a strong claim of the behavior in alternate universe - how will you ever provide evidence to support such a claim?"

As I noted above, although most of DC was spared the effects of the recession, to the extent it had impacts, they were likely in the the yet-to-be-developed neighborhoods.

Without a doubt, the recession limited financing for many proposed developments. Additionally, developers can afford to wait another year or two for the market to strengthen so they can offer their units as condos once completed.

by 202_cyclist on Sep 4, 2013 2:59 pm • linkreport

@David C, et al:

I understand this post is about the Nationals stadium and not the Sacramento Kings arena but if stadiums have no impact on development, how come there are five major property deals next to the proposed arena in long-stagnant downtown Sacramento within a few months of agreement being reached to build a new arena?

by 202_cyclist on Sep 4, 2013 3:03 pm • linkreport

My point is that the stadium did not cause any measurable development. Even if your point that the Great Recession is to blame is true (and I don't think it is), it doesn't matter. The cause of the lack of development is irrelevant.

by David C on Sep 4, 2013 3:04 pm • linkreport

@David C:

It is not irrelevant at all if the stadium is a catalyst for development but some of the development was merely postponed because of the recession.

by 202_cyclist on Sep 4, 2013 3:05 pm • linkreport

re: Sacramento

I have no idea what this has to do with anything. I'm not going to research every single stadium in every single city.

If you would like to find some data, with links, and present it, I would gladly read it, but I'm not going to chase after every wild hare you rustle up. You want to present evidence? Do it. But if your best case for the economic impact of a stadium in DC is "What about this one proposed stadium on the other side of the country?" then I think you've got a weak hand.

by David C on Sep 4, 2013 3:10 pm • linkreport

@ David C:

I know you will be implacably oppposed to the stadium irrespective of actual experience or facts but here is what the director of the Capitol Riverfront Business Improvement District had to say about the impact of the 2008-09 recession:

"The recession and frozen credit markets are making
it much more difficult for developers to get loans
and downright risky for either commercial or residential
tenants to commit to leasing agreements in gentrifying
urban neighborhoods, according to Michael
Stevens, executive director of the Capitol Riverfront
Business Improvement District (BID)."

http://www.capitolriverfront.org/_files/docs/real-estate-law-&-industry-report.pdf

by 202_cyclist on Sep 4, 2013 3:10 pm • linkreport

It is not irrelevant at all if the stadium is a catalyst for development but some of the development was merely postponed because of the recession.

If it's a catalyst for development, then there is development. If there is not development, it was not a catalyst. You can't claim that your medicine saved lives if all the patients died.

by David C on Sep 4, 2013 3:12 pm • linkreport

In D.C., Baseball-Oriented Development Seems, at Last, to Be Working

http://www.theatlanticcities.com/neighborhoods/2012/05/dc-baseball-oriented-development-seems-last-be-working/1995/

Kaid Benfield also attributes any delay in development around the stadium to the Great Recession.

And here is Marc Fisher quoted in the article,

"’It took 10 or 12 years for the area around the Verizon Center to boom,’ Ross said. ‘The area around the baseball stadium is growing even faster."

It took a dozen years for the Verizon Center to fully become a catalyst for development. Nationals Park opened in 2008 (just five years ago), in the perhiphery of downtown, and much of the period since completion of the stadium has been Great Recession and credit crisis (the Verizon Center, on the other hand, was built during the roaring 1990s).

by 202_cyclist on Sep 4, 2013 3:18 pm • linkreport

@David C:

I am not going to convince a anti-stadium ideologue but it is not irrelevant at all. The stadium can be a catalyst for development while at the same time much of the development has been delayed because of the 2008-09 recession and the affects on financing and credit.

The article I posted above said it took a dozen years for the Verizon Center's positive effects to fully be realized. It is only 2013-- five years after Nationals Park was completed. Come back in a decade from now and then we can determine whether Nationals Park has been beneficial or not.

by 202_cyclist on Sep 4, 2013 3:22 pm • linkreport

Akridge's Half Street property directly across the street from the stadium was also involved in a lawsuit through the middle of 2008.

http://dcmud.blogspot.com/2008/06/monument-v-akridge-everyone-wins.html

by 202_cyclist on Sep 4, 2013 3:27 pm • linkreport

Fischer and Benfield are both wrong. And having wrong people say things that are wrong is not evidence. It's an echo chamber. You need facts, not the assessments of journalists.

Fischer thinks the success of the baseball tax has something to do with baseball, even though it does not. Also, there's no evidence that the Verizon Center caused the "boom" around. Much of the city boomed at that time, as did cities nationwide. A bad piece of deduction, completely devoid of evidence, makes a poor foundation for further deductions.

The fact that you have to make all of these excuses "It takes 12 years", "The Great Recession!" etc...does not make for a compelling case.

by David C on Sep 4, 2013 3:28 pm • linkreport

"Come back in a decade from now and then we can determine whether Nationals Park has been beneficial or not."

Dave C is attempting to do a retrospective CBA. Its difficult to do a retrospective CBA of a project when the benefits of a project have not yet come to fruition (which may have been predictable, or not). IF its legitimate to think that development could not happen in the last few years due to the business cycle, than in effect, all we are dealing with are projections. In which case using Nats park is not terribly useful in forecasting the impact of a soccer arena, since the answer for nats park is not in yet.

How unfortunate that DC must make a call on yet another sports venue when the answers for the last one are not yet available.

by MStreetDenizen on Sep 4, 2013 3:29 pm • linkreport

2008 was 5 years ago! That plot is the one most likely to have baseball related development (being between the metro and the stadium) and it has none. That's the most damning piece of evidence out there.

by David C on Sep 4, 2013 3:33 pm • linkreport

@David C:

Is this Columbia U. study also wrong? Perhaps you are the only person who is correct?

"• Current recession: the recession has diminished prospective investors’ willingness to invest in the Near Southeast neighborhood

• High vacancy: due to the recession the vacancy rate as of 2009 was 23% ; this figure could be alarming to potential developers"

http://www.arch.columbia.edu/files/gsapp/imceshared/Washington_Navy_Yard_Report.pdf

I realize I am not going to change the opinions of anti-stadium ideologues.

by 202_cyclist on Sep 4, 2013 3:34 pm • linkreport

[This comment has been deleted for violating the comment policy.]

by David C on Sep 4, 2013 3:36 pm • linkreport

@David C:

How would you describe someone who says that a George Washington Law School professor (and a natoinal expert on smart growth), the Business Improvement District executive director, a Columbia U. study, and a long-time Washington Post columnist are all wrong?

by 202_cyclist on Sep 4, 2013 3:39 pm • linkreport

DavidC,
"For starters, your facts are wrong. The baseball lease wasn't signed until March, 2006 (not December 2004)"

That's not what I said now was it.

http://www.washingtonpost.com/wp-dyn/articles/A13700-2004Dec20.html

As of Dec 2004, the council had committed to building the stadium, Completely different than the MLB lease. See above.

Of the 6 million, 2 million is complete, another million is under construction. The rest has been entitled since 2008 and is waiting for the market to warrant building it.

As I said before and as you seem intent on ignoring, none of the above par s were even sold until 2005, so pretending they had been in the pipeline for years is simply silly.

Lastly, your unwillingness to a acknowledge the effects of the greatest recession since the Great Depression on the credit markets simply proves your aversion to any kind of factual data.

by SE-DC on Sep 4, 2013 3:40 pm • linkreport

MStreetDenizen:
"IF its legitimate to think that development could not happen in the last few years due to the business cycle, than in effect, all we are dealing with are projections. In which case using Nats park is not terribly useful in forecasting the impact of a soccer arena, since the answer for nats park is not in yet."

Now, this would have been more useful than assesing a stadium that has existed for five years out of its 30 or 50 year useful life and saying that it has been a failure and that since it has been a failure, a futbol stadium 1/2 the size and 1/3 to 1/4 the cost of Nationals Park will also be a failure. It almost makes me think that David C. is hostile to any public funding of stadiums.

by 202_cyclist on Sep 4, 2013 3:43 pm • linkreport

"I realize I am not going to change the opinions of anti-stadium ideologues."

I wish I had a dollar for every time a stadium proponent calls someone who disagrees with them an ideologue. Then I'd buy me one of them new townhomes.

by MStreetDenizen on Sep 4, 2013 3:43 pm • linkreport

I'm not arguing that there was no recession or that it didn't make building difficult. Here's how it's going.

"The baseball stadium caused near SE to develop"
"Really, which projects?"
"Well, they're not built yet because of the Great Recession."
"Then how did it cause near SE to develop?"
"I go there now, and I didn't before, so before it didn't even really exist."

by David C on Sep 4, 2013 3:44 pm • linkreport

A 2001 study of the Pittsburgh Penguins' contributions to the public good tried to answer that question and put the value of the team between $4.20 and $6.94 per household.

I don't agree that the study determines the value of the team, rather it determines the willingness to pay higher taxes. The study is based on a survey in which folks from the greater Pittsburgh area were asked about their willingness to pay higher taxes so the city could buy the team.

First, folks from western PA are not that likely to say yes to any tax increase regardless of what it's for. If you were to hold other public goods to the "higher taxes" test, I'd guess that few would pass. The study does not actually compare any other public good to the Penguins, so we have no idea how other things (like say transit) would fare under this test.

Ask the question "how much money would you be willing to divert from other government expenditures to retain the Penguins" and you'd get a different response. Or, ask the question "how much would you be willing to raise taxes on people other than yourself such as businesses to retain the team [which is similar to the actual funding mechanism for the Nationals]" and you would also get a very different response.

Second, the idea of having the city own the team may not seem like a good idea to a lot of people.

by Falls Church on Sep 4, 2013 3:45 pm • linkreport

David C:
"I'm not arguing that there was no recession or that it didn't make building difficult."

But this is exactly what you are arguing.

"My point is that the stadium did not cause any measurable development. Even if your point that the Great Recession is to blame is true (and I don't think it is)..."

A little more honesty would be nice.

by 202_cyclist on Sep 4, 2013 3:46 pm • linkreport

"How would you describe someone who says that a George Washington Law School professor (and a natoinal expert on smart growth), the Business Improvement District executive director, a Columbia U. study, and a long-time Washington Post columnist are all wrong?"

If I didnt know this was about the stadium, and you asked me what I would call someone who disagreed with the conventional wisdom on macroeconomics expressed by a WaPo columnist, an academic with no macro quals, and a local businessman, I would answer "Why I would call them Professor Krugman, of course"

Thats not say the Princeton nobelist has an opinion on near SE. Its to say that arguments from authority can be quite weak - esp when the source of that authority is being a long time WaPo columnist. I mean then we would have to listen to Robert Samuelson on economics, Courtland Milloy on bike lanes, etc.

by MStreetDenizen on Sep 4, 2013 3:47 pm • linkreport

Perhaps you are the only person who is correct?

Actually, almost every economist who has studied the issue agrees with me - there is "no statistically significant positive correlation between sports facility construction and economic development."

by David C on Sep 4, 2013 3:51 pm • linkreport

@MStreetDenizen

That is all very good except Kaid Benfield has written extensively on smart growth and Marc Fisher wrote about DC growth and development for several years, if not decades. I also think someone who represents the businesses and developers in the Capitol Riverfront neighborhood should be pretty knowledgeable about that neighborhood.

by 202_cyclist on Sep 4, 2013 3:52 pm • linkreport

"Now, this would have been more useful than assesing a stadium that has existed for five years out of its 30 or 50 year useful life and saying that it has been a failure and that since it has been a failure, a futbol stadium 1/2 the size and 1/3 to 1/4 the cost of Nationals Park will also be a failure. It almost makes me think that David C. is hostile to any public funding of stadiums."

I'd say that its a decent reason for skepticism that the ball park, when we look back in 10 or 15 years time, will have a positive NPV for the District. Not that it will be settled then. IF there development in near SE picks up again (as I expect it to) there will still be the question of how much the ballpark accelerated it (and, what has been overlooked where that development came from - remember such ballpark triggered development as DOES occur is only a benefit to the district if in the absence of the ballpark it would have gone to the suburbs or would not have come to the metro area at all - IF the ballpark is only diverting development from NoMa (or Tenleytown, for that matter) that impacts the cost benefit analysis.

by MStreetDenizen on Sep 4, 2013 3:53 pm • linkreport

@David C:

"Actually, almost every economist who has studied the issue agrees with me - there is "no statistically significant positive correlation between sports facility construction and economic development."

Again, then how do you explain the sales of five large downtown properties in a stagnant area almost immediately following a stadium deal?

by 202_cyclist on Sep 4, 2013 3:54 pm • linkreport

"That is all very good except Kaid Benfield has written extensively on smart growth"

except the question here is not the enviro effects of smart growth, or the nature of walkability, but the impact of the business cycle on development.

" and Marc Fisher wrote about DC growth and development for several years, if not decades."

And is there any evidence that he has been particularly good at predictions or insightful in his analyses? Heres a clue - columnists are chosen for their ability to whip out a readable column on a regular basis.

" I also think someone who represents the businesses and developers in the Capitol Riverfront neighborhood should be pretty knowledgeable about that neighborhood."

They would also have an incentive to make excuses for why said neighborhoods development appears to be on hold.

None of which proves them to be wrong - it suggests that it would be better to marshall arguments than to cite authority in this instance.

by MStreetDenizen on Sep 4, 2013 3:57 pm • linkreport

"Again, then how do you explain "

Im confused - do you accept arguments from authority, or dont you?

Also - have you learned about where the Geospatial intell building is relative to the metro station? have you come down here and walked around? I mean on a non-game day?

by MStreetDenizen on Sep 4, 2013 3:59 pm • linkreport

@MStreetDenizen:

The study that David C quotes also says the following:

"Even though it is difficult to justify new stadium construction on economic growth grounds, it is possible that such construction would facilitate efforts to redevelop an urban core...Only when a sports venue is complemented by a year-round business
district or residential neighborhood will there be appreciable independent investment activity."

This study was written nearly a decade and a half ago, before most of the new urban infill stadiums, when most of the stadiums were suburban stadiums surrounded by parking lots. As I've mentioned before and as other people have mentioned on these GGW posts, context matters when assessing whether a stadium has provided or will provide benefits.

by 202_cyclist on Sep 4, 2013 4:09 pm • linkreport

First, folks let’s get off this post speculation of the National Stadium and development argument. The council and the Lerners have gotten what they wanted and we need to learn from the BS on jobs/employment opportunities with retail development that was promised but never delivered or materialized.

Wait and see what? If it doesn’t happen (fulfillment promises of revenue and retail development) we still must blame ourselves to allow developers’ and council promises to push the District into worthless business ventures.

by Calvin H. Gurley on Sep 4, 2013 4:10 pm • linkreport

MStreetDenizen:
"Im confused - do you accept arguments from authority, or dont you?"

The five property transactions in Sacramento almost immediately following the arena deal aren't academic arguments from a decade and a half ago. They are current, observed, behavior.

by 202_cyclist on Sep 4, 2013 4:11 pm • linkreport

WAYNE CURRY (Prin.Geo.County Execu) SHOULD BE MAYOR OF THE DISTRICT of COLUMBIA...not V.Gray.

@Calvin, so you're saying we should build a casino in Buzzard Point?
by mrewers on Sep 4, 2013 11:52 am

Who is really planning projects for this city?

If our tourist dollars and convention center dollars are currently being taken away by the Gaylord-Harbor Place in Prince Georges then casinos will really devastate the District’s economy. Why wait to copy PG County’s future investment plans?

What should be the District’s future economic plans? READ-

“…Casinos are spreading like cancer in the U.S. Resistance is crumbling as lawmakers point to neighboring jurisdictions and say: Why should they get all the money?

When this issue pops here, and it will, it absolutely will, the GWW threads will be long .........”

by kob on Sep 4, 2013 12:17

Current District financial fiascos:
1) A defunct trolley system that has no worth or financial integrity?
2) A newly built Marriott 1,001 bedroom hotel…with an adjoining convention center that is losing bookings?

Why not bring casinos to Buzzard Point…and NOW!! The water ferry can leave Virginia torpedo factory dock and travel to either the Gaylord Resort-MGM Grand or the District’s Buzzard Point “Wynn” Casino and Grand Hotel.

Tell your Mayor and silly Council to start thinking responsibly about Prince Georges investments in Casino hotels and do the same with Buzzard Point. If the District can’t compete then all the councilmembers and the Mayor need to be fired and ran off to Prince Georges County.

Wake Up Trusting Citizens

Calvin H. Gurley

by Calvin H. Gurley on Sep 4, 2013 4:13 pm • linkreport

As a follow up showing how flawed the logic of using the Penguins study is to value a team:

The correct question to ask when estimating the value of a team to the populace is not how much higher taxes would they be willing to pay. Rather ask: "the team is splitting itself up into 260,000 shares [one per household in DC] and selling the shares. How much would you be willing to pay for one share?"

The Green Bay Packers recently did that by selling 268,000 additional shares of the team in a secondary offering. The shares sold for $250 each. However, it's worth pointing out that these aren't even actual shares in the team. Packers stock isn't like regular stock. Its value doesn't increase, there are no dividends, it has virtually no re-sale value and it doesn't give buyers any advantage over the 93,000 people on the waiting list for season tickets.

What buyers do get is a piece of paper declaring them a team owner and conferring rights to attend and vote at the annual stockholder meeting, which is held at Lambeau Field each summer before training camp. They also get access to a special line of shareholder apparel.

by Falls Church on Sep 4, 2013 4:14 pm • linkreport

As of Dec 2004, the council had committed to building the stadium, Completely different than the MLB lease.

True, but it hardly makes the stadium a done deal. Any land purchasing in that window is done at risk that the deal could fall apart.

Of the 6 million, 2 million is complete, another million is under construction. The rest has been entitled since 2008 and is waiting for the market to warrant building it.

I'm sorry, but nothing on your list of 13 properties are "under construction", so where are you getting that million sq feet. In fact, where are you getting any of these numbers.

And if the stadium is the catalyst for development, then that should be all that is needed to warrant building it. If not, then the stadium isn't a catalyst. At best it is a part of this complete breakfast, and a pretty small one if 9 years after "the deal", most of the development you point to hasn't happened yet.

The BID claimed success in 10 million Sq. Feet of development in 2011, so the 2 million from baseball (which is due to baseball and other things you claim) isn't really that big of a deal.

As I said before and as you seem intent on ignoring, none of the above par s were even sold until 2005, so pretending they had been in the pipeline for years is simply silly.

And I said before, that's wrong.

1015 Half Street predates the stadium (A building permit application was filed in late August, 2004 and they'd been working on it before then obviously).

Also, you've picked a list of projects that have started in the last 9 years. 13 you claim. Of which half are not started. I could make another list - a longer list I suspect - of projects that started in the previous 9 years. Development didn't come to a stop - and that's not what I'm saying - but it continued much as it had, with a hiccup perhaps due to the great recession.

Some projects were not in the pipeline prior to 2004. But that doesn't mean they got in the pipeline because of baseball. The area was developing and that has continued, just as it did in NoMa after it didn't get a stadium.

unwillingness to a acknowledge the effects of the greatest recession since the Great Depression on the credit markets

Perhaps I confused people, though I don't know how. But I fully acknowledge the effects of the greatest recession since the Great Depression on the credit markets. It just doesn't change my argument or yours. Arguing the stadium would have caused development if not for the Great Recession is like arguing you would have gotten away with it but for those meddling kids. It didn't, and giving excuses for why doesn't change that.

by David C on Sep 4, 2013 4:21 pm • linkreport

Rather ask: "the team is splitting itself up into 260,000 shares [one per household in DC] and selling the shares. How much would you be willing to pay for one share?"

And that method still stinks. I know plenty of Packer fans who think that the folks that fork over the $250 for meaningless stock are idiots who paid a rather high price for something to hang on their wall.

Yet, those that do not pay in still get to enjoy the presence of the Packers in their market - free riders, they are.

You can't get away from the fact that professional sports teams (or a big time college sports team) provides a cultural value to the public in a place that's not going to be easily quantified.

by Alex B. on Sep 4, 2013 4:29 pm • linkreport

"MStreetDenizen:
"Im confused - do you accept arguments from authority, or dont you?"
The five property transactions in Sacramento almost immediately following the arena deal aren't academic arguments from a decade and a half ago. They are current, observed, behavior."

You call Dave C an ideologue for disagreeing beidenfeld, Fisher and the BID guy, but you don't automatically accept the views of cited economists. If disagreeing with those economists does not make you an ideologue, how does disagreeing with the folks you cited make Dave C an ideologue.

Look I get it that there was a recession. I also get that there are few places with the development potential near SE had. Its quite possible that absent the recession more would have already been built. but its also possible that in the absence of recession, and in the absence of the ballpark, all or most it would have been built anyway. Most of it is not tied to the ballpark. The crime situation was improving with the CCbrg demolition and with USDOT, and Nats park provides eyes on the street only 81 days a year and for limited hours. The biggest unknown, in my opinion is what would have happened to the legacy entertainment venues, and how big a negative they were - but no one seems interested in addressing that.

by MStreetDenizen on Sep 4, 2013 4:31 pm • linkreport

The NoMA BID and Capitol Riverfront BID were created the same year - 2007. If the stadium is such a great catalyst for development, how come six years later NoMA is going gangbusters on construction but the area around the stadium (*cough* across the street from the stadium) is still full of empty lots?

Seems like people just want to nitpick about whether the stadium generated ZERO or SOME accelerated development rather than actually thinking about whether we got even halfway to breaking even on our nearly billion-dollar investment. I'll agree that David is glib in his assessment that the stadium caused zero development but it is pretty unclear that the stadium accelerated anything. I feel like at a minimum we could expect the two sites directly between the Metro and the stadium to have something going on other than a vacant lot and the cobbled together Fairgrounds.

by MLD on Sep 4, 2013 4:40 pm • linkreport

@oboe

So....the District is "struggling"?

I think most would disagree with you there.
by oboe on Sep 4, 2013 1:12

OBOE…why does the District plan to place 130 stop sign cameras on city streets? Why all the red light and speed cameras? Why are ticket violation fees so high? And, all of this “creative” financial planning is focused upon you paying these violations in addition to paying your high amount of property tax. My man, in the District, an one dollar purchase cost you and me $1.10.

All your mayor and Council members have to do is be financially wise with their investment of tax dollars!!!

Are you not tired of the District targeting you and your hard earn wages by using the D.C. code to take more money from you and yours? This is not creative financial thinking [penalizing your residents’ every move] by increasing cell phone fees, special utility fees and charges, $1.00 ticket tax on baseball ticket sales, high gasoline prices. And, who can afford to pay for a taxi in the District after killing the zone fare system?

Are you awake? Or, giving the District every fee, charge, surcharge has not affected your deep pockets yet? How about your retired parents fixed income?

You and I are in this Mayor and silly Council’s Machiavelli’s world. The Mayor’s Machiavelli system uses punishment and strife (squeeze every dime from D.C. residents) to suppress your thinking about anything else in life and you find yourself daily trying to keep up “financially” to survive in this city. No time to take a vacation, nine to ten hour work days are now normal and salaries and wages are dormant in this Federal Government major employer town.

Calvin H. Gurley

by Calvin H. Gurley on Sep 4, 2013 5:05 pm • linkreport

"OBOE…why does the District plan to place 130 stop sign cameras on city streets? "

I dunno. I live in Fairfax and I've suggested it would be great if Fairfax could have speed cameras (Va law does not allow them, though we do get to have a limited number of red light cameras). I have suggested that because I would like to cross the street without taking my life in my hands.

by AWalkerInTheCity on Sep 4, 2013 5:20 pm • linkreport

Shouldn't the burden be on proponents of the stadium? They are the ones saying that the city should be spending a big chunk of $, giving it to a private company, and making a land use decision covering a big chunk of land. The proponents point to development, but no one has shown that a baseball stadium spurs development more than other development, and there is a wide consensus among economists that there is NO net return. If we are going to roll the dice with the citizens money, why not put a tech incubator on that land? Or just make it into a series of soccer fields. There is already a shortage of soccer fields in the Metro area, and DC can charge for access.

by SJE on Sep 4, 2013 6:08 pm • linkreport

Whether or not the city is struggling is irrelevant. What is relevant is whether this is a good use of $.

by SJE on Sep 4, 2013 6:10 pm • linkreport

DavidC,

All my numbers and dates are from jdland, a resource you yourself have used, so it is odd it is a valuae resource to you, and purveyor of incorrect information to me.

And yes, once the council signed on the dotted line in dec 2004, the money for the stadium construction at the navy yard was legislatively committed, which is why you saw the sale of a dozen properties within months of the signing because it WAS official as of then.

I've given you dates of sale and my source. It's your turn. Please provide dates of sale and your source of Atleast 5 million sq ft of proposed development other than the DOT headquarters.

by SE-DC on Sep 4, 2013 6:57 pm • linkreport

But this is exactly what you are arguing.

No. Here is what I meant by "My point is that the stadium did not cause any measurable development. Even if your point that the Great Recession is to blame is true (and I don't think it is)"

What I don't think is true is that the Great Recession is the reason why the stadium did not cause any measurable development. I do believe that the GR caused a reduction in development, but I don't believe that with the stadium and no GR development would have been any greater than with no GR.

A little more honesty would be nice.

You've gone through quite a litany of criticism so far and nothing has stuck. If you have to resort to personal insults like this and by calling me an ideologue then I guess that means you're running out of options. But I can assure you, I have been nothing but honest. Writing a post and defending it requires honesty, or else it will never stand. I'd appreciate the benefit of the doubt here.

by David C on Sep 4, 2013 8:39 pm • linkreport

Again, then how do you explain the sales of five large downtown properties in a stagnant area almost immediately following a stadium deal?

Again, how do you explain it? I don't know anything about Sacramento. So I would never try to explain it.

by David C on Sep 4, 2013 8:40 pm • linkreport

@Falls Church,

I don't agree that the study determines the value of the team, rather it determines the willingness to pay higher taxes.

To pay higher taxes FOR THE TEAM.

First, folks from western PA are not that likely to say yes to any tax increase regardless of what it's for.

Do you have any data on the relative willingness of people in one region to agree to taxes compared to people of other regions. This sounds like magical economics so far.

The study does not actually compare any other public good to the Penguins

No. It compares money. Which is much more useful.

Ask the question "how much money would you be willing to divert from other government expenditures to retain the Penguins" and you'd get a different response.

Would you? I'd like to see that study.

Second, the idea of having the city own the team may not seem like a good idea to a lot of people.

Or it may seem like a much better idea.

Rather ask: "the team is splitting itself up into 260,000 shares [one per household in DC] and selling the shares. How much would you be willing to pay for one share?"

The Green Bay Packers recently did that by selling 268,000 additional shares of the team in a secondary offering. The shares sold for $250 each.

Well, there are several flaws with this. One is that only the most rabid fans are buying the shares. What we want to know is what would the average resident of Green Bay pay for a share. Then, the Packers are unique in so many ways - small town, long history, owned by the city. So I think Green Bay fans probably get more public good than Nats fans, and by a long shot. And third fans do get things for this money, even if they seem to be of low value to you.

A better question is, how much would the Nats be able to raise on Kickstarter to pick up a good player off of waivers? Or to pay their rent? And only DC residents would count.

If you think $6.33 per household is too low, what do you think the public good of the Nats is? $12 per household? $50? Give me a number.

by David C on Sep 4, 2013 8:53 pm • linkreport

"Arguing the stadium would have caused development if not for the Great Recession is like arguing you would have gotten away with it but for those meddling kids. It didn't, and giving excuses for why doesn't change that."

But it's nothing like that. In any case, the stadium did cause a significant amount of development, your opinion notwithstanding. All folks are arguing is that the development occurred at a bit slower pace than many would have hoped (and apparently some would demand) given that credit markets seized up world-wide for a couple years. No need to follow-up, by the way: I've read your arguments and the only one I find mildly persuasive is that a large chunk of entertainment and development dollars were simply diverted to the Ballpark area, rather than created anew. Still, I and many thousand others, are glad the stadium and revitalized neighborhood are there to add to the already diverse cultural offerings in this town. I look forward to the same happening a couple blocks west at Buzzard Point.

by Dno on Sep 4, 2013 9:21 pm • linkreport

so it is odd it is a value resource to you, and purveyor of incorrect information to me.

Here is the citation for you - from JDLand in September 2004 as in prior to 2005. It's accurate information to both of us, if you read it right.

which is why you saw the sale of a dozen properties within months

A dozen? Within months (as in less than a year)? I think not.

I've given you dates of sale and my source.

No, you gave dates of sale and said "look it up on JDland". You never counted up the sq. ft. for me.

Please provide dates of sale and your source of Atleast 5 million sq ft of proposed development other than the DOT headquarters.

I assume your saying 5 million sq ft and no DOT HQ, because you're counting that as 1 million sq ft. But I'll point out it's actually 1.35 million sq ft.

The Yards/SE Federal Center
Put up for bid in 2003
2 million sq ft

Florida Rock
In planning as far back as 1998 (Here's an article from 2001)
1.1 million

80 M Street
Built in 2001
275,000 sq ft

1015 Half Street
Planned prior to Aug 2004
410,000 sf

1100 New jersey
Completed 2004
297,000 sq. ft. (4.1)

Capitol Hill Towers
Funding approved in Jul 2003
Can't find square footage, but 204 hotel rooms, 9000 sf or retail and 344 unit co-op tower

Capper/Carrolsburg
Hope VI grant given in 2001
750,000 sf of office and retail + 1700 homes

300 M Street
Opened in 2001
300,000 sq. ft.

So I think that adds up to at least 5 million, plus all the homes and hotel rooms on top of that. All within a relatively short period prior to 2004 and within blocks of the stadium. And I could come up with more.

BTW, I think this from the 2001 article above is particularly awesome.

>>District planners are racing to rezone Buzzard Point, one of the Southwest waterfront's most visible landmarks, to prevent it from being "overrun with office buildings.""

"We're seeing an unprecedented level of interest in this area," says Uwe Brandes of the Office of Planning. "The private development market is so strong that we're concerned something will slip in before we can do anything about it."

Planners are expecting developers to swarm Buzzard Point as the supply of commercial property starts shrinking. The point is just downriver from major redevelopment projects at the Southeast Federal Center and Washington Navy Yard, where an influx of military personnel and contractors is spurring a building boom along M Street SE.

"We're concerned that as the Navy Yard gains steam, we would see offices creeping down to Buzzard Point, like we saw occurring in Crystal City," Brandes says. "If we don't do anything, this whole area could be overrun with office buildings."

Buzzard Point was considered a few years ago as a possible location for a new U.S. Supreme Court headquarters and two large private developments already are being planned on either side.<<

OMG! Those areas really do sound like they need some sort of stimulus.

by David C on Sep 4, 2013 9:38 pm • linkreport

In any case, the stadium did cause a significant amount of development, your opinion notwithstanding.

Prove it.

by David C on Sep 4, 2013 9:41 pm • linkreport

"Prove it."

As in demonstrate a statistically significant, indisputably causal relationship between the two, accounting for all relevant variables? No thanks. I would try, but it would be as futile as your attempt at a cost-benefit analysis. Instead, I place my trust good ole common sense that there is no way Navy Yard would be developing into one of the city's most desirable neighborhoods absent the unique anchor and catalyst that is the ballpark. I'll admit to bias since I also see it as a cultural asset, but that should be counteracted by the fact that my tax dollars contributed towards building it, and I generally would like my government to use them wisely. I read and regurgitated some of the studies you cite way back in graduate school, by the way, and I realize that there have been some terrible stadium deals plopped into situations in which they had no chance to catalyze additional development. I'm glad Nats Park wasn't one of them and that the new soccer stadium looks even less likely to be so. I'm also glad to have reconnected with common sense instead of insisting that everyone solve a proof for every statement made.

by Dno on Sep 4, 2013 10:46 pm • linkreport

"BTW, I think this from the 2001 article above is particularly awesome...Planners are expecting developers to swarm Buzzard Point as the supply of commercial property starts shrinking... OMG! Those areas really do sound like they need some sort of stimulus."

Right, in 2001 it sure sounded like Buzzard Point was going to take off. It's now 2013 and the the only thing "swarming" the area, absent the stadium proposal, is Pepco and a salvage plant. Simultaneously, you argue that 5 years is a sufficient time frame with which to judge development around Nats Park.

by Dno on Sep 4, 2013 10:55 pm • linkreport

'm also glad to have reconnected with common sense instead of insisting that everyone solve a proof for every statement made.

If your going to state something as fact, you should be prepared to provide some evidence. Statistical proof isn't necessary, but some sort of analysis beyond your gut feeling would do. I will discount your statement accordingly as I'm sure everyone else will.

It's now 2013 and the the only thing "swarming" the area, absent the stadium proposal, is Pepco and a salvage plant. Simultaneously, you argue that 5 years is a sufficient time frame with which to judge development around Nats Park.

The evidence so far is that the District's interest in developing Buzzard Point into a soccer stadium has actually stiffled development. And Nats Stadium has been around for 7-9 years depending on who you ask.

by David C on Sep 4, 2013 11:00 pm • linkreport

I did just realize that I made one omission. The stadium construction will result in some tax benefits. Assuming that the full $300 million has a similar benefit as the baseball stadium, that's something like $5.5 million. So now we only need to cover the other $144.5 million.

by David C on Sep 4, 2013 11:06 pm • linkreport

[This comment has been deleted for violating the comment policy.]

by Eric on Sep 5, 2013 12:31 am • linkreport

Again, the issues as discussed in the previous entry, are more gray. The issue really is how much public money to give, what is the real ROI, is it worth it. Yes, some of the development comes "because of the stadium."

n.b. to 202_cyclist, the reason that the parking doesn't get used during the day (what JJ would call mixed primary use) is that there isn't much demand for it, and DC doesn't want to encourage driving into the city. Plus federal workers in that area get transit benefits. (I don't know if federal contractors offer a similarly good deal.)

wrt the comparisons to NOMA, it shows the difficulty of figuring everything out. First, NOMA is closer to Downtown, by Union Station, an easier choice, more of a sure thing, less risk. By way of comparison, most of the businesses locating on M St. SE have to do with the Navy or USDOT.

But NOMA also was in play earlier, even though to the casual observer it was at the same time as the now named Capitol Riverfront. I don't know all the particulars, but NOMA has a special zoning that allows for somewhat taller buildings than would be typical. That was approved in the 1990s. And there are no special design review requirements along with that (something I've rued, and discussed here http://urbanplacesandspaces.blogspot.com/2011/10/noma-revisited-business-planning-to.html).

Even though construction on the Metro station didn't start til 2001, with the planning and funding process for that starting in the mid-1990s, developers knew the station was coming, and that it would be an incredible catalyst. The location makes it more likely to get fed. agency leases (Union Station has railroad service, not just subway service). Etc.

2. wrt the recession, yes, the recession has slowed things down. It's much harder to get financing. Monument was a big recipient of financing from Lehman Bros., which went out of business, etc.

But again, the primary drivers for property development in that area don't have much to do with the stadium, because it is active only 1/4 of the year. Fundamentals have to focus on the other characteristics of the area, proximity to other places. It's not Wrigleyville... and Wrigleyville in the scheme of things is an outlier.

(Note also in this discussion that when the stadium there was first discussed it was compared to LoDo in Denver. I made the point that the revitalization effort there preceded stadium development by at least 15 years. There the stadium came to that area because it was already successful.)

by Richard Layman on Sep 5, 2013 5:48 am • linkreport

Residual value? Can someone name a single abandoned stadium that hasn't had a negative value? (I.e., requiring public subsidy to maintain or ends up being torn down.) I suppose there's the Colosseum (requires maintenance money but generates a lot of tourism), anything more recent?

by Mike on Sep 5, 2013 8:15 am • linkreport

Has anyone factored in what the impact would be if United packed up and moved elsewhere?
Would the city feel anything with the void left with the departure.
Also how much has the city made from United in their current rental situation?
Has the city spent any money on RFK stadium in the past decade?

by Bill Bak on Sep 5, 2013 10:29 am • linkreport

Bill,

The cost of the void is what I was trying to determine with the Penguins "public good" analysis. How much do you think the city should pay to avoid that feeling?

The current RFK situation is also a money loser for DC

"In this fiscal year, the RFK campus generated $4.1 million in revenue for the authority against $5.3 million in expenses. It is not clear how much of that revenue comes from D.C. United’s rent."

As part of the baseball deal, some improvements were made at RFK and more since then, most recently in 2012:

"Events DC said it would improve lighting on the concourse and renovate restrooms in a facility that opened in 1961. The improvements are part of a “multi-million dollar” plan to upgrade RFK and the adjacent D.C. Armory."

by David C on Sep 5, 2013 11:51 am • linkreport

This analysis fails to acknowledge that the stadium will be the host of many events other than just DC United games (lacrosse, concerts, HS football etc). Further, this isn't 1997 when the author moved to DC. There is no longer a doubt as to whether MLS will survive in this country. Soccer is here to stay and any implication otherwise is just naive. As noted in the other comments below, his analysis leaves out a number of other revenue streams coming from the stadium. Not very well researched at all.

by Croftonpost on Jan 27, 2014 7:34 am • linkreport

Money spent on RFK would be a complete waste of spending.
Going to a soccer game there is a wretched experience and that has nothing to do with United being awful last season.
I have been to other stadiums around the league and RFK is by far the worst! The easiest to get in and out of is Jeldwen in Portland. Leaving the stadium by foot, car or public transit is not complicated or troublesome. Columbus Crew stadium is in the state fairgrounds and is a easy "get out" by car. Red Bull arena is just stunning. I can only remember the city transit because I left the car at the hotel. Same at Chicago's Pizza Hut stadium as well.
The bottom line is RFK is just not any good. It offers very little value for the dollar and I would much rather go elsewhere to see a game than drive the 12 miles from my home.

by Bill Bak on Jan 27, 2014 9:40 am • linkreport

@croftonpost,

If I failed to note the other events, it's only because there has been no announcement of those events. Do you have any data on how many other events will be at the DC United Stadium? I did include the revenue of such events in the calculation, since they're included in the sales tax that Nationals Stadium collects, and I based DC United's sales tax revenue on that. In addition, hosting a HS football game that would have otherwise been elsewhere in the city isn't much of a gain and likely results in little new revenue.

It is true that MLS survival looks likely, but it is also true, that after nearly 20 years, the league has yet to make a profit. Since that is a long time for a company to lose money, I put the over/under on a team still operating in DC 20 years from now at about 50/50.

his analysis leaves out a number of other revenue streams coming from the stadium.

For example?

by David C on Jan 27, 2014 11:09 am • linkreport

One can always count on both U.S. men's and womens national teams playing games in the new stadium espeincially being the Nations capital.
Summer friendly series like Barcelona verses Juventus or other like club matchups.
D.C. United, I am sure would continue their citywide soccer outreach programs for children that reside in D.C.
Also to a lesser extent, the club would be able to keep their store open year round. Open for club/stadium tours.
With Maryland moving to the Big10, one would think that a league championship game would be high profile enough to attract a good crowd and media.
Everything else has been mentioned ie; concerts, high school games maybe with the facilities smaller conventions and other demonstration events.

by Bill Bak on Jan 27, 2014 4:39 pm • linkreport

Also the MLS All-star game would be a sure thing. But that is just one game.
As far as the numbers that the league published, counter that with the weaker clubs that the league bolsters then take in account clubs like Portland, Seattle, Toronto, Vancouver, New York, Chicago and Denver to name a few. Those teams all seem to have little trouble keeping investors happy and fans coming to their games.

by Bill Bak on Jan 27, 2014 4:55 pm • linkreport

That might add 5-10 events a year (being very generous). But baseball starts with 81, and I used that as the basis, so I think it's still generous. But if someone would like to come up with a different number, I'd be interested in what that is.

by David C on Jan 27, 2014 8:26 pm • linkreport

Add a Comment

Name: (will be displayed on the comments page)

Email: (must be your real address, but will be kept private)

URL: (optional, will be displayed)

Your comment:

By submitting a comment, you agree to abide by our comment policy.
Notify me of followup comments via email. (You can also subscribe without commenting.)
Save my name and email address on this computer so I don't have to enter it next time, and so I don't have to answer the anti-spam map challenge question in the future.

or