District of Columbia

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DC City Council Has Problems with $55 Million Wizards Practice Stadium

13 Jan, 2016

By: Tracey Schelmetic
Cost Overruns and Missed Deadlines Have Plagued Project

Somebody has some ‘splainin’ to do.

If Washington DC’s newest stadium opens as planned in August of 2018, the venue – which will be a home stadium for the Mystics and a practice venue for the Washington Wizards – will not have been completed without extra helpings of politics, cost overruns, accusations of incompetence and missed deadlines.

The $55 million sports and entertainment arena is expected to be located in Ward 8, the poorest ward in Washington, DC, on the grounds of the old St. Elizabeth’s Hospital. Optimists are hoping for a cascade of economic benefits for the area, while pessimists believe that the ward’s reputation for crime and urban blight will keep fans away, and that the neighborhood could have been better served with a different project.

Back in September, it was announced that the venue, which will include a 5,000-seat arena, would be paid for largely by the city, according to the administration of Mayor Muriel Bowser. Events DC, Washington’s semi-public stadium authority that is funded by hotel and restaurant taxes, will kick in $27 million for the facility, and the district government will contribute $23 million in funding that was already slated for redevelopment of the property, which is owned by the city. Monumental Sports & Entertainment, owner of the Wizards and the Mystics, was slated to kick in $4.5 million toward the project, and would be responsible for managing events there.

Schedule delays and cost overruns that are already coming to light have some in Washington questioning the deal. At a recent meeting of the DC City Council, some officials defended Mayor Muriel E. Bowser’s plans for the stadium, confirming that Events DC will be responsible for any costs beyond the planned $55 million. Critics on the DC council, including Chairman Phil Mendelson (D), wondered why the city had committed to shouldering so much of the constriction costs when the returns on the investment were not guaranteed, according to the Washington Post’s Jonathan O’Connell.

“Mendleson said since Monumental’s contribution of $4.5 million equated to the rent the company would pay over the 19-year lease it expects to sign, the mayor had committed to paying for the entire bill even though ticket sales will go to Monumental,” wrote O’Connell.

 “How will we make any money off of this?” Mendelson asked the project’s supporters.

Council member Elissa Silverman (I-At Large) noted that while development of Ward 8 is overdue, the money could have been spent on projects other than a sports stadium. In recent years, the city has funded a number of economic development projects dedicated to entertainment.

“Why not just give the money directly to small businesses that are in Ward 8?” asked Silverman

Deputy Mayor Brian Kenner, however, told the council that the project will bring in jobs, restaurants and shops, and new tax revenue for a part of the city that desperately needs it.

“This is something that we think is going to be much larger than just something for the Wizards and Mystics,” Kenner said.

Chairman Mendelson also raised concerns about the deadline, noting that the term sheet for the facility contained language regarding a development agreement and lease deadline of November 16th, which has still not been met. Since the deadline has passed, Monumental Sports & Entertainment is technically free to search elsewhere for a development opportunity. The company did not send a representative to speak at the mid-December DC Council meeting.

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