Wizards Facility Deal Not Perfect But a Necessary Step Forward for D.C. | Wizards Blog Truth About It.net

Wizards Facility Deal Not Perfect But a Necessary Step Forward for D.C.

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Updated: September 16, 2015

[SE-SW freeway basketball court, photo by K. Weidie]

[SE-SW freeway basketball court, photo by K. Weidie]

Public funding for sports-related ventures serves as a curious but understandable crossroads. At it sits right-leaning conservatives staunchly against wasteful government spending, and left-leaning liberals who would rather see that money serve a public good which is more clearly defined. It’s hard to deny the unique connection professional sports can make with a community. Hometown teams can be a source of pride (even in losing times), but how public dollars are used in support of these connections should be scrutinized.

Washington Wizards team owner Ted Leonsis and D.C. Mayor Muriel E. Bowser have reached a tentative deal to construct a new facility on the campus of St. Elizabeths, a relatively defunct mental hospital in Southeast D.C., per the Washington Post. The facility would serve several sporting interests—a practice center for the Wizards, a 5,000-seat arena where the WNBA’s Mystics would play their games, and a possible venue for a Wizards D-League affiliate (if they ever get one). The facility would also be open to the public for various events (sports, arts, culture, and otherwise), an underlying requirement and one Leonsis is happy to abide by in pursuit of his “double-bottom line.”

Any official deal will ultimately have to be approved by the D.C. Council. Construction would begin in 2016 and would be scheduled for completion in fall of 2018.

It’s easy, and perhaps noble, to take a stand against taxpayer dollars being used to prop up the interests of sports franchise owners. But if this deal to revitalize St. Elizabeths didn’t involve a local pro team, would the outcry against it be so vocal?

St. Elizabeths was built in 1852 on a 346-acre plot of land atop a bluff looking north across the Anacostia River toward downtown Washington and west across the Potomac River into Virginia. It sits less than a mile south of Barry Farm, home today to the famed Goodman Basketball League where NBA stars, pickup ballers, and the local community unite.

By the 1950s and 1960s the facilities at St. Elizabeths began to sharply decline due to a variety of reasons, including neglect, and the number of patients served dwindled as usage of the land changed. Today, the property is divided into an east campus owned by the D.C. government (118 acres) and a west campus owned by the federal government (182 acres). The D.C. government assumed control of the east campus from the federal government in the late 1980s.

Usage of the east campus has been limited for decades; the west campus is run by the General Services Administration (GSA), houses U.S. Coast Guard headquarters, and is set to be the new home of the Department of Homeland Security. Development efforts for the St. Elizabeths campus overall have been stagnant, while the surrounding Wards 7 and 8 have long been desperate for an anchor to spark redevelopment. Despite being a site with panoramic views of the nation’s capital that is a stone’s throw from a Metro stop (Congress Heights on the Green Line) and Interstate 295, the private sector has generally stayed away from investing in St. Elizabeths.

A 2007 Washington Post article highlighted the various complications—mainly the cost of revitalizing an area designated as a National Historic Landmark, which is why federal projects like Coast Guard and DHS facilities have been the primary drivers for any action. Of course, the DHS headquarters is a decade behind schedule and $1.5 billion over budget—something else typical of the federal government.

In the District, where vertical growth is limited by building height restrictions (which nicely contributes to aesthetics but doesn’t allow for urban density, which in turn drives up the cost of living), city builders must ensure that valuable but unused space is put to good use. In particular, either via tax dollars or corporate funds, creating magnets for development in neglected areas of the city bound by poverty are a worthwhile bet.

The Post’s Jonathan O’Connell reports that the Wizards practice facility will cost an estimated $56.3 million (the joint Wizards-D.C. press release said $55 million). Events DC, an organization dubbed as the “official convention and sports authority for the District of Columbia” and is funded by tax dollars, technically, will contribute $27 million to the project and manage both construction and the property. However, Events DC is legally separate from the D.C. government and is run more like a private company and less like a government agency. The tax dollars that fund Events DC are comprised of a 4.45 percent sales tax on hotel room charges and a 1 percent sales tax on restaurant meals, alcohol consumed on premises, and rental vehicle charges. The organization’s purpose is to facilitate tourism and encourage the type of spending with which it is funded.

Washington, D.C., set an all-time record in 2014 with 20.2 million visitors who spent $6.8 billion (a 1.9 percent increase from 2013, reports the Post). This is where half of the funding for the St. Elizabeths sports facility is coming from. The narrative about D.C. taxpayers footing 90 percent of the bill is misleading.

Fellow blogger, D.C. resident, curator of pro hoops history, and damn good pick-up basketball player, Curtis Harris (@curtismharris), weighed in on Twitter when the news initially broke: “My neighborhood school could use some investment since it’s filled with asbestos. But the Wiz need my tax dollars more, apparently.” Local pol (and also a pretty good pick-up basketball player himself) Bryan Weaver (@BryanWeaverDC) added to the Twitter machine: “The Timberwolves, Lakers, Nets, Bulls, Warriors, Portland Trailblazers all have new privately financed practice facilities. #justsaying”

The D.C. government, indeed, will directly provide funds that some believe should solely come from privatized sources. In 2012, the D.C. Council under Mayor Vincent Gray approved around $113 million to make capital improvements to St. Elizabeths—more than $80 million of those appointed funds remain available. This is where $23 million of taxpayer dollars committed by Mayor Bowser are coming from: dollars already partially dedicated to spawning commercial development. If not a relationship with the local basketball team, then what?

Perhaps claims from the official press release to “attract more than 380,000 annual new residents and visitors per year to Congress Heights and produce more than 600 construction jobs and 300 permanent jobs for both the arena and Phase I infrastructure of St Elizabeths East, with priority given to Ward 8 residents” are merely painted with PR-friendly brushes. But promises to bring 90 non-basketball related events per year, on top of Wizards and Mystics events that will span the calendar, to a neglected area near a Metro stop seems like a good way to command attention and cultivate interest from private investors who have shunned the area for so long.

Improving schools or other public services in the District isn’t accomplished solely by allocating tax dollars differently, or by clamoring that tax dollars already dedicated to city events and commercial development will continue to be spent on such. Certainly there are underlying concerns about ensuring that such improvements are set up to serve the community and not push out most of those currently living there. This is always a concern with development in any major city faced with urban plight, but especially so in D.C., which has seen several neighborhoods, including both Navy Yard in Southeast D.C. after the construction of the Nationals stadium and Chinatown/Mount Vernon near the Verizon Center, gentrify at an accelerated pace.

Ted Leonsis—the Wizards—will contribute $10 million to aid the surrounding community as well as $5 million up front toward the cost of construction (instead of paying what would equate to $22,000 per month in rent over a 19-year lease). OK, fine, he gets off with paying about the same amount he’ll pay John Wall to play basketball next season.

Developing land for professional sports action will never please everyone. Potomac Yards, just across the Potomac River from D.C. in northern Virginia, was originally where Jack Kent Cooke sought to move his NFL team into a new stadium in 1994. Ultimately both sides could not reach a favorable agreement and the plan was abandoned in late-1992. “The announcement was cause for celebration in Alexandria, where many city residents and virtually all city officials had bitterly opposed the stadium,” relayed a Washington Post article. Citizens Against the Stadium, a community group that led the fight, said the plan’s failure “is a powerful example of ordinary citizens prevailing over the powerful and greedy.”

Today, on the site of Potomac Yards, stands a strip mall featuring just about all the big box stores you could name, a large movie theater chain, rows upon rows of cookie-cutter condos, and heavy traffic almost as many days out of the year as total wins the Washington pro football team has had since 1970 (365). And now the team plays 20 miles outside of the city in a stadium nobody likes.

The moral of this story is looking for a happy medium between the needs of the community and what feeds the professional sports toys of billionaires.

Sports can play an important role in propping up cities, and it is often difficult to begin better serving a community without an anchor that facilitates development. This practice facility is that anchor and a necessary sacrifice of tax funds. Observers of this deal can’t let the big dollars of professional sports cloud the reality: A practice facility could just as easily serve Fairfax, VA, or Silver Spring, MD, leaving the campus of St. Elizabeths without much promise for progress past large, cold federal government facilities.

Tom Coburn was a Republican senator from Oklahoma who retired last January. Both socially and fiscally conservative, he was nicknamed “Dr. No” and was famous for producing his annual “Wastebook,” which highlights ridiculous examples of government waste. He was recently profiled by CBS 60 Minutes—Coburn and President Barack Obama are considered good friends, despite drastic differences in philosophy (and to the chagrin of some of Coburn’s Republican colleagues). They nonetheless found common ground in how to advance smarter government spending.

In the 2011 edition of Coburn’s “Wastebook,” he criticized the fact that $765,828 of federal funding went to the Anacostia Economic Development Corp to build an International House of Pancakes (IHOP) in my neighborhood of Columbia Heights in Northwest D.C. The funds were designated so that the IHOP could be constructed in the DCUSA shopping center and to train workers in what was dubbed an “underserved community.”

Coburn argued that Columbia Heights was not “underserved,” pointing out the presence of other big box stores that are part of DCUSA such as Target, Marshalls, and Best Buy, as well as various nearby restaurants with pricey cocktails and gourmet food. I’m not here to argue whether the funding was right but do disagree with Coburn’s designation of Columbia Heights. True to D.C. and the city’s generally earnest attempts to maintain fixed-income housing so that gentrified and newly developed areas are truly diverse—economically, racially, and otherwise—Columbia Heights is the most eclectic area within D.C. The necessity of federally funding an IHOP is eminently debatable—that this particular franchise is locally and minority-owned is why it qualified for funding—but the restaurant not only provides jobs and training, but also provides an option for relatively low-cost meals for working class people that’s not another burger joint.

No, most in the Monumental Sports & Entertainment ownership group are not minorities, but Sheila Johnson is a vice chair with Leonsis’ holding company and the first African-American woman to be an owner or partner in three professional sports franchises: the Wizards, Capitals, and Mystics. Johnson serves as president and managing partner of the Mystics and would be directly associated with the St. Elizabeths project, making clear at the press conference announcing the facility that she would keep greater community needs in mind.

Mayor Bowser also has her eyes set on what’s best for D.C. As one of her first acts as mayor, she took off the table a deal agreed-upon by a previous administration that would have provided valuable property at 14th and U streets NW (where a government building currently stands) to a private developer. In exchange, Washington would have received cash and land for the proposed site of a new stadium for the D.C. United Major League Soccer team. Bowser, even before as a member of the D.C. Council, saw the property at 14th and U as too valuable and wanted to maintain the option to use the space for affordable housing or other city needs. As mayor, she instead reached a deal for a new soccer stadium that, it could be argued, was more beneficial to the city. (Although critics will rightly point out that the soccer stadium deal will delay funds going to schools for improvements.) Bowser also listened to community outcry resulting from interest in building a Wizards practice facility in the neighborhood of Shaw in Northwest, where development is already happening and does not need the same injection that a facility would bring to St. Elizabeths and the surrounding area.

Bowser is trying to make an impact on economic development while having a track record, albeit very brief, of looking out for the interests of the city and taxpayer dollars. Leonsis has been a good tenant of the Washington’s professional basketball and hockey space. If it were another mayor and owner at the wheel, there would be major cause for concern. But with more scrutiny and checks than ever over city allocated funds and pro sports, opponents of this deal are doing more to delay progress at St. Elizabeths than they are promoting it. Using tax dollars to help fund a Wizards practice facility within city limits is not another example of government waste, rather it sets the table to help the District move forward.


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Kyle Weidie
Founder / Editor / Reporter / Writer at TAI
Kyle founded TAI in 2007 and has been weaving in and out the world of Wizards ever since, ducking WittmanFaces, jumping over G-Wiz, and avoiding stints on the DNP-Conditioning list. He has covered the Washington pro basketball team as a member of the media since 2009. Kyle lives in D.C. with his wife, loves basketball, and has no pets.