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Should You Be Funding Sports Facilities? By William Reed



By William Reed

Publicly financed sports stadiums are a game that taxpayer lose. When a government spends millions of dollars on a stadium where do you think that money comes from? District of Columbia Mayor Muriel Bowser has announced a new $55 million arena for Ward 8 that will serve as the home court for the Mystics and practice arena for the Wizards. The new 118,000-square foot 5,000 seat arena will be located on the St. Elizabeth’s East campus on Martin Luther King Jr. Avenue SE. The District government and Monumental Sports executives say they expect the project to generate $90 million in economic impact and create more than 600 construction jobs and 300 permanent jobs. They say priority for those jobs will be given to Ward 8 residents.

Monumental Sports & Entertainment is headed by Theodore John Leonsis, a billionaire venture capital investor, filmmaker and former America Online (AOL) senior executive. Monumental Sports & Entertainment owns and operates the Washington Capitals (NHL), Washington Wizards (NBA), Washington Mystics (WNBA) and Verizon Center. Leonsis owns a $20 million 13-acre estate in Potomac, Maryland. Leonsis’ 20,000-square-foot estate was once the home of Joseph P. Kennedy and summer home of Franklin Roosevelt.

“With this new development, we are driving private investment to the St. Elizabeth’s East campus, boosting the local economy, creating hundreds of jobs, and putting more District residents on their pathways to the middle class. This is a huge win for the District and yet another sign that Washington, DC is a city on the move,” D.C. Mayor Muriel Bowser said in a statement. But, surely citizens should be nervous about the $55 million joint venture. The arena is to become a practice facility for the Washington Wizards, home court of the Washington Mystics, whose President and Managing Partner, is black billionaire Sheila Johnson; and a premier entertainment venue operated by Events DC. Events DC “is the face of conventions, sports, entertainment, and cultural events offered by our nation’s capital” says Events DC President and CEO Greg O’Dell.

Is this arena east of the river an investment Washingtonians should consider “good”? Fans of Washington sports teams have local pride which local politicians try to tap into by building new sports facilities. In the early days nearly all new sports facilities were privately financed, but in recent years, the trend in stadium financing has moved toward taxpayer subsidies for construction or renovation.

Citizens feel a special bond with their teams and share in a sense of civic pride when they are successful. Sports teams are a strong source of civic pride which has brought an increase in taxpayer-subsidized stadiums. Stadium subsidies can come in the form of cash payments, infrastructure improvements, and operating cost subsidies Over past years, taxpayer subsidized stadiums have grown in size, scope, and cost. Claims that taxpayer-funded stadiums recoup their costs and more in the form of economic development are regularly dismissed. Over the past years of academic research there’s been no finding of a significant relationship between investments in sports stadiums and noteworthy job or income growth.

What’s in it for us? Is a question Washington voters should be asking? In this arena-project venture the mayor and Events DC claim it will bring positive benefits such as the creation of construction and permanent jobs. Near the stadiums, jobs are also created in local shops, restaurants, hotels, and in the transportation industry. It’s argued that stadiums help create new small businesses in the vicinity of the stadiums, which increases property values and the city’s tax base. New stadiums can help revitalize downtrodden neighborhoods or city centers, attracting tourism and business investment. The increased tax base allows the cities to pay off the stadium subsidies.

Where is the vision Mayor Marion Barry displayed when he demanded that minority contractors build the multi-million-dollar Reeves Center. Although the government used, or plans to use, public money to build the Nationals’ baseball stadium, pending soccer facility and Wizards’/Mystics’ arena, it’s a poor use of taxpayer dollars to subsidize rich team owners unless construction, contracting and vendor opportunities are made available.

William Reed William Reed is publisher of “Who’s Who in Black Corporate America” and available for projects via

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