D.C. Commits Flagrant Foul Against Taxpayers Over New Basketball Facility

This week, Washington, D.C. Mayor Muriel Bowser announced a deal to transform the site of former psychiatric hospital St. Elizabeths, in the city’s Congress Heights neighborhood, into a practice complex for the NBA Wizards and home game facility for the WNBA Mystics.

The price tag? A mere $55 million.

Both the Wizards and Mystics are privately held teams who should be expected to pick up the tab for their own arenas, but in all too-typical fashion, taxpayers will be shouldering the lion’s share of the cost as the Washington Post explains:

In the deal, taxpayers would pay for about 90 percent of the cost of a $55 million entertainment and sports complex. The District would use $23 million from capital improvements already approved for the St. Elizabeths site and combine it with $27 million from Events DC, which is funded with hotel and restaurant taxes.

The parent company of the teams, Monumental Sports & Entertainment, will pay $5 million toward construction.

D.C. is on something of a stadium-spending-spree.  Not even a year ago, the D.C. Council approved almost $140 million for a new D.C. United soccer stadium, “including $33 million in shifts from other projects and $106 million in new borrowing.”  Since the initial deal was struck, millions more have been tacked on for potential cost-overruns, particularly for the use of eminent domain, itself a problematic tactic, to acquire the necessary land for the stadium. And the D.C. football team is also bound and determined to get its own taxpayer funded Taj Mahal.

Fans of public funding for stadiums always attest that the benefits far outweigh the costs; promising economic growth and activity that will make any investments well worth it. Unfortunately, outside of perhaps team owners and construction companies, few end up reaping those rewards. NTU has reported in the past that new sports stadiums do not increase overall consumer spending and the associated tax hikes “destroy more economic activity than stadiums can create.”

A new study from our friends at Taxpayers Protection Alliance not only confirmed this, but painted a gloomy picture for the already economically depressed and troubled neighborhoods of Southeast D.C. Their examination of NFL stadium subsidies found that “median income decreased and poverty rose substantially in counties with publicly funded NFL stadiums.”

The higher taxes and fees needed to pay off the debts that D.C. is assuming on behalf of two persistently mediocre basketball teams (and one okay, but money-losing soccer team) will only exacerbate D.C.’s already dismal business climate. D.C. is ranked near the bottom – tied with Rhode Island – as one of the least competitive business tax systems in the Tax Foundation’s 2015 index.

Taxpayers should hope D.C.’s leaders can avoid fouling out when it comes to dealing with the demands of other sports franchises.