Thursday, June 26, 2008

"Team Set Me Up" - DC United Stadium Plans getting turfed out



DC United has been petitioning the DC Government for a stadium of their own. The primary team owner, an urban real-estate developer, made some promises to build the stadium, in exchange for some contracts. Well, he didn't win the contracts (more DC contract boondoggles?) and now wants to take his stadium deal off the table, and wants the city to bankroll it. A tale of money, property, development, and the wonders that is the Local Government.
I've been following this locally, and it has a several twists and turns.
Initially, the majority owner of DC United (a San Franciscan by the
name of Victor McFarlane) offered to build the stadium with his own
money, if he was allowed to develop the surrounding area. However, he
lost the contract on the development of the area (which is slated for
mixed-use retail/office space) and he has since been claiming that the city
needs to build the stadium. Stadiums in other cities have been built
for $100MM or so, DC is offering (weakly right now) $150MM, and he is
claiming they need $225MM for their stadium.


Poplar Point

The location of the new stadium is an area of SE DC called "Poplar Point". As the picture shows, it's jammed in between the Anacostia freeway, the South Capital St. Bridge, and the 11th St. bridge. In other words, while it is served nicely by a combination of freeways and metro stations, it is still termed "Centrally Isolated". The MCI center was smack in the middle of downtown, and the Nationals park is on the waterfront

Other stadiums like the MCI center downtown (hockey/basketball) and
the new National stadium (baseball) in SE are able to meld into the community
(the baseball one is a very big question mark as the area down near
the old navy yard was special in its own way).

The Post article which nailed the reason for the concern was Mark Fisher's article where he used the number: 35. This is the number
of home dates that are played by DC United. When you do the math, and you look at the return, each home date will need to bring in $320K worth of revenue. I'm basing this on $225MM cost and 20 years to pay it back (which may be too long. Many owners start whining when their stadium is ten years old). In this term, they are correct. We haven't even discussed the environmental issues surrounding the open parkland, though personally the place has always been a no man's land - near the water, but so close to nothing, and it's ideal for noontime trysts from the local military bases.

Councilman Jack Evans (the one who made the Nats stadium happen) will probably make a good run at getting this going because
he has two agendas - he wants to see the Anacostia development go
through and work and he thinks the mixed use idea can be made to work
again. Second, and more importantly is he wants everything out of the
old RFK stadium because he wants to level it and tempt Dan Snyder into
bringing the Redskins back into the city. RFK is there, and DC United
will get trampled the first whiff of the Redskins moving back.

Victor MacFarlane, primary owner of DC United, has been running into some financing issues recently, most notably in Southern California with CALPERS. They had to get bailed out by Dubai money. Struggling real estate market + lack of contract to build retail/office space = no money for stadium from Victor.

The best part - Councilman Marion Barry is in the mix!! You can not be denied
the political enjoyment.

9 comments:

Sarah said...

Wow I actually didn't know any of this. I should keep up with the local news more often. I remember when the Nats stadium was being built my dad was talking about the possibility of getting a new stadium for United too, but that's it.

Side note: The new Nats stadium is fantastic. Although I haven't actually been there since it's been completely finished, I had to wear steel toed boots and a hardhat when I went.

Eladio said...

The new Nats stadium also caused a stir (from a Marc Fisher article) when the owners decided to fine the city $100,000/day, as they said the stadium was not finished by opening day 2008 as was previously agreed to. This will be going to court, as the definition of "finished" will be debated soundly. (The stadium was open and they played games on opening day, but the ownership is saying that things like their offices weren't finished by opening day; thus the stadium wasn't finished.) As everyone knows, DC's finances are completely shite to begin with, and for every $100k they have to give to the Nats owners, that's less money they can give for a new DC United stadium.

I'm still not convinced the new Nats stadium in Anacostia is a great idea, tho if that area comes back like Chinatown area did downtown after MCI/Verizon center, it might be worth it on a city/development basis. (Tho I debate whether the new downtown area is really "improved". Sure there's a bowling alley and a Gap there now, but you'd be hard pressed to find a chinese restauranat left in Chinatown.)

To say that a soccer stadium will prompt develoopment is ludicrous, in my mind. I say put the new soccer stadium where the old convention center is downtown, throw a couple no-show jobs to this Cali hustler/developer/owner, and split the cost with the city. At least that's what I'd propose if I was running this sit-down.

@Mike: Where in that image is the new Nats stadium? I know it's the other side of the river...but south of the navy yard?

mighty said...

this blog entry is written by a person who is truly misinformed about the subject.....
please do a little more research...

to say that the owner wants the city to pay is just flat out wrong...

Keith said...

I'm getting tired of billionaires asking for citizens to pay for their stadiums. After all, what the crap are we paying admission for?

MoonshineMike said...

@eladio: Personally, I'm not fully 100% convinced on the Nationals Stadium was in the right location, and I am with you on the $100K/day over the finishing. I think the Nationals are being overly petty, and they should be given a beat down.The 'stadium' in that old pic is over the S. Capital St. bridge, but in a pile of brown which I assume is dirt.

MoonshineMike said...

@mighty: Let's go over it. MacFarlane first offered to pay for the stadium, if his company could build the surrounding development. When they lost the bid, he started hemming and hawing. Now, it may be that they are backpedaling some because his development business is having a tough go right now.

Read the Fisher column again. I also listened to him discuss this on the radio a few weeks ago and came up with the same opinion.

Now those pushing the stadium are currently business owners down in Anacostia, who could use anything to help them out.

Also, the other point is the amount of money. When soccer stadiums in other cities get built for $100MM, and DC United claims they need $225MM, you wonder if the end product is going to be glorious or if they need that much extra to pay everyone off in DC.

Personally, the environmentalists are going to be the first line of opposition on the stadium.

Sarah said...

About the owners refusing to pay: What the city should really do is just close the stadium doors. If the owners won't pay rent, just don't let the team play. Would solve the problem pretty quick.

Stan said...

@Mike,

It's not as clear as that. Pro-stadium people, and Bruce Johnson's bloog on WUSA9, say it's for "infrastructure"--which brings to mind things like roads and power and sewers that it is basically as city's job to provide.

What the truth is, I'm not sure we know.

On the other issue, I don't think it's ludicrous at all to think a soccer stadium could bring development. Getting the stores you want to come to the project won't be easy, and will be all the harder if you don't get something more unusual to bring people that are used to staying in Ward 2 (and the suburbs) out to Ward 8. People who support city funding 100% of the baseball stadium but not a much lower percentage of the soccer stadium project at a quarter of the cost usually come from a perspective of narrow-mindedness.

Stan said...

"Read the Fisher column again."

The problem is Fisher has no idea what he's talking about, and is damn fool enough to think that by opposing the soccer stadium he and his friends can make the whole place a pristine e-topia that it never was and never will be.