Numbers Don’t Add Up for Soccer Stadium Financing Scheme

is a piece by Ed Delaney, published in themail, the leading "good government" e-newsletter for DC, published by Gary Imhoff and Dorothy Brazil. Entries are produced by various involved citizens from across the city. IMO, Mr. Delaney is always a must read.

From the piece, inspired by "D.C. Council Crafting Plan to Pay $150 Million for Soccer Stadium," from the Washington Post:

If we’re going by the estimates of the DC government, the team should be drawing 38,000 this year (Post, June 30, 2005) but is in fact only drawing 29,151 per game over the first two months in its new ballpark (a figure which is likely much lower in actual turnstile counts due to the corporate ownership and rental of club seats and suites in the new ballpark). That figure is not only well below city government estimates, but ranks the city’s attendance average seventeenth out of MLB’s thirty teams, a worrisome sign for the team, since the lean months of August and September are yet to come and the team is not likely to be in the pennant race. Moreover, it stands to reason that many season ticket buyers who bought plans at the ballpark due to unknown demand and the potential for Redskins-like sellouts at a new ballpark, might now realize with the ballpark drawing under 75 percent capacity even during its honeymoon period that good seats figure to be available for the foreseeable future. Thus, the team could see a number of plans being downsized or given up entirely, as occurred after the inaugural season at RFK Stadium.

With such red flags about the uncertain stability of the team’s ticket-buying fan base, it virtually amounts to fiscal Russian Roulette to tie hundreds of millions of dollars worth of public funding for a financially dubious project (a limited use, undersized stadium for a sport with limited ticket-buying appeal compared to baseball) to the tax revenue being ripped out of the business community and poured into the stratospheric costs of the ballpark. The city might be garnering more money from their taxation scheme than it first realized; it’s hardly being transparent enough on the actual figures for the public to easily make a judgment one way or the other. But, given the failure to meet previous attendance projections by 9,000 per game in the ballpark’s opening season, it could be that every excess cent will be needed to meet unforeseen costs and economic issues that unfold over the life of the ballpark’s payment plan.
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The Post article is worth reading. Some excerpts:

1. Under the plan being developed by Chairman Vincent C. Gray (D), Jack Evans (D-Ward 2) and Marion Barry (D-Ward 8), the 27,000-seat stadium would be included in a larger, mixed-use development at Poplar Point, a 110-acre swath of parkland along the Anacostia River. The site is across the river from the Washington Nationals' baseball stadium.

The city would finance construction bonds with excess tax revenue being collected by the District to pay for the baseball stadium. D.C. United would be responsible for paying for any costs above $150 million, according to the sources, who spoke on condition of anonymity because the plan is still being finalized.

2. The three council members have said they must act soon to keep the soccer team in the District. Team owner Victor B. MacFarlane has been talking with Prince George's County officials about moving the franchise to Greenbelt or New Carrollton if the District is unwilling to help build the stadium.

3. "I just don't think we should be an ATM for sporting authorities, unless they can make a compelling case to me," [Councilmember Mary] Cheh said.