Capital One Arena, Wizards and Capitals may move to Alexandria | Why not the RFK campus?
The day after I wrote that maybe the next trend in stadium and arena development is building ancillary development as a real estate play ("Suburban stadium/arena interest a function of new, younger generations of ownership or a better real estate play?"), and that often means suburban locations where adjacent land is more easily acquired and controlled by the team, it was announced that Monumental Sports is negotiating with Virginia for a Potomac Yards location ("Lawmakers vote in favor of plan to bring Capitals, Wizards to Virginia," Washington Post).
Flickr photo by Ken Lund. After the acquisition of MCI by Verizon, the latter picked up the naming rights for the arena.The arena and revitalization of the East End. Even though I argued for years that the move by the teams to DC from the suburbs weren't the reason that the Downtown East End began revitalization, eventually I conceded that the move was a vote of confidence in urban living and commerce, and it helped reposition DC's image vis a vis the suburbs, just before residential choice trends began revaluing center cities after many decades of denigration ("Pollin: With Opening of MCI Center, 'I've Got Everything I've Ever Done in My Life on the Line'," Post, 1997, "Without Verizon Center, does Chinatown still thrive?," Washington Business Journal, 2016).
From the WBJ:
“I think that Chinatown will be fine even if the Verizon Center is moved,” said Ed McMahon, a senior resident fellow with the Urban Land Institute. “Why? Because downtown D.C. has come back to life. Because Chinatown has many other attractions and activity centers: the Museum of American Art, the National Building Museum, the new Georgetown University Extension and Graduate Center, dozens of restaurants, etc. Because Chinatown has a Metro stop and virtually all of the neighborhoods around Metro stops are thriving with or without a Verizon Center.”
Decline of Downtown post-covid changes the economic calculus. But these days with the decline of Downtown post covid, and WFH, plus the continued movement of federal agencies out of DC, DC is much less resilient economically than it was, and the loss of the Arena and its teams could be profound.
In fact, I've been meaning to write a mea culpa piece about the FBI HQ moving to the suburbs, which when DC was thriving, would have been an acceptable "loss" because the redevelopment opportunities would have been better than keeping them, even if it posed agglomeration diseconomies on the FBI and Metrorail.
It doesn't help that DC planning isn't particularly forward on thinking about how to continually boost Downtown, e.g,
-- "DC, Transformational Projects Action Planning, and the Baltimore-Washington Maglev project," 2021
-- "Boeing to move "headquarters" to Northern Virginia," 2022
-- "Could bringing premier regionally headquartered business enterprises to the Pennsylvania Avenue Corridor be key to its renewal and revitalization?," 2014
-- "Businesses moving back to the center: not a universal trend," 2015
Sports as a real estate play. It's definitely a real estate play. Today Post columnist Barry Svrluga has a good piece, "There are reasons for Capitals and Wizards to move. They’re all sad," about how this would harm DC.
Separately I'd been meaning to write about how Monumental Sports has asked DC for $600 million to rehabilitate the now 26 year old Capital One Arena, and apparently the Bowser Administration hasn't been fully helpful ("Monumental asking D.C. for $600M for Capital One Arena, sources say," Post. "Is Revamping Capital One Arena Worth $600 Million To D.C.?," DCist).
Maximizing community benefit from sports teams, because in most cases they'll get subsidized even in the face of opposition. While my position is that teams and billionaires shouldn't be subsidized, that isn't the way things work, so I've come to focus my writings on how communities can maximize the benefits they receive from these deals.
-- "Framework of characteristics that support successful community development in association with the development of professional sports facilities," 2021
-- "Revisiting "Framework of characteristics that support successful community development in association with the development of professional sports facilities" and the Tampa Bay Rays baseball team + Phoenix Coyotes hockey," 2022
DC loses out on income tax from sports. DC is at a disadvantage too, because unlike other jurisdictions, Congress forbids it from taxing non-residents. That means it can't tax day of game earnings of both home and away players ("Taxation Is the Name of the Game for Professional Athletes," Bloomberg Tax). This is worth $20 million per year off football based on a study for the Buffalo Bills, it could be more for other sports because of more events.
Offer the RFK campus as the real estate play for Monumental (although it's not downtown it's still DC). In 2018, I wrote a piece about the attempt to extend the RFK campus lease, but at the behest of the "Washington" NFL team, which has been based in Suburban Prince George's County for a couple decades.
The RFK campus is on the right. Benning Road, the extension of H Street is in the upper portion of image.It mentioned how the RFK campus planning effort by Events DC did mention an arena, but the point never got much play.
Since 2003, when I was on the board of H Street Main Street, and advocating that the group create a housing growth strategy in its retail trade area, I suggested that the RFK parking lots, especially along Benning Road, should be converted to housing and mixed use development. (Other areas too.)
In turn that would help to spur development of the Pepco power plant site, which stopped producing electricity in 2012, and Benning Road further east, and Minnesota Avenue.
If anything DC should offer this site to Monumental, recognizing that there are serious roadblocks in the way with renegotiating the lease with NPS and Congress, and the cost of extinguishing the easement currently limiting the site's use to recreation.
The fact is that centering development around an arena would be a much better play, because there would be so many more events -- the Capitals and Wizards to start, probably the Georgetown Hoyas still, maybe an arena football team again, and some games by the Mystics and DC Go Go (both which play at an underpowered facility in Congress Heights, but could add events in the summer when NBA and NHL seasons are over).
In return, as part of the deal Monumental should give the Capital One Arena building to DC.
But speaking of lack of political vision, "Mendelson aims to block DC from purchasing RFK stadium site," Washington Business Journal.
Jump starting a new revitalization plan for East of the River. Plus it could also lead to a new revitalization plan for East of the River, which I've written about over the years.
-- "Wanted: A comprehensive plan for the "Anacostia River East" corridor," 2012
-- "Waterfronts/rivers/canals as districts needing special and ongoing "zoning" and environmental review," 2022
-- "The Anacostia River and considering the bridges as a unit and as a premier element of public art and civic architecture," 2014
-- "DC has a big "Garden Festival" opportunity in the Anacostia River"," 2014
-- "A world class water/environmental education center at Poplar Point as another opportunity for Anacostia River programming (+ move the Anacostia Community Museum next door)," 2014
-- "Saving the South Capitol Bridge as an exclusive pedestrian and and bicycle bridge," 2014
Controversially, because the Park Service has more golf courses than demand, the Langston Golf Course could be redeveloped. Although the course is particularly important to local African[-American history and likely such a move would be opposed, and would also require approval of Congress and the Executive Branch, separate from the RFK situation, which is equally complicated.
Although Guardian articles show how minimal the use is of a typical golf course in a good day, fewer than 150 patrons ("Building houses on Britain’s vast, exclusive golf courses makes sense for everyone – even golfers," "London golf courses could provide homes for 300,000 people, study says").
Creating a separated Silver Line could serve the H Street corridor, the RFK campus/Benning Road, and other points in the city. It could also spur transit expansion for DC, specifically my recommendations for a separated silver line Metrorail and improvements and extensions of the DC streetcar line.
(I know this is not what WMATA is recommending, see "Blue Loop? Metro eyes possible future stops in Georgetown, National Harbor," WTOP-AM).
From the entry, based on ideas expressed in the Meissner-Layman conceptual Metrorail Expansion map just for the DC portion:
4. In the vicinity of RFK Stadium, (and presuming the truncation of the Blue Line, see below) I would route the Separated Silver Line onto the Blue Line alignment from RFK Stadium to Largo Town Center. That would put the new Oklahoma Avenue Station on the Silver Line. [Edit: Note that the current WMATA proposal would change the routing anyway, just not on an H Street alignment.]
5. At RFK, (presuming the truncation of the Blue Line) the Orange Line alignment would remain the same from Vienna to New Carrollton. But by crossing the Silver Line at this point, this would be a transfer point between the two lines, just as it is currently.The Oklahoma Avenue station, at the western edge of the RFK site, was the only station in the original plan that ended up not being built, in face of neighborhood opposition fearing the station would be the equivalent of a "park and ride."
Rather than the aerial alignment from RFK Station to Minnesota Avenue for the Orange Line, it would be replaced by a tunnelized alignment.
The cost would be justified economically by the ability to enable superior redevelopment of the RFK Stadium site.
6. Not indicated on the Meissner-Layman map, an infill Orange Line station could be built at the old Pepco generating site, providing additional service for the RFK area on the northeast. This would be a 10th station for DC deriving from a "Separated Silver Line"."Giants fans leave the MUNI headed for the park. The San Francisco Giants play the Anaheim Angels in Games 5 of the World Series at Pac Bell Park in San Francisco, Ca. October 24, 2002. Mike Kepka/San Francisco Chronicle
7. The proposed separate intra-city Silver Line leg along Bladensburg Road from H Street to New York Avenue and Fort Lincoln could be extended further into Prince George's County if Maryland is interested.This would provide Metrorail service to the New York Avenue corridor, if somewhat circuitous, and could also connect to a new infill New York Avenue station on the MARC passenger rail system ("One big idea: Getting MARC and Metrorail to integrate fares, stations, and marketing systems, using London Overground as an example," 2015).
Streetcar expansion too. The streetcar currently reaches not quite to the edge of the RFK campus.
It should be extended on the east to the Benning Road station, and as a further inducement to development a loop serving the exterior of a redeveloped RFK campus could be created, not unlike the original configuration of the Portland Streetcar linking the Pearl District (old railyard that was redeveloped to Downtown and the Portland State University campus (or the way that the Cincinnati, Kansas City, and Oklahoma City, and Tempe streetcars work in their communities)..
It should also be extended on the west at least as far as Georgetown-Rosslyn.
Proposed Gatineau light rail loop to Ottawa to serve museums and the Byward Public Market is another model for intra-district transportation.Arguably this would be duplicative, if a separated Silver Line is created, but the Silver Line couldn't provide intra-district transportation within the RFK campus ("Brief follow up to intra-district transit proposal for Tysons: Toyama City Compact City initiative (Japan)," 2020) and has already been proven to stoke economic development in significant ways, even if the service isn't particularly robust ("DC and streetcars #4: from the standpoint of stoking real estate development, the line is incredibly successful and it isn't even in service yet, and now that development is extending eastward past 15th Street," 2015,
Conclusion. Not happy about subsidizing the billionaires, but this could still be a good deal for DC, as the benefits from the ancillary development, the ability to refocus to East of the River revitalization, the ability to push the separated Silver Line concept, at least in DC, and the ability to have the werewithal to extend the streetcar both east and west, would be profound.
Sometimes subsidy makes sense, as I have argued with the Sacramento Kings (which touched off my new approach to discussing sports team subsidies) and the Amazon HQ2, given the pre-covid massive economic return experienced by Seattle.
Note that the Events DC "planning" for the RFK campus didn't include the DC planning office, as it was set up as a kind of bag job by Council separate from normal planning. Events DC didn't really do a plan, more a vision. And they were constrained by not wanting to anger NPS, so they had to focus on recreation only.
A new planning effort would be required, and it should be led by the Office of Planning. Even though they're not so great either.
One more point. With regard to the concept of the real estate play and suburban locations having more land, it's not always true, like with the RFK campus in DC, or Oakland's waterfront although rejected by the A's, how the Golden State Warriors move to the Mission Bay district of SF jump started development there, and similarly the placement of the Washington Nationals stadium in Southeast DC's Navy Yard development--definitely has stoked the area, but for food and drink, not retail.
So it depends. A lot of "old" center cities still have the space. Even if sports-related redevelopment initiatives remain controversial.
Plus the constant redevelopment of Las Vegas means tearing down stuff to build stadiums and arenas is not a big deal either.
Labels: Growth Machine/Urban Regime Theories, public finance and spending, real estate development, sports and economic development, stadiums/arenas, Suburban Sprawl Growth Machine, urban revitalization
20 Comments:
Given the vast amount of real estate development Leonis can do in Potomac Yards -- and the apparent willingness of JBG to sell that land -- I'd say it's a win.
And a moot point. DC doesn't have $600M to invest in CapOne arena.
Likewise, WMATA came out with the scare budget if we can't find $750M in change.
DC has a budget of 19 billion dollars. That's about as much as Kansas or New Mexico. That's about 25,000 per person.
There is plenty of money, but the priorities are different.
Well, WMATA doesn't pay for expansions, the jurisdictions do. Although somehow they would at least in part, with this blue line loop thing.
A separated silver line in DC would mostly be a DC cost function. And again, as you say DC has different priorities. Although some of it could be borne by the jurisdictions, especially Virginia, at least with the reconfiguration of service, no longer needing special turnarounds in DC/Maryland.
Of course, if there were to be a Bladensburg branch, that would involve Maryland money. But it wouldn't have to happen right away. In any case, a Separated Silver Line would happen long after a new arena could be built.
Although a tunneling for the Orange Line on the RFK campus and building a station at the PEPCO site (may not be necessary but could be a development inducement, requires more serious analysis than I can provide) would be on a much more accelerated time line.
This kind of stuff is why I say DC should puncture the height limit, although maybe too late now post covid effecting the Commercial Real Estate market so significantly. As the greater build out capacity would generate more property tax revenues for transit expansion.
Again, I don't see DC's elected officials having that much vision. Despite the fact that you can't be a "transit city" without transit expansion. Despite transit being a key element of DC's competitive advantage. And the leading economic development strategy for the city even if no longer recognized despite (1) all the neighborhoods served by the core network--31 stations--have or are revitalized (2) the example of NoMA Metrorail station as infill on the development of that area, (3) the $1 billion in new development spurred by the poorly situated DC Streetcar on H Street.
People wouldn't like it, but DC could also enact some sort of transit tax, especially as I think the Nationals stadium tax is near sun-setting. (But I could be wrong.)
Again, DC on its own, separate from WMATA, needs to rebuild the consensus on transit, both as key to quality of life, but also as the leading economic development strategy for the city.
It's hard to believe that people have forgot what the city was like pre 2005, as that 30 years were required from opening the Rhode Island to Farragut North segment, and the opening of the rest of the system over time, to really see the economic impact of transit. And maybe 30 years, all in all, was pretty fast to see that kind of ROI.
Certainly the speed of ROI from NoMA Station was unprecedented. It convinced me personally that when done right, for traditional center cities, transit infrastructure investment has the fastest and best ROI, especially in terms of sparking revitalization.
It was key to revaluing the residential property in a 15 minute walkshed north of H Street, spurred the redevelopment of Union Market, plus obviously NoMA (between the railroad tracks/2nd street NE and the east side of North Capitol Street), not to mention other areas adjacent like Eckington and west of North Capitol Street.
VA Gov making an announcement tomorrow at Potomac Yards.
RE: NoMA. Yep. that is basically what I mooted for your third book. I think I said how transit is necessary for urbanity, but the reality you are talking about is as an accelerant.
That area is unrecognizable now.
But very much sounds like Monumental wants to be a real estate company now, now that TV sports rights are going down in value.
2014 article in Post interview with Leonsis, when he said team is a platform.
https://urbanplacesandspaces.blogspot.com/2014/01/stadiums-and-arenas-as-enabling.html?m=1
One of the most influential books I read c. 1988 pre WWW was Maximarketing. It was about being agnostic about channels, focusing on them all, rather than zeroing in on just one. This was when I was involved in direct marketing and publishing for a non profit.
Yes, television rights are worth so much less. Although if he buys the Nationals, maybe the way to deal with Angelos is to merge the regional networks and give them a percentage but switching them to the junior partner. It's all about content. All those teams might make rights marketable still, but not stratospherically.
I don't think esports have done so much, not sure. Betting, maybe he sees better opportunities in Virginia. But i doubt it. so RE it is.
But RE isn't that easy. Kroeke already was in thst business. And a lot of team owners have been in RE. Although there are existing successes. Partnering costs money too.
I just don't see the floundering of the Wizards as an indicator of success in another line of business. But maybe I'm just a cynic.
Ted Leonsis on eventually circumventing Comcast SportsNet
https://www.washingtonpost.com/news/dc-sports-bog/wp/2014/01/22/ted-leonsis-on-eventually-circumventing-comcast-sportsnet/
https://www.bizjournals.com/washington/news/2023/12/12/potomac-yard-leonsis-youngkin-arena.html
Wow. Looks like DC gets clock cleaned. Failures by Bowser and Events DC. Totally not a surprise.
When this first happened with the ask for $600MM DC maybe should have hired Oak View Group or Anschutz Entertainment Group as consultants to help them not f* up.
C. 2006 I thought DC OP economic planners were good. I kept learning each year, they didn't And Bowser has really deemphasized OP anyway.
Sadly this may mean giving it up for the Commanders which won't have anywhere near the ROI.
Bill that could allow Commanders stadium at RFK will get first hearings
https://www.washingtonpost.com/dc-md-va/2023/09/13/rfk-bill-commanders-stadium-dc/
As Commanders eye RFK, D.C. stadium’s neighbors hope team punts
https://www.washingtonpost.com/dc-md-va/2023/10/01/rfk-stadium-dc-neighbors-commanders
https://mayor.dc.gov/release/mayor-bowser-dc-council-introduce-legislation-support-downtown-revitalization-investment
Focus on the present location not RFK. Reactive, as is typical of DCG.
Leonsis, Youngkin to make joint appearance as arena talks escalate
https://www.washingtonpost.com/dc-md-va/2023/12/12/monumental-sports-capitals-wizards-alexandria-youngkin-arena/
Renderings looks terrible.
https://dcist.com/story/23/12/13/virginia-woos-monumental-sports-capitals-wizards-potomac-yard/
I do wonder what is going to happen to capone arena. I think he owes it outright now, land is worth at least 250 million. Also unclear if the wizards practice facility is moving over.
I thought I saw a mention it's a ground lease, that DC owns the land.
Monumental, Youngkin announce deal to move Caps, Wizards to Virginia
https://www.washingtonpost.com/dc-md-va/2023/12/13/capitals-wizards-move-alexandria-potomac-yard/
again I'm playing editor here, so please take the criticism as constructive.
Fat Matt had a op-ed in the post yesterday on DC leadership failure. True.
You have an opportunity to bundle your Dec 10 piece as an op-ed on "Sports is now real estate". OK, you need a real editor to give it a snazzy title. " Maybe Good bye We Work. Welcome WePlay."
The leadership issue is less about failure to keep the wizards/caps but about having too many entertainment areas ion one city. We need to be investing in stuff that actually makes people want to live there, not just more bars and restaurant.
In my market analysis section of the Eastern Market RFP I made that point, that EM/Barracks Row competed with Union Market, H Street, Navy Yard, Wharf, and Downtown as entertainment districts. Plus Events DC proposed a food hall in a redevelopment of RFK. Plus food halls on Pennsylvania Avenue SE and I think Buzzard Point (I am out of touch with what's happening there).
The thing about RE is yes. I'm not big on these kinds of projects generally but I can see how--if done right and given it's DC it's a stretch--that it could be leveraged to drive significant improvements East of the River as well as transit expansion.
D.C. will lose more than the Capitals and Wizards if it doesn’t act fast
https://www.washingtonpost.com/opinions/2023/12/14/capitals-wizards-virginia-dc/
Editorial -- although a good example of Growth Machine argumentation
What impact could bringing Capitals, Wizards to Northern Va. have on taxpayers?
https://wtop.com/alexandria/2023/12/what-impact-could-bringing-caps-wizards-to-northern-virginia-have-on-taxpayers/
Ted Leonsis makes wonderful promises. Ask D.C. what they’re worth
https://www.washingtonpost.com/sports/2023/12/14/ted-leonsis-virginia-arena/
With sports teams primed for move to Va., downtown D.C. frets its future
https://www.washingtonpost.com/dc-md-va/2023/12/13/capitals-wizards-move-downtown-dc-worries/
https://www.washingtonpost.com/opinions/2023/12/13/wizards-capitals-relocation-dc-fiasco-mayor-bowser/
The D.C. arena fiasco shows Bowser has taken her eye off the ball
Good article by the great Inga Saffron, urban design writer for the Philadelphia Inquirer, about the proposal for the 76ers on Market Street.
They told her to go look at TD Arena in Boston, which is not Downtown per se, but at North Station.
She outlines a number of deficiencies.
And outlines alternatives, including over a railyard.
When writing this piece, I did think of the old proposal to build Nationals Stadium in the L'Enfant Plaza area, over the SE-SW Freeway.
I didn't think about it as part of the decking proposal for Union Station. Although the cost would be astounding and really wouldn't make it worthwhile to the city. OTOH, it could move the deck project forward some, get Union Station expanded, but at the cost of a lot of alternative development that could generate more revenue.
She also makes the point that even if arenas have a lot more events -- and the 76ers arena wouldn't have hockey -- there are many many nights when there are no events, and the area is dead.
And that it doesn't stoke retail all that much. That's a point I've made for years. Patrons don't do mixed trips. They go to watch the game, and eat and drink.
https://www.inquirer.com/real-estate/sixers-arena-td-garden-boston-downtown-urban-planning-20231210.html
The Sixers want to model their arena on Boston’s TD Garden. I went there to see how it works
Capital One Arena should stay where it is because it's an excellent location, and the Potomac Yard site is not. However there was a shooting last night around 8:30 before the Madonna show, vicinity of 7th/F, adjacent to arena and the Christmas Market on F between 7 and 8. I was milling about at 6th and F waiting for friends before the concert. DC fleeces taxpayers that pay the bills and coddles criminals. Twas always thus.
With television revenues significantly down, maybe 10% of what they were, now owners want to be developers of adjacent property.
rk Cuban’s Mavs sale signals big change for pro sports franchises
https://www.washingtonpost.com/opinions/2024/01/17/mark-cuban-dallas-mavericks-sports-gambling
And that raises the question of why a guy who so clearly loves his role as owner of a basketball team would sell out. And more to the point, why now? In December, the National Basketball Association approved Cuban’s sale of the majority stake in the Mavericks to members of the Adelson family, who control the gambling empire Las Vegas Sands Corp. The transaction, which left Cuban with 27 percent of the Mavs, valued the team at more than $3 billion, about 10 times what he paid in 2000. For now, Cuban will continue as the face of the Mavs, while no longer having final say on business decisions.
Cuban has been vocal, if not totally convincing, about why he sold. He sees real estate expansion, potentially into casino operations, as the future of NBA franchises. He told reporters in December, of the Adelsons: “They’re not basketball people. I’m not real estate people. That’s why I did it.”
... “I sold for all the reasons I’ve already publicly stated,” he responded by email. “Real estate and entertainment are going to be key for revenue development to compete.”
My bet is that the Mavs deal is a tell. Big league teams, which have thrived for decades by selling broadcast rights, are evolving into multifaceted business empires in which revenue derived from sports is just one facet of the operation.
... Cuban has said he thinks Texas should legalize gambling, which would enable the Mavericks to build a casino around a new stadium. This is what he means by “real estate and entertainment.” He’s not alone: In-stadium sportsbooks and betting lounges are already popping up around the nation at existing arenas. New York Mets owner Steve Cohen is partnering with Hard Rock International to build an $8 billion entertainment complex in the parking lots next to Citi Field in Queens, where the baseball team plays. (Cohen is also campaigning for permission to get into gambling in New York.) Elsewhere, real estate is key to juicing franchise value. The Golden State Warriors, for example, surrounded their new Chase Arena with a lucrative office complex. Blocks away, the San Francisco Giants are erecting a retail, residential and commercial real estate project in what was a parking lot across from Oracle Park.
Cuban didn’t need to hand over control of the Mavs to build a casino, one he and his new partners aren’t even currently allowed to develop. (Cuban has said he’s less interested in gambling than he is about the casino experience, musing about U2 performing in residence in Dallas.) Cuban easily could have borrowed to fund his expansion. And his partnership with the Adelsons could have been a commercial deal that didn’t involve team ownership. By omitting TV deals from his short list of “revenue development” ideas, Cuban is signaling that the NBA’s river of broadcast revenue might be ebbing.
https://www.audacy.com/krld/news/local/no-big-pro-team-no-problem-for-fort-worth
No big pro team, no problem for Fort Worth
3/19/24
Meanwhile, in 2023, Dickies Arena was named top venue for its size (seating capacity of 10,001-15,000) by Billboard Magazine.
The dozens of national (and international) level sporting events lead to success that shows up in dollars and cents.
"The economic impact that we've had has almost tripled since 2018," Sands adds."We're gonna hit close to $150 million worth of economic impact (in 2024) for the community through the sporting events we're hosting here."
Looking ahead, Sands expressed excitement about the upcoming events, such as the PBR World Finals, USA Gymnastics Championships, and the MLB Draft, all of which are expected to contribute to Fort Worth's thriving sports landscape.
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