ALEXANDRIA, Va. — The City of Alexandria continued its push to make a new Capitals and Wizards arena in Potomac Yard a reality Friday. The Alexandria Economic Development Partnership (AEDP) released an economic impact study that paints a rosy picture of how much money the new arena could bring in.
This is the first time we have ever released a report like this in this detail," said Stephanie Landrum, President & CEO of AEDP. "Our summary in December was released to show the community the assumptions underlying the estimations, projections, and decisions we made when putting together this proposal—and that we have considered both the fiscal costs and benefits that a project like this would deliver to Alexandria. Today’s data is largely just reinforcing that point with all the detail we can provide, in the interest of being transparent with our data."
The move comes as Alexandria and Monumental Sports and Entertainment Owner Ted Leonsis continue to fight for support for the more than $ 2 billion financing package they need from the state legislature.
AEDP posted the economic and fiscal impact study to a website touting the arena project Friday morning.
The report promised a financial windfall for the City of Alexandria and Virginia from Ted Leonsis’s proposed project. The report projects a net fiscal impact of $760 million over 30 years for the state. That’s $573 million more than the state is projected to rake in from the Potomac Yard site without the arena, according to the projections.
For Alexandria, the arena project is projected to generate a net fiscal impact of $464 million over 30 years. That’s $406 million more than is projected without an arena, according to the estimates.
Meanwhile, the study predicts the creation of 29,000 jobs statewide, with 22,000 of them in Alexandria. Those 22,000 jobs are equivalent to 14% of Alexandria’s current population.
However, officials familiar with the project dismiss congestion concerns due to the influx of all those new employees in Alexandria’s relatively small 13-mile radius. Those officials believe some of those jobs would go to people already living in the city, and the jobs would be created over time, not all at once.
The city and the state collectively would have to pay back roughly $2.7 to $2.8 billion to pay off the bonds to pay for the arena project over 30 years using future revenue from the arena. That revenue would come from a 10% ticket tax, parking and naming rights for everything but the arena itself.
But the financing plan is running into roadblocks in Richmond where Senate Finance Chair Louise Lucas is pledging to kill the legislation.
“I just don’t think it’s a well-structured project, and the majority of folks in Northern Virginia don’t want it,” said Lucas who represents Portsmouth. “I just don’t want the state's full faith and confidence to back up that project.”
The economic projections from this study did not consider any doomsday scenario in which revenues from the arena aren’t enough to repay the loan the state would take out because officials say there are enough checks and balances in their projections to ensure that would never happen.
But to be clear, if it did, Virginia taxpayers would be on the hook.
D.C. Mayor Muriel Bowser has threatened to sue Ted Leonsis if he goes through with plans to exercise a clause in his lease to leave Capital One arena in 2027 to make this move.
Monumental lawyers say that any lawsuit like that would not stand up in court.
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