Ted and Glenn, We Hardly Knew Ye
Ted and Glenn, We Hardly Knew Ye
The Potomac Yard sports and entertainment complex proposal implodes. From The Alexandria Times, April 4, 2024
The dramatic March 27 demise of the proposed sports and entertainment complex at Potomac Yard was a one-two information punch. The announcement that Alexandria had ended negotiations related to the project was followed immediately by news that Monumental Sports and Entertainment (MSE) and Washington, D.C. Mayor Muriel Bowser had reached an agreement in principle to keep the Wizards and Capitals in their current arena downtown for another 25 years.
The city’s role as the site for the Potomac Yard project, and as leverage or a bargaining chip in negotiations between MSE and others, revealed many things. Inevitably, more will be forthcoming, but here are some preliminary conclusions.
A Splashy Project Announcement Has Drawbacks. The elaborately produced project announcement in Potomac Yard in December 2023, complete with tent, stage, media, and political and business movers and shakers, was intended to create an atmosphere of enthusiasm and inevitability for the sports and entertainment complex.
Opponents quickly seized on the trappings of the event, and attendance by state and local elected officials, as evidence of a “done deal” completed “behind closed doors.” That criticism may be overstated.
Nothing as large as the Potomac Yard project ever becomes reality without leadership from the top and big time real estate development is not a public mass participation exercise.
The Value of Promoting Aggregate Expected Benefits Is Limited. Many of the early communications about the project emphasized its anticipated aggregate benefits expressed in billions of dollars of economic development and tax revenues and tens of thousands of jobs. Former City Councilor David Speck published a prescient letter in the Times and The Washington Post urging the withholding of judgment until the details emerged.
However, a detailed picture of what was really happening emerged in bits and pieces or not at all. Many of the details as to how the financing worked required digging. For example, Alexandria and the commonwealth’s back-up bond payment responsibilities, referred to as “contingent moral obligations,” took time to figure out.
Alexandrians Had a Great Interest in the Details. It is too facile to assign the implosion of the Potomac Yard project to a flawed legislative strategy in the General Assembly and specifically to a failure to reckon with Senator Louise Lucas (D-Portsmouth).
Project representatives did not release assumptions and methodology used to create the projections showing how the project’s revenues covered its payment obligations. Those noting the absence of a transaction term sheet describing the essential rights and duties of the parties also have a point. Nothing was revealed about the timing and maturities of the bond issuances, the range of projected interest rates, whether the bonds could be called, or similar fundamentals.
The project’s environmental impact was another area where the details mattered and an explanation of how they would be addressed was absent. Concerns include the effect of water runoff from additional areas of impervious surface at Potomac Yard, the effect of the weight of the arena complex on soil stability (a problem for the nearby Potomac Yard Metro station) and the need for toxic soil remediation.
Alexandria’s Political Position Was Weaker Than Some Expected. In the hectic General Assembly session the city’s minority representation on the board of the public authority that was to finance the project got even smaller. The slick 11th hour move by Senate Majority Leader Scott Surovell (D.-Fairfax) and others to locate the arena near a casino in Tysons Corner signaled the end of the Potomac Yard project. Alexandria’s hosting the project, effectively guaranteeing over $550 million of the bonds, and contributing $106 million in cash for a performance venue did not count for much.
Local Organizing Still Matters. The Coalition to Stop the Arena was effective; its communications, from yard signs to social and other media, were clear and timely. The coalition’s energetic supporters made their case in the right places at the right times.
The Focus on Potomac Yard and Economic Development Could Be Beneficial. If there were residents who were unaware of the importance of commercial development and reducing the city’s reliance on real estate taxes to Alexandria’s future, the Potomac Yard sports and entertainment complex experience has surely increased their knowledge of these realities.
There are high stakes in Potomac Yard’s future. It is not an accident that Potomac Yard has twice attracted, and Alexandria has rejected, transformative development proposals from outsiders that involved sports and entertainment facilities that present events attended by tens of thousands of people.
Now, the challenge is to get Potomac Yard right.
The writer is a former lawyer, member of the Alexandria School Board from 1997 to 2006, and English teacher from 2007 to 2021 at T.C. Williams High School, now Alexandria City High School. He can be reached at aboutalexandria@gmail.com and subscriptions to his newsletter are available free at https://aboutalexandria.substack.com.
I also wonder whether Alexandria's participation didn’t raise the cost for our neighbors in DC and whether there might be some better set of rules for jurisdictional competition to which our governments would abide.
Great summary, with key takeaways. The foremost question now, to which you allude at the end, is "if not that, then what?" It's not enough for Alexandrians simply to say "no" to every proposal that comes down the pike.