We are proud to share our vision for this project and remain committed to engaging the community to provide transparent and accurate answers to your questions.
Unfortunately, there are already plenty of misconceptions and incorrect assumptions about this opportunity flying around.
Let’s put some misconceptions to rest.
Myth: Taxpayers are paying for a new arena in Alexandria, Virginia.
Fact: There will be no new taxes on state or local residents, and no existing taxes will be diverted. All tax revenues dedicated to the arena will come from sales taxes generated on-site, from tickets, for example.
Fact: This project features a significantly higher percentage of private financing than other stadium and arena projects. Other stadium projects have relied on new or more widely-applied taxes.
All of this makes this project really different from other economic development projects, including many sports arenas around the country, which often receive large cash payments from state or local governments or rely on hotel/motel and new food/meals or sales taxes to become reality. You’ll see that this project has by far the highest percentage of private funding, the lowest amount of upfront state cash, and of course, this is the first time that any locality has had the chance to bring in two major league franchises at one time.
Myth: This project imposes new taxes on Alexandria residents and businesses.
Fact: Nope. This project is unique in that it creates no new taxes at all. Funding will come from lease payments from the team as well as existing taxes on new activities that happen in the arena, as well as other revenue sources connected to the district, like naming rights.
Myth: If the project doesn’t work out, taxpayers will be stuck with the bill.
Fact: False. The project’s financial terms are modeled very conservatively to put the Commonwealth and City of Alexandria in a strong position, meaning the revenue projections used are 2-3 times what is needed to pay off debt from construction. The Commonwealth/City are each providing a Contingent Moral Obligation (“CMO”) for approximately one third of the Authority debt. A CMO is a commonly used bond structure to support revenue generating projects that can pay their own debt service, but benefit substantially from the Commonwealth’s and the City’s credit ratings. The CMO is structured to not be drawn, and is a prudent financial decision in order to reserve direct borrowing capacity for activities that aren’t revenue-producing such as schools, state buildings, and maintenance projects. The Commonwealth’s CMO of both bonds will not impact its AAA ratings.
Myth: This project will cause traffic problems in the neighborhood.
Fact: We are completely aligned with the community in our goal to minimize the impact on surrounding neighborhoods. Simply put, this project only works if guests can get to and from the arena and entertainment district easily and quickly. We don’t want our guests parking in front of your house any more than you do.
Before this project was even announced, a preliminary transportation analysis was completed. Now, a nationally recognized transportation engineering firm (Kimley-Horn) is creating a world class transportation plan for the area. We will seek community input on that plan before it is finalized.
Our goals with the transportation plan are centered on:
- Protecting neighborhoods
- Transit and non-vehicle utilization
- Getting game/event traffic in and out as quickly and safely as possible
- Investing in Route 1 multi-modal upgrades (including DASH buses, lane adjustments, and transportation technology improvements)
We start with a few key assets including several thousand existing parking spaces in the area, plans for a new underground parking facility, and most importantly, a brand new Metro station just steps from the proposed arena site. The partners are also thinking creatively about innovative solutions including Virginia Rail Express and Amtrak connections, bike routes, carpool and rideshare optimizations, shuttles, and even water taxis along the Potomac.
We expect that there will be several hundred million dollars invested in transportation upgrades, which will pay dividends for residents and local businesses even on days without games or events.
Myth: There is no protection for taxpayers if the owners decide to move the teams.
Fact: There will be a 40-year agreement between the teams, state and city that includes a non-relocation agreement and mandated lease payments for 35 years after opening. There are protections that would also force Monumental Sports and Entertainment to repay all the remaining bonds should they leave early.
Myth: This project will be bad for workers and unions will be cut out.
Fact: The partners behind this project are committed to fair wages and benefits and safe working conditions. It is expected that the labor agreement used for Amazon HQ2 right up the road from Potomac Yard will be used as a model for the construction handled by Sports and Entertainment Authority. That agreement was widely considered to be one of the most robust labor agreements in Virginia. Furthermore, Monumental already employs union workers in its current facilities and intends to continue to do so.
Myth: This project will raise housing costs for Alexandrians.
Fact: This project will add housing in Alexandria, creating less pressure on overall housing costs in the market. In 2020, the City of Alexandria set a goal of producing 2,225 workforce affordable housing units by 2030, so far it has produced just 347 (15% of goal). The new district will deliver over 5,000 new housing units in Alexandria, including many two and three bedroom family-sized units. New units in Potomac Yard will be workforce affordable, serving Alexandrians who earn too much for housing subsidy yet too little to live in high opportunity neighborhoods at rents they can afford. JBG SMITH has a proven track record of working with the City of Alexandria, its affordable housing community, and state leaders to preserve affordability and prevent displacement in the City and across the region. In addition to new units being created and units preserved off site, the project will create at least $25 million in new funding for the City’s Voluntary Monetary Affordable Housing Contribution Fund.
Myth: The proposed arena site development moves the Wizards and Capitals further away from their core fan bases.
Fact: The new proposed arena is 4.5 miles from Capital One Arena. Because of its location on the Blue and Yellow Metro lines, no fan would have to transfer more than once on game days. Further, 44% of the Wizards and Capitals ticket holder base lives in Virginia, more than DC or Maryland.