Last year, Governor Glenn Youngkin announced that the Washington Capitals and Wizards would move to Alexandria in an ill-fated two-billion-dollar deal to create a sports stadium and entertainment district in Northern Virginia. Over 30,000 new jobs would have been created in the Commonwealth had Governor Youngkin taken the advice of many economists and politicians to rework the deal. However, after a heated battle with the legislature, the financing agreement between Youngkin and Monumental fell through, and the Washington Capitals’ Arena will stay in D.C. through 2050. The fallout between Governor Youngkin and the legislature should be closely examined so that similar projects which produce benefits for the Commonwealth can be successful and can avoid the multitude of financing concerns that bogged down this project.
The project’s first failure was its inequitable distribution of costs. This key misstep unduly burdened Virginian residents while absolving Monumental of their implicit financial responsibilities. The project in its current state would have been funded by $2.8 billion in bonds from the state which would have put a large burden on citizens to invest in the future of the project. In contrast to this outsized contribution from residents, Monumental Corporation allotted only $400 million for the investment in building the stadium, almost 7 times less than what Virginians were expected to contribute. Herein lay the first hint of financial mismanagement and misplaced priorities.
Given the disproportionate distribution of funding, the state would have had to redirect funding from other essential — and underserved — legislative priorities. For example, rural Virginia has long had poor transportation infrastructure, with the region suffering close to 2.5 times as many traffic fatalities as other Virginia regions. However, the Monumental project would have made it necessary to allocate money to develop the Greater Alexandria area’s transportation before the project’s completion. Rather than prioritizing existing projects that would expand passenger rail throughout rural Virginia, the sports stadium project would have reallocated $200 million in state funds to advance infrastructure in Northern Virginia. While this may have benefited the project, it would have come at the expense of rural development. With the stark divide in urban-rural development, Virginia politicians must ensure that future projects do not come at the expense of rural communities.
Additionally, future deals should avoid exploiting workers in the way that Monumental’s deal was likely to do had it succeeded. Throughout his term, Youngkin has repeatedly antagonized unions through his efforts to repeal collective bargaining and pro-right-to-work policies. This proposal was no different. Union leaders in Northern Virginia sounded the alarm with a laundry list of concerns about the financing of the project and its impacts on union labor. Specifically, the American Federation of Labor and Congress of Industrial Organizations stated that the proposal would have produced low-wage jobs that failed to satisfy current labor protections. In fact, these labor concerns seemed so egregious that the united Democratic opposition denied a hearing for the proposal due to Governor Youngkin not meeting labor leader demands. Future proposals cannot fall so egregiously short of creating competitive and humane jobs.
The imperative for jobs that paid sustainable incomes was amplified by the fact that the proposal was largely funded with taxpayer money. However, the potential exploitation of worker’s rights seemed to suggest that the glowing economic returns promised by Youngkin would not be equally distributed. Had Youngkin provided some concessions to the Democrat-controlled legislature, the proposal could have protected the interests of Virginians while also providing an economic boost to Northern Virginia.
Past stadiums in other states show that Virginia has the potential to succeed at such a construction project, provided that proper measures are undertaken. In Nevada, for example, private funds encompassed a larger proportion of funding in developing the Las Vegas Raiders stadium. Moreover, Nevada’s state government proposed a hotel tax that would primarily affect out-of-staters instead of using bonds to finance the project. With a calculated measure designed to maximize the benefits of the stadium while also protecting taxpayers in a similar way as Nevada, Virginia could have reaped the rewards of the stadium without any of the risks.
Sports stadiums can be a symbol of community and can serve as a boost to the state’s economy. But ultimately, while the stadium project could have provided long-term economic growth, the numerous financing issues and problems involving worker’s rights were ultimately too great for it to be a worthwhile investment. Future politicians should analyze other states’ successes in similar projects and work in a bipartisan manner to prioritize citizens’ concerns over corporate interests.
Arjun Iyer is an opinion columnist who writes about politics for The Cavalier Daily. He can be reached at opinion@cavalierdaily.com.
The opinions expressed in this column are not necessarily those of The Cavalier Daily. Columns represent the views of the authors alone.
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