IYER: Sports stadiums should offer more benefits to Virginia residents – The Cavalier Daily
Last year, Gov. Glenn Youngkin announced that the Washington Capitals and Wizards would move to Alexandria in an ill-fated $2 billion deal to create a sports stadium and entertainment district in Northern Virginia. More than 30,000 new jobs would have been created in the Commonwealth if Governor Youngkin had followed the advice of many economists and politicians to rework the agreement. However, after a bitter battle with the Legislature, the financing agreement between Youngkin and Monumental it fell through, and the Washington Capitals’ Arena will remain in D.C. until 2050. The fallout between Governor Youngkin and the legislature must be closely examined so that similar projects that produce benefits for the Commonwealth can be successful and avoid the myriad of concerns of financing that bogged down this project.
The project’s first failure was the uneven distribution of costs. This misstep unduly burdened Virginia residents while absolving Monumental of its implied financial responsibilities. The project in its current state would have been financed in $2.8 billion in state bonds, which would have placed a large burden on citizens to invest in the future of the project. In contrast to this outsized contribution from residents, the Monumental Corporation allocated only $400 million to invest in the stadium’s construction, almost 7 times less than Virginians were expected to contribute. Here is the first sign of financial mismanagement and misplaced priorities.
Given the disproportionate distribution of funding, the State would have to redirect funding from other essential — and underserved — legislative priorities. For example, rural Virginia has long had poor transportation infrastructure, with the region Suffering nearly 2.5 times more traffic deaths than other regions in Virginia. However, the Monumental project would have made it necessary to distribute money to develop the Greater Alexandria area transport before project completion. Instead of prioritizing existing projects that expand passenger rail across rural Virginia, the sports stadium project would have reallocated $200 million in state funds to promote infrastructure in Northern Virginia. While this may have benefited the project, it would have been at the expense of rural development. Given the stark urban-rural development divide, Virginia politicians must ensure that future projects are not undertaken at the expense of rural communities.
Furthermore, future agreements should avoid exploiting workers in the way that the Monumental agreement would likely occur if successful. Throughout his tenure, Youngkin repeatedly antagonized unions through their efforts to repeal collective bargaining and pro-right-to-work policies. This proposal was no different. Union leaders in Northern Virginia sounded the alarm over a laundromat list of concerns about project financing and its impacts on union work. Specifically, the American Federation of Labor and the Congress of Industrial Organizations stated that the proposal would have produced low-wage jobs that did not meet current labor protections. In fact, these labor concerns seemed so blatant that the united Democratic opposition denied a hearing for the proposal due to Governor Youngkin’s failure to comply with labor leaders’ demands. Future proposals cannot fall so glaringly short of creating competitive and humane jobs.
The need 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 workers’ rights seemed to suggest that the glittering economic returns promised by Youngkin would not be distributed equitably. If Youngkin had made some concessions to the Democratic-controlled legislature, the proposal could have protected the interests of Virginians while providing an economic boost to Northern Virginia.
Previous stadiums in other states show that Virginia has the potential to succeed in such a construction project, provided proper measures are taken. In Nevada, for example, private funds encompassed a greater proportion of financing in the development of the Las Vegas Raiders stadium. Additionally, the Nevada state government has proposed a hotel tax that would primarily affect out-of-state people, rather than using bonds to finance the project. With a calculated move designed to maximize the benefits of the stadium while protecting taxpayers in a similar way to Nevada, Virginia could have reaped the rewards of the stadium without any of the risks.
Sports stadiums can be a symbol of community and serve as a boost to the state’s economy. But ultimately, although the stadium project could have provided long-term economic benefits, growth, the numerous financial issues and problems surrounding workers’ rights were ultimately too great to make it a worthwhile investment. Future politicians should analyze other states’ successes on similar projects and work in a bipartisan manner to prioritize citizens’ concerns over business interests.
Arjun Iyer is an opinion columnist who writes about politics for The Cavalier Daily. He can be contacted at opinion@cavalierdaily.com.
The opinions expressed in this column are not necessarily those of The Cavalier Daily. The columns represent the opinions of the authors only.
