Making a mistake once does not justify making it again. But it appears that the mistake the council is about to make in granting a $50 million giveaway to Washington Wizards owner Abe Pollin to upgrade the Verizon Center is similar to the one it made in agreeing to pay $611 million (at least) for a new stadium for the Washington Nationals and Major League Baseball.
Maybe members of the council believe that after such a huge giveaway to Major League Baseball, District residents won’t object to a giveaway less than one-twelfth the size to Pollin.
Well, I object.
The generic, interchangeable arguments by council members to justify both gifts espouse the financial benefits that will be realized by the District. However, I know of no concrete economic data that support those views.
The rush to give Pollin what he wants can be partially explained by feelings of indebtedness to him for revitalizing the Gallery Place neighborhood with his largely privately financed arena.
But what supporters of this $50 million giveaway often fail to mention is that the city has already paid significantly for the Verizon Center. From land purchase and preparation 10 years ago to exempting Pollin from paying property taxes on the arena, the cost for the District of the Verizon Center is $100 million and counting.
In supporting the $50 million giveaway, Council Chairman Vincent C. Gray said last month that making improvements to the arena would better equip the District to attract a first-class event, such as the NCAA Men’s Final Four basketball championship, from which we could recoup those dollars in one weekend.
Independent analyses have questioned whether there are true economic benefits to be found from spending money to attract high-profile sporting events in cities that already have a healthy convention business. But putting aside that economic question, the fact that Gray thinks the city could attract the Final Four seems to indicate how far he will go to rationalize this giveaway.
The seating capacity at the Verizon Center is about 20,000 for basketball. The Final Four has not been held at an arena with a capacity less than 40,000 in 11 years, and the sites chosen for the next four years have at least 55,000 seats. Unless Pollin plans to add 30,000 seats with the $50 million, it seems unlikely the Final Four will be coming to the District anytime soon.
From my perspective, the council needs to answer two important questions before handing out taxpayer money.
First, what exactly are the economic benefits to be expected from this or any such giveaway? Data on the benefits to cities of sports stadiums is mixed at best. And we as a society regularly require social programs to justify themselves and their efficacy. Equivalent oversight is necessary and proper for corporate giveaways to sports entities.
Second, why is the beneficiary unable to pay for what is being proposed? In many instances a private entrepreneur such as Pollin will invest in improvements even if the government turns down his request for financial help. Misplaced economic incentives rob public coffers of badly needed funds.
Abe Pollin is justly recognized for his major role in transforming the Gallery Place into a vibrant downtown neighborhood. However, the District has done a lot for Pollin, too. Until there is clear evidence about how the city will be rewarded and what sort of events we can realistically expect to attract by giving him $50 million, we District residents shouldn’t give it to him.
Jeffrey Lubbers is a graduate student in sociology at George Washington University.
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