Waste of the Day: Virginia Taxpayers Likely to Spend $1.4 Billion on New Stadium

Topline: The Washington Wizards and Capitals have agreed to move to a new arena in Alexandria, Virginia, which would cost taxpayers an estimated $1.4 billion — even though the teams’ current arena in Washington D.C. just received $70 million in privately-funded upgrades.

Key facts: The proposed new stadium for the basketball and hockey teams would cost $2.2 billion, with $819 million coming from private sources. The City of Alexandria would spend $106 million and the Commonwealth of Virginia would cover the remaining $1.3 billion, according to a study obtained by the Washington Post.

Officials say most of the funding would come from bonds repaid with revenue generated by the arena itself, with taxpayers only liable for $300 million in direct costs. Still, if more private funding were secured, the extra revenue would be available to use for key government services instead of going back into the arena.

The agreement is nonbinding and still needs approval from state and local legislatures.

For that reason, Washington D.C. is still trying to keep the teams where they are. Mayor Muriel E. Bowser said the city would be willing to spend $500 million to renovate the teams’ current home of Capital One Arena, just short of the $600 million the teams originally asked for before looking for a new location.

That’s after the teams’ owner spent $70 million of his own money on stadium upgrades just a couple of years ago

Capital One Arena was privately funded when it opened in 1997, but taxpayers spent $79 million for land purchases and construction around the site. That’s $150.3 million in 2024 dollars

Background: The Commonwealth of Virginia paid roughly $75 billion to outside vendors last year, with only five individual transactions — for core services like employee health insurance — totaling more than the $1.3 billion it will take to build a new arena, according to OpenTheBooks.com.

The City of Alexandria paid just $262.3 million to outside vendors and spent $206.4 million on its entire payroll in 2022. The city’s largest purchase that year was a $24 million contract with the Institute for Defense Analyses

It’s not chump change to the state or the city to spend $1.3 billion and $106 million, respectively, to subsidize a stadium.

Supporting quote: “We are not requiring a great deal of upfront investment, and we are not taking money away from the types of funds that fund public safety, the types of funds that fund education,” Alexandria Mayor Justin Wilson told Fox News. “In fact, it’s quite the opposite, we are generating money that we’re going to be able to use to invest in those kinds of very important roles of government.”

Critical quote: “Anyone who thinks I am going to approve an arena in Northern Virginia using state tax dollars before we deliver on toll relief and for public schools in Hampton Roads must think I have dumb*** written on my forehead,” State Senator L. Louise Lucas said on social media.

Summary: Taxpayer-funded stadiums have been a common issue across the country during the last few years. What isn’t common is for two cities to compete to see who can burn more money on a single building.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.