CSG Recommendations for Wizards/Capitals Arena Study

Posted on by Ayesha Amsa

Recommended Questions for Local, Regional, and State Officials Regarding the Proposal to Build a New Arena for the Wizards and Capitals in Alexandria

In December, Governor Youngkin announced a deal to subsidize a new arena at the Potomac Yard Metro Station in Alexandria. All significant economic development decisions merit transparency, comprehensive analysis, and public involvement. This proposal is no different. 

We are pleased to see that Alexandria is doing extensive outreach and sharing of information with the community, but we also urge our elected officials in the region to fully evaluate the impacts, costs, and benefits of the proposed project and site as compared to retaining the arena in DC. This includes transportation, environment, demographic, tax, financial risks, and other factors. What follows are our recommended questions for decision makers:

Transportation

The current Capital One Arena sits on top of the Gallery Place Metro station with three Metro lines (Red, Yellow, Green) and has nearby access to three more Metro lines (Orange, Blue, Silver) at Metro Center, and the opportunity to use three other stations (Judiciary Square, Archives-Navy Memorial, and Mt Vernon Square) to spread crowd arrivals and departures. There is a single Metro station at Potomac Yard with limited entry/exit access and two lines (Yellow and Blue).

Sporting events and concerts tend to start around 7:00 pm. Attendees often arrive well before doors open, which means that attendees will be riding transit during peak periods. Therefore, the capacity of Metrorail will be important to understand when considering access to the arena sites.

The guiding principle for transportation in the City’s adopted North Potomac Yard Small Area Plan is to “Pursue a comprehensive multi-modal approach to transportation based on a highly walkable urban environment, minimal automobile impact, and maximum use of existing and new Metro stations.”

  1. Attendance: Knowing the projected attendance numbers is necessary to determine travel demand, mode shares, and climate impact.
    1. What is the expected capacity of the new arena and event space and estimated maximum attendance numbers for the arena and associated activities?
  1. Travel mode shares:
    1. What are the mode shares (ratio and numbers of trips) for transit, driving, carpooling, walk and bike?
      1. Current mode share at the Capital One arena? 
      2. Projected future mode shares for the new arena and event space location compared to Capital One arena?
    2. What are the current origin locations of the fan bases for the Wizards and Capitals? And how would travel times and accessibility change for major demographic groups?
    3. How many vehicles for event attendees and staff are parked in private garages around the Capital One arena during each type of major event?
    4. What is the cost of building 2,500 new underground parking spaces at the Alexandria arena complex and how much of this will be publicly funded?
    5. Will the garage be shared with adjacent daytime users to reduce total parking built in Potomac Yard?
  1. Minimizing automobile impact:
    1. Will plans for the arena retain the planned pedestrian-friendly green boulevard concept for Route 1 through National Landing (see People Before Cars principles for Route 1)?
    2. Given Alexandria and Arlington commitments to smart growth and to minimizing automobile travel in favor of transit, walking and biking, no roads should be expanded and existing roads should receive additional safety improvements for people walking and biking and using transit. Will this be the case?
  1. Transit Access and Capacity:
    1. What is the total demand, and share of demand that is event-related, via Metro and bus (all providers) during major events at Gallery Place and Navy Yard station areas? Peak Hour? Peak 15-min?
    2. What will be the estimated total demand via Metro and bus (all providers) during major events at a new Potomac Yard arena? Peak Hour? Peak 15-min?
    3. What does Metro anticipate available capacity to be for the Blue and Yellow Lines between downtown and Potomac Yard when ridership returns to pre-pandemic levels?
    4. For a specific comparison, what is the current capacity for southbound Yellow Line trains leaving L’Enfant Plaza at 5:00 to 6:00pm on weekdays? Southbound Blue Line trains leaving Foggy Bottom?
    5. How many people could be handled in the future by the Potomac Yard Metro Station, Metroway Bus Rapid Transit, and other existing bus lines?
    6. What modifications would be needed at the Potomac Yard Metro station and how much would they cost?
    7. What will be the net impact on total Metro ridership if the teams move to the new arena?

Climate Change and Air Pollution

  1. Based upon the transportation analysis, what would be the greenhouse gas emissions (per capita and total) from transportation for each location?
  2. What would be the NOx and VOC and particulate emissions (per capita and total) from transportation for each location?
  3. What would be the greenhouse gas generation from the materials and construction of the new arena as compared to renovation of the existing arena?
  4. North Potomac Yard development has to comply with the City of Alexandria Green Building Policy and the development plan from a few years ago developed a NPY Sustainability Master Plan, that had to strive for carbon neutrality and conduct an in-depth North Potomac Yard Net-Zero Carbon analysis. In addition, the Green Building Policy requires that new public buildings in Alexandria are constructed to net zero energy standards and with higher stormwater green infrastructure standards. The City just launched an update to strengthen the Green Building Policy to be more consistent with the City’s climate plan. Will the City of Alexandria commit to ensuring that the Arena-entertainment complex meets the same green building requirements as other new public facilities and that it comply with the updated Green Building Policy?  

Affordable Housing

  1. What are the current commitments for dedicated affordable housing units in North Potomac Yard and will these commitments be increased if the plan includes the new arena and event space?

Public Subsidies, Tax Base, Economy, and Metro Funding

Numerous studies have questioned the costs and value of public subsidies for sports arenas. Therefore, we recommend a fully independent analysis of the net economic benefits and costs of the new arena to the taxpayer. We compiled the following questions on the financial deal, but note that the City of Alexandria has hosted a meeting and posted information on the financial structure. This is helpful, but we would still hope to see the finances and risks thoroughly analyzed by independent experts.

We also urge the state to contribute enough funds to fully close the WMATA operating gap. If the state can afford to subsidize a sports and entertainment facility, it can afford to fund the operations of the transit system upon which the facility will depend, and upon which thousands of workers, residents, and tourists depend on every day. This would mean not just $130 million (split 50/50 with NoVA) but as much as $180 million (matched by the formula shares from DC and Maryland) to avoid service cuts, and minimize fare hikes and shifting capital preventative maintenance funds to transit.

  1. Economics and tax base in Alexandria:
    1. What is the basis for the contention in the HR&A study that there would be no redevelopment of the shopping center and two parcels southwest of the station until 2046, unless the arena were built? And in the specific case of residential development, what has changed in the high demand for residential to conclude that no more residential development will take place in North Potomac Yard over the next 20 years?
    2. What are all of the public subsidies that would be provided for the Virginia location, including infrastructure costs, debt service, and ongoing operating costs?
    3. Is there risk to the City of Alexandria and the State of Virginia if the venue revenues fall short of covering the costs of debt service, and how much financial risk and bond rating risk would there be?
    4. Will there be net revenues available for city services or will all of the tax increment go to the parking structure and debt service for the project?
    5. Who will own the new arena site and will it pay property taxes?
    6. Is the arena proposal the best way to maximize the return on the taxpayer’s large investment in the Potomac Yard Metro Station? What other options did the City of Alexandria, Alexandria Economic Development Partnership, and/or Commonwealth of Virginia study?
  2. Economics and tax base in DC:
    1. What economic impact would moving the two teams and major events to Alexandria have on DC’s downtown, its tax base, and its prospects for revitalization?
    2. What would be the net regional economic impact of moving the Wizards and Capitals and other events to the Alexandria site and the Mystics from Congress Heights to the Gallery Place arena?
    3. What are the public subsidies proposed by DC for renovation of the existing arena?
  3. Stadium Authority:
    1. What are the pros and cons of stadium authorities?
    2. Will Alexandria, the state, voters and taxpayers be giving up important oversight and control over decision making and tax authority?
  4. Performing Arts Venue:
    1. Has the City conducted a market analysis for the Performing Arts Venue? 

Meeting Metro funding needs

  1. Will Virginia provide 100% of the Virginia share to close the WMATA operating gap without having to move any funds from capital to operating, raising fares, or cutting service? (approx $180 million) In short, if Virginia can promise up to $200 million for infrastructure for the arena and $1.3 billion in state backed bonds, why can’t Virginia provide enough funding of its share necessary to fully close the Metro operating gap?
  2. Will Virginia at least match the Maryland proposed contribution ($150 million) with its relative share (approximately $130 million)? The proposed budget amendment in Virginia for Metro is $65 million, with the other $65 million expected to be paid by Northern Virginia.