UPDATE, 3:02 p.m. - Includes comments from Ward 2 Councilmember Jack Evans.
Capitals, Wizards and Verizon Center owner Ted Leonsis is already the most-beloved franchise owner in D.C. The Lerner family's Nationals have yet to prove themselves, D.C. United has slipped under Will Chang, and Dan Snyder, well... is Dan Snyder.
And why wouldn't Washingtonians love Leonsis? The Capitals are the city's best team, and he's managed to keep the Wizards (somewhat) interesting by promising to do the Dougie if the team sells out a game. Heck, he's even keeping the city budget afloat.
Huh? At a Washington Post conference featuring all of the local owners Tuesday, Leonsis said 10 percent of the city's revenues were generated in the area around the Verizon Center.
Downtown D.C. has been revitalized over the past decade, and that the Verizon Center and other major developments played a role in the turn-around. But is one-tenth of the money in the city’s coffers really coming from the area surrounding the sports arena?
Leonsis, who also owns the Capitals and made his fortune as a top executive at AOL, didn’t exactly define what area he was referring to and a spokesman for his company, Monumental Sports & Entertainment, never clarified his remarks and never sent us an ultimate source for Leonsis' claim. (We'll update this item if we hear back.)
The logical government source for the data didn’t know where it was. “The only taxes that can be determined by area are real estate taxes,” said David Umansky, a spokesman for the office of the chief financial officer. “I don’t want to say it’s made up, but we don’t know where they’re getting it.” Looking at property taxes wouldn’t give much of a picture either -- according to Umansky, they make up less than a third of the district’s revenue.
The District’s Downtown BID does know. In their 2009 State of Downtown report, the nonprofit (which is funded by business owners within its boundaries) said that 15 percent of the city’s tax revenue came from the area included in the BID -- about 2 percent of the District’s total land. Is that the “area surrounding the Verizon Center?” The BID’s territory stretches from Massachusetts Avenue NW to Constitution Avenue NW and from 16th Street NW to New Jersey Avenue NW, which seems too large.
Karyn LeBlanc, the communications director for the BID, also sent us an internal study it did estimating that in 2011, economic activity within seven blocks of the Verizon Center would generate $355 million in taxes. That comes out to only 7 percent of the District’s projected $5 billion in revenue for 2011.
Keep in mind, the Downtown BID exists to promote economic activity downtown, so they have incentive to make things look as shiny as possible. The reports are based on work done in-house and by two consulting firms -- Economic Research Associates and Aecom. That said, there’s no official government data to contradict them, either.
Ward 2 Councilmember Jack Evans, who represents the area that includes the Verizon Center and chairs the committee on finance and revenue, didn't have hard numbers, either, but said Leonsis' point held.
"The construction of the Verizon Center has produced a wealth of taxes for the city," Evans said. "I think he's not off-base in saying that."
There’s a second question here. How much did the Verizon Center have to do with any revival of downtown? The economic impact of stadiums is a much-contested topic. While downtown might be thriving, the area around Nationals Stadium has entered a much-hoped for Renaissance just yet. The general consensus among researchers seems to be that when coupled with a true urban renewal plan, a sports stadium can have a big, positive impact. (The Verizon Center's neighborhood has seen plenty of other development, including a new convention center near Mount Vernon Square.) If it's built solo, it often ends up just replacing other entertainment spending.
Evans -- who also wants to lure the Redskins back to the District -- said the Verizon Center stands as a counterpoint to studies indicating sports arenas don't spur economic development. Unlike office buildings or other types of development, the Verizon Center made a "living downtown" that has people coming and going on nights and weekends.
Let's sum up: There's no official data backing up or disputing Leonsis' statement. A larger area around the stadium generates 15 percent of the city's tax revenue, while a smaller one generates only 7 percent. And those numbers come from a group with an interest in promoting downtown business. Without clarity on what area he was referring to from Leonsis, we don't have much choice other than to admit we have Insufficient Evidence to Rule.