RICHMOND, Va. — Gov. Glenn Youngkin's plan to bring a $2.2 billion arena to Alexandria is getting some pushback, and there are questions about who exactly is footing the bill.
Opponents against the move of the Washington Capitals and Washington Wizards to suburban Virginia said the price would fall on taxpayers. However, a spokesperson with Youngkin's office said it would be a combined public and private partnership.
Here's a breakdown of Youngkin's estimates.
- 72% from Monumental’s upfront direct investment ($400 million), $1.1 billion in team lease payments over the 35-year lease term, and $3.8 billion in project revenues (underground parking, district naming, advertising rights, and a newly implemented ticket tax)
- 11% from the on-site incremental taxes of the Commonwealth, that otherwise wouldn’t exist
- 17% from the on-site incremental (new) taxes and an upfront investment by the City
According to the proposed plan, funding for the arena would result from direct investment from outside sources and taxes generated from within the arena.
It's a financial model that's unlike anything economists have seen before.
"This is without a doubt the greatest public subsidy for an arena I believe in the history of the United States," said Peter Shaw, TCC, Professor Emeritus of Business Administration.
Shaw said the current proposal uses corporate, income, and sales tax generated inside the arena to pay off the debt of the $2.2 billion project.
Some state legislators have pointed to the tax dollar payments as a burden to those who live in the Commonwealth.
"Everybody agrees that this is not a good idea for Virginia and we are not going to let billionaires build their fortunes on the backs of taxpayers' dollars," said State Sen. Louise Lucas.
None of the funding plans are finalized, as both the House of Delegates and the Senate must agree to the governor's plan.