The Virginia General Assembly is working on legislation that may bring the newly renamed Washington Commanders to Northern Virginia. The NFL team is currently based at the aging FedEx Field just outside Washington, D.C., in Maryland, and the team has approached Virginia legislators about potentially building a stadium in the commonwealth. Both the House of Delegates and the Senate have passed bills that would grant a football stadium authority to finance construction of the stadium; now, the chambers are evaluating each other’s bills, which have significant differences in tax incentives offered to attract the team.
“I would love to have a professional sports team and a football team in Virginia,” Governor Glenn Youngkin told The Virginia Star on Thursday. “We’ve got a Senate group and a House group in discussions in order to bring a very thoughtful bill to me. I believe that my job is to represent Virginia taxpayers, and so we’ll do a good deal. I just want to make sure that what comes out of the House and Senate gives us the capability to do a good deal because I sure would like Virginia to be the best place to raise a family, live, work, and have a professional sports team.”
Virginia already has a baseball stadium authority, which the legislation would expand to include football.
The football stadium authority would construct the stadium, rent the grounds to the football team, and enter into agreements with local government. Financially independent from the Commonwealth of Virginia, the authority would protect taxpayers from liability by seeking financing from private entities. To help pay off debt, the House and the Senate bills allow the authority to retain some of the taxes from the stadium itself that would otherwise go to Virginia’s coffers.
Separately, the football team would build a nearby campus with hotels, offices, and restaurants. That property would still be subject to normal taxes, and those revenues are the major incentive for Virginia politicians.
A key question in the debates over the legislation is over how many tax breaks the authority should get.
“I do think that how we creatively use tax receipts from a new development is a very creative way to how to finance a football stadium, but also the development around it. And so that’s something that I will look forward to discussing with both the Senate leadership and the House leadership. Because in order for us to actually have tax receipts, we need to have a football team,” Youngkin said.
On Tuesday, the Senate passed its version of the bill with bipartisan support, 32-8. That bill allows the authority to keep sales tax revenues from the stadium, corporate income taxes from the football team, and 4.25 percent of personal income taxes from people employed at the stadium. It also allows the authority to enter into up to $1 billion in debt for 30 years. According to House Finance Chair Barry Knight (R-Virginia Beach), the team helped craft the original draft of the Senate bill. Senators implemented some changes to the bill, including eliminating an authority for localities to take land by eminent domain.
“This bill does not create any debt backed by the commonwealth,” bill sponsor Senate Majority Leader Richard Saslaw (D-Fairfax) said in the Senate Tuesday.
He said, “Before the stadium authority, which is appointed by the governor, before they can issue any bonds, the state treasurer has to certify that the state is not, and let me repeat this, not on the hook for any, any money whatsoever. No money out of the general fund. If, for instance, let’s say they couldn’t generate enough money to make the bond payments. That’s between the football team, the stadium authority, and the bondholders. We have no obligation whatsoever.”
Saslaw said the team is looking at locations in Loudoun County, where its current headquarters is also located, and in Prince William County. Two of three proposed sites are in Senator Scott Surovell’s (D-Fairfax) district.
“I think there’s an agreement that we ought to do something,” Surovell told The Star. “I think capturing a professional sports franchise is always a major economic development opportunity and in Eastern Prince William County, having a multi-billion-dollar athletic complex, coupled with a town center, a hotel, a whole event center, would be a game-changer.”
Senate Minority Leader Thomas Norment (R-James City) told The Star, “I don’t know that there’s a feverish enthusiasm among the Senate Republicans about the stadium. I say that respectfully. It’s not that they are necessarily against it. It’s like when I was first approached about it, I asked a question that wasn’t rhetorical. I said, ‘What is that going to do for Williamsburg? We don’t need any Commanders down there.'”
Norment supported the bill after it was amended.
He said, “I don’t think that there’s unity, but it came out of the Senate of Virginia with Republican votes.”
The day before the Senate passed its version of the bill, Lieutenant Governor Winsome Earle-Sears warned that she wouldn’t vote for the bill if in a potential tie-breaker.
“Yesterday, many of you watched the ‘big game.’ VA is now working to bring her own teams here, and I support that – but not at any cost. I’m hoping legislators can work out the details to consider the taxpayers more,” Earle-Sears tweeted.
Knight is sponsoring the House bill, and she said that some of the tax breaks in the Senate bill haven’t been done before.
Unlike the Senate bill, the House bill only allows the authority to recapture sales and use tax, and only after the stadium is operational. It also only has a 20-year bond term with an option to renegotiate after that, and half of the proceeds from sales of the naming rights must go to the principal.
“The two bills are tremendously different. The Senate bill gives them an awful lot. My bill doesn’t give anything that hasn’t been done before, hasn’t been implemented and passed before,” he told The Star.
“I’m looking at it from the state of Virginia’s perspective. I don’t care if it’s the Washington team, or a baseball team, or a soccer team. I don’t care. I’ve got blinders on as far as that is concerned. I’m only looking into dollars and cents,” he said.
He said that he didn’t seek out the bill, but given his expertise with numbers, House Republican leadership asked him to carry the bill.
“They were approached by the team, and they brought me into it, we listened to it, and then it was very vague, so to speak, and then we decided, like we do with any large economic development opportunity that comes to the state, we decided to vet it further,” Knight said.
He said, “What I’m trying to prevent happening is I don’t want them to have condemnation powers. I don’t want them to start recapture during the planning stage. I don’t want them to have a 40-year without a renegotiation. I don’t want them to have recapture on all these other taxes like the Senate bill, because I’m looking at this piece of land that they are considering going to. What is the highest and best use of this land if a stadium doesn’t come there? It may be a farmland now, but I’m talking the highest and best use in five years. What will that return us? I’m being ridiculous on my figures but if it returns us $100 and then we enter into a stadium deal and it returns us $200 but it costs us $120, and it’s only returning $80, I’m looking at the net return on this land,” he said.
If the two chambers successfully pass a compromise, it will head to Youngkin for approval.
Competition with Other States
Knight said, “We know they’re negotiating with Maryland. We think they’re negotiating with Wachington, D.C. They’re going to look for the very best deal and that’s what I would do if I was a business person and if they come to Virginia, it’s going to be a good deal for Virginia, and if it’s good for them, so be it. But if they don’t go to Virginia, and they go to Washington or Maryland, that’s fine with us, because then it wouldn’t have been a good deal for Virginia.”
Norment said Virginia may have a better chance than Maryland because Maryland already has the Baltimore Ravens.
He said, “D.C. is a little bit of a different story. They’ve had the Redskins and now, the Commanders, for many, many years, and that is a significant fan base in Washington, D.C. It’ll be very interesting to see how aggressive D.C. gets in the effort to retain the stadium in D.C.”
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