A D.C. report touting the benefits of a new Commanders stadium at the old RFK site leaves a fundamental question unanswered, one business expert said.
Cliff Rossi, professor of the practice and director of the Smith Enterprise Risk Consortium at the University of Maryland, said the report doesn’t describe the opportunity cost of the project.
The proposed project, which includes a new Commanders stadium, housing, shops and restaurants, could emerge as a “great idea, but what is the alternative use of that square footage? It’s pretty valuable property, actually. What’s the alternative use of that, and let’s compare the results of that versus a stadium build, and I didn’t see that in here,” Rossi said.
Instead, the report describes the overall economic impact of the stadium on its own, Rossi said. Created by the firm Conventions, Sports & Leisure International, the 22-page report detailed economic benefits of a new facility and a transformed neighborhood over the next 30 years.
The findings come as D.C. Mayor Muriel Bowser works to collect lawmaker and public support for the project. The D.C. Council must still approve funding for the stadium deal. Bowser and Commanders’ majority owner Josh Harris hope to have a new stadium ready for the 2030 NFL season opener.
Asked about the opportunity cost, City Administrator Kevin Donahue said in a statement that “while some opponents of the deal may have their own alternative visions for the site, the simple reality is there is no alternate investor looking to pump billions of dollars of their own money into the District.”
About 30,000 jobs would be created over the life of the stadium, Donahue told WTOP last week, adding it’ll create over $5 billion in tax revenue.
Donahue said lawmakers are still “making the case to the taxpayers or D.C., the residents of D.C. and the D.C. Council that we’re going to have a meaningful, clear return investment at the stadium.”
The report’s estimates are based on 10 home football games a year, in addition to almost 20 third-party events and 200 private events. It assumes some visiting fans will stay at nearby hotels and eat and drink at restaurants.
Those projections appear reasonable, Rossi said, but reasonable assumptions are “reflective of the average, and we don’t experience the average. We experience ups and downs in the local economy. During COVID, right, people weren’t eating out as much.”
The report presents those projections as a long-term average, he said.
“Those numbers don’t seem unreasonable to me, but at the end of the day, for the amount of money that’s involved, there should have been a range of scenarios conducted to allow policymakers to say, ‘Yeah, that’s good value for our taxpayer money,’” Rossi said.
Studies into stadium projects of all types typically find that local economic activity is largely unaffected by them, Rossi said.
“What are the opportunity costs? What else could have gone in place of the stadium and complex? And how does that factor in?” Rossi asked.
Some of the estimates could be a result of “shiny object bias,” Rossi said.
That describes when someone uses a “well-established regional input-output model to generate these results of the economic impact. I always have to take a step back and say, ‘But are those real numbers? Or is it somebody’s desire to see someone apply a fancy model to come up with the result, but the results really haven’t been corroborated or validated in any kind of sophisticated way?”
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