OPINION:
When politicians strike a deal to build a new stadium or invite a sports team to their state, the typical framework for such deals is often questionable.
It usually looks something like this: New taxes or tax increases are used to finance the projects upfront. Billions of dollars in public resources are shelled out to build a shiny new stadium — often in the same city where a venue already exists. Billionaire owners glad-hand local officials, and taxpayers foot the bill.
But Gov. Glenn Youngkin is not a typical politician. And the partnership he struck with Monumental Sports and Entertainment is unquestionably good for Virginia.
The deal that Mr. Youngkin — a conservative and successful businessman with much experience in this arena — struck with Monumental is also highly unusual.
Consider recent deals for new stadiums elsewhere. Venues for the Tennessee Titans, Buffalo Bills, Las Vegas Raiders and Oklahoma City Thunder were all financed using some combination of state and local bonds. Some were also financed with hundreds of millions of taxpayer dollars upfront.
Those deals used traditional general obligation, or GO, bonds, which basically leave taxpayers on the hook to fund a project with funding that would otherwise be used for roads, water systems and other state infrastructure.
Mr. Youngkin took a different tack. Instead of a taxpayer-guaranteed GO bond, the governor made a deal with Monumental Sports and Entertainment to use a revenue bond tied solely to the arena itself. Revenue bonds are exactly what they sound like: They’re guaranteed to pay for themselves, solely and exclusively using the revenue generated from individual projects.
That’s good news for Virginia taxpayers. The new Entertainment District will fund itself with revenue generated by ticket sales, parking and other activities associated with the arena.
There are no new taxes or tax increases associated with this partnership, either. It is funded with existing taxes on activities that will naturally take place — just at a greater volume — at the new arena.
Moreover, the upfront commitment from Monumental represents a greater share of project financing than similar projects. While the commonwealth will not put up a single penny, Monumental is putting up $400 million.
Private financing represents 72% of total funding for this project. The funding from the commonwealth of Virginia and the city of Alexandria — again, solely generated from site-specific revenue — accounts for the other 28%.
Compare that with the ratio of public-private funding for the Titans, Bills and Thunder projects, and you’ll see how sweet a deal Mr. Youngkin struck for Virginia. Public funding for the Titans, Bills and Thunder represented a majority of the financing (Oklahoma City funded 95% of the Thunder project).
Mr. Youngkin structured this partnership with no cost to Virginia taxpayers, only benefits. And those benefits are massive.
The project will generate an estimated 30,000 permanent jobs and 17,000 construction jobs.
That is in addition to the billions of dollars in economic impact the new arena will generate: $4.9 billion for the city of Alexandria and $7 billion for Virginia.
The common refrain that these projects siphon resources away from other public necessities, such as schools and infrastructure, does not apply to this deal, either. For Alexandria, this project will come with new, critical funding for education, multimodal transportation, affordable housing and infrastructure.
The framework of this deal and the benefits Mr. Youngkin secured in it should make every Virginian happy that we have a businessman as governor.
It is not a bailout for a billionaire team owner. It is not a cost burden on taxpayers. It is not a leech on limited public dollars.
It is a monumental opportunity for Virginia, the city of Alexandria, and every Virginian rooted in conservative policymaking.
We cannot allow this opportunity to pass us by.
• Tim Parrish is chairman of the Prince William County, Virginia, Republican Committee and a member of the Republican Party of Virginia State Central Committee, representing the 11th Congressional District.
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