District Reaches Deal with DC United for $300M Stadium
- May 29, 2014
Washington, D.C., is getting a new soccer stadium. Mayor Vincent Gray announced on May 23 that the District has reached a business agreement with Major League Soccer’s D.C. United for a 20,000 to 25,000 seat stadium. The project will cost $300 million.
The legislation was delivered to the D.C. Council for approval. The city will pay $150 million for land acquisition and infrastructure, while D.C. United will pay the same amount to build the new stadium. It will be constructed in the Buzzard Point neighborhood of Southwest Washington, D.C.
In a release, the city said it now controls 88 percent of the proposed site and that it has reached an agreement in principle to acquire the remaining parcels. The city traded the Frank D. Reeves Center of Municipal Affairs to real estate firm Akridge for the majority of the land at the site. The center’s tenants will be moved to a new building in Anacostia, to be completed in roughly three years. The District will buy the remaining land from PEPCO.
According to the deal, the ground lease will include a 30-year initial term, with two five-year extensions. The site will revert to the city once the lease ends. The base rent will be $1 per year.
The deal also calls for the city to collect sales taxes on day-of-game revenue from D.C. United and its concessionaires beginning in year six. All stadium sales become subject to the sales tax after 10 years. D.C. United will pay the city $2 for each ticked sold in years 11 through 20 and $2 per ticket, adjusted for inflation, starting from year 21 until the end of the lease. The District will start to collect real estate taxes after five years, at 25 percent of their full rate, then 50 percent after 10 years, 75 percent after 15 years and 100 percent after 20 years.
D.C. residents will occupy 51 percent of jobs at the stadium. Half of all development-related contracts and 35 percent of all stadium operation contracts will go to Certified Business Enterprise businesses.
“This is a major step forward for economic development in the District of Columbia,” Mayor Gray said in a statement for the press. “The new soccer stadium will be the connector between developing areas around our baseball stadium and the new Wharf development along our Southwest Waterfront. The new soccer stadium is the final catalyst for what is certain to become one of the most vibrant and sustainable sports and retail districts in America.”
Photo credit: D.C. United