(Updated 12/27) An economic impact report released last Friday said the new Potomac Yard arena would create 30,000 jobs and more than double the economic output of previous development plans.
The report came from HR&A Advisors, a consultant hired by the Alexandria Economic Development Partnership AEDP in June as a technical advisor.
The memo to AEDP from HR&A Advisors notes that the findings are based on Monumental Sports & Entertainment operations information shared by AEDP that shows statistics from arena and performing arts venue events.
The report looks at the economic impacts of the development, from construction impacts to economic output and tax revenue.
According to the report:
Key takeaways from this analysis are provided here, with additional detail on
methodology and findings provided in in the sections below.
- Development of an entertainment district would generate approximately 30,000 permanent jobs
for the Commonwealth of Virginia.- An entertainment district is projected to generate roughly 2.5 times the economic output of
what would otherwise be built based on current development plans.
The permanent annual economic output of Potomac Yard sans arena vs Potomac Yard with the arena, according to the report, is $3.5 billion vs $8 billion. Over the next 30 years, the report says the ongoing economic output is estimated at $93.8 billion with the arena as compared to $36 billion without the arena.
Some of that revenue to the city and the Commonwealth would go to paying off debt borrowed to build the arena. According to Mayor Justin Wilson:
The debt borrowed by this public entity will be paid by three streams of money.
First: a private stream. Ted Leonsis will pay, first of all, a $400 million downpayment and a rent payment. That rent payment will be used to pay off that debt.
Second: the city will take a portion of the new tax revenue that comes from this development and we will use it to pay off a portion of this debt borrowed by that authority.
Third: the Commonwealth will take a portion of its tax revenue coming off this use and they will use it to pay off the loans used to construct it.
This is exactly the way we funded the Potomac Yard metro. We funded it using the tax increment of development that happened in Potomac Yard.
The summary is available online.
Whether the arena goes forward remains to be seen, Alexandrians were quick to raise concerns about the transportation impact and local leaders followed suit in the days after the announcement.
