Big presser this morning with Ted Leonsis and VA Governor Youngkin, and other state and local pols announcing huge redevelopment of Potomac Yard (next to Amazon project) to build new stadium for Wizards/Caps, a new smaller concert venue, other mixed use development, etc. on border of Arlington/Alexandria Going to be a bumpy road I suspect in terms of state and local political approvals, particularly given the broader democratic desires to put a thumb in youngkin's eye. A couple of observations:
1. Ted is not an idiot for doing this, in that his ground lease at the downtown arena is pretty bad, and his most valuable asset (Ovi) is nearing the end of its useful life. Time to focus on fixed cost inputs to the business model, particularly as it moves from sports ops to sports broadcasting. That said, it's a bit surprising.
2. While DC is seemingly too little too late, last night they proposed legislation to support $500M in funding for downtown arena upgrades (Ted wanted 600). For those that decry public investment in pro sports arenas, the business case for this is easy. Cap One has been the engine that has driven the downtown energy in Penn Quarter for two decades, and the city can hardly count on 'federal government return to office' to fill the vacuum. Or the Mystics. Leonsis says they're still going to retool cap one for other events, including 'family friendly' ones, whatever that means (but if we're bringing back Up with People! I'm all in
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3. All in all this surprises me (given Ted's community ties), and saddens me (in that eventually it's going to probably mean that the Penn Quarter region is going to go down the toilet, perhaps resulting in the red light district making a comeback to its original location near my offices). How did we get here? Probably a combination of hubris/neglect on the part of the DC government with respect to the continuing development/upkeep of the area (they've lost things like spy museum and some longstanding restaurants), the increase in downtown crime (which personally doesn't deter me but anecdotally to my surprise, actually seems to deter a lot more people that I talk to than I would have thought), Ted's being annoyed with the street musicians that constantly play outside of his downtown office (not kidding), and Ted's broader aspirations to build a bigger and broader entertainment/media empire which DC will never be a great spot for.
1. Ted is not an idiot for doing this, in that his ground lease at the downtown arena is pretty bad, and his most valuable asset (Ovi) is nearing the end of its useful life. Time to focus on fixed cost inputs to the business model, particularly as it moves from sports ops to sports broadcasting. That said, it's a bit surprising.
2. While DC is seemingly too little too late, last night they proposed legislation to support $500M in funding for downtown arena upgrades (Ted wanted 600). For those that decry public investment in pro sports arenas, the business case for this is easy. Cap One has been the engine that has driven the downtown energy in Penn Quarter for two decades, and the city can hardly count on 'federal government return to office' to fill the vacuum. Or the Mystics. Leonsis says they're still going to retool cap one for other events, including 'family friendly' ones, whatever that means (but if we're bringing back Up with People! I'm all in
)3. All in all this surprises me (given Ted's community ties), and saddens me (in that eventually it's going to probably mean that the Penn Quarter region is going to go down the toilet, perhaps resulting in the red light district making a comeback to its original location near my offices). How did we get here? Probably a combination of hubris/neglect on the part of the DC government with respect to the continuing development/upkeep of the area (they've lost things like spy museum and some longstanding restaurants), the increase in downtown crime (which personally doesn't deter me but anecdotally to my surprise, actually seems to deter a lot more people that I talk to than I would have thought), Ted's being annoyed with the street musicians that constantly play outside of his downtown office (not kidding), and Ted's broader aspirations to build a bigger and broader entertainment/media empire which DC will never be a great spot for.
