Stadium Update
June 3, 2021
by Steve Thomas
My last update about the Redskins’ Washington’s ongoing efforts to build a new stadium was over four years ago (click here to read), and since team owner Daniel Snyder recently gave a theoretically-impromptu interview to sleazy gossip rag TMZ on a sidewalk outside Sofi Stadium in Los Angeles (click here to watch), it seemed like a good time to give another update on the stadium and what the future may hold.
Status and history of Fed Ex Field
For this exercise, I finally researched the Prince George’s County real property records, which is something I did not do for my prior column four years ago.
The FedEx Field stadium complex is owned by an entity called WFI Stadium Inc., which is the entity created by the late Jack Kent Cooke to purchase the stadium property in the mid-1990s, JKC Stadium, Inc., as later re-named by Snyder. The team itself is owned by an entity called Pro-Football, Inc., and is a tenant of WFI Stadium Inc., pursuant to a lease dated March 14, 1996, reportedly 30 years in length. The terms of this lease are not in the public records, which is normal for commercial real estate.
Cooke encumbered the stadium property with a lien in favor of a consortium of lenders led by Nationsbank, which is now Bank of America, in exchange for a $155M construction loan. It’s normal to have a consortium of lenders for very large loans – almost no bank or funding source is both willing and able to lend that amount by itself. Snyder assumed this loan when he purchased the team. Then, in 2002, another $125M in financing to Pro-Football, Inc. – meaning, the team itself – was tied to the stadium lien. This means that a total of $280M in financing is secured by a lien on Fed Ex Field. The real property records do not show that this lien has been released. This isn’t surprising, as many major commercial loans have 30 year terms.
The term of the lease between the team (owned by Snyder) and the stadium (owned by Snyder) is almost assuredly 30 years in order to match the term of the existing financing. The terms of commercial leases don’t start until the premises is ready. In this case, the stadium was finished and first used by the team in 1997, which means that the lease probably runs through the 2026 season, matching the term of the existing financing. Snyder could terminate the lease whenever he wants, of course, because at the end of the day he’s both landlord and tenant, but this would mean paying off the remaining portion of the debt in conjunction with such termination. Snyder could do this, but probably doesn’t want to, and neither would I. This is why Snyder told TMZ in the clip linked above that the target date for the new stadium is 2027; that having been said, he could extend the lease as necessary, probably with some minor negotiations with Prince George’s County, so 2027 isn’t really a hard date.
Timeline and costs of the new stadium
All of this means that Snyder has 6 years to get from right now – no land, no design, and no financing – to open for business. This seems like a long time, but in the world of stadium construction, that’s not as much as one might think. It takes years, not months, to acquire the necessary land, secure financing, and do the construction. As an example, Jerry Jones first started working on a new stadium to replace the old Texas Stadium in 1997. He finally secured the site of and financing for the new AT&T Stadium, a/k/a Jerryworld, in 2005, then worked on construction until 2009. The entire project cost $1.5B. In another example, Los Angeles Rams owner Stan Kroenke, who was originally a major commercial real estate developer and is married to someone with the last name of “Walton”, purchased the first tract of what eventually became SoFi Stadium in 2015. This site was one that had been previously identified by the NFL and others as a potential stadium site years prior, so the finding the land itself wasn’t difficult or controversial. Construction began in earnest in late 2016, and the stadium finally opened in 2020, and includes major commercial developments surrounding the stadium itself. The total cost of the entire project was between $5B – $6B, with no public funds at all with the exception of a few tax breaks.
So that’s what Snyder is looking at: realistically four to five years to acquire the land and complete construction, with costs of at least $1.5B even if the place is built on the cheap (such as was the case with Fed Ex Field). Costs could be significantly more if Snyder intends to simultaneously build large commercial developments surrounding the stadium. Therefore, Snyder realistically has until 2023 to find the site and secure financing. Snyder isn’t a real estate developer and doesn’t have Kroenke – Walton experience, reputation, and money, and has made it known that he’s seeking public financing to one degree or the other. Nobody builds things like stadiums without financing of some sort, even if you’re a Kroenke – Walton, so ultimately, the actual cash may come from some mix of state money and private lending. Public financing for stadium projects usually comes from some combination of bonds and hotel and car rental taxes, the latter being a constitutionally-acceptable way to make visitors and tourists pay instead of local residents, which is more politically amenable to voters.
Where could the new stadium conceivably be located?
Snyder has never even hinted at moving the team to another city, and didn’t do it in his TMZ interview, so I’m going to continue assuming that the team will remain in the Washington / Virginia / Maryland area.
One sign of Snyder’s intentions with a new stadium site is the fact that he has approached both Maryland and Virginia about being issued a gambling permit and has explicitly stated that the location of the new stadium hinges on such a permit. This means that Snyder is going to include gambling at the new place to one degree or another, and the cooperation of one of these two states is required.
In my original column, I put odds on Virginia first, then Maryland, with the District of Columbia being last. I still believe that to be true. Let’s start with the least likely option.
District of Columbia
Most fans, if given a choice, would probably want the new stadium to be on the site of the Redskins’ glory years at RFK Stadium. I’d like to see that as well. Unfortunately, that’s not likely.
One of the original problems with the team moving back to DC was the team name, which has obviously been solved. The DC city council and the useless lump of carbon-based life form which masquerades as the mayor didn’t like the term “Redskins”, but that objection has been eliminated with the change of team name. The much bigger problem is that the RFK Stadium land is owned by the federal government, under the authority of the National Park Service, and is leased to the District of Columbia through 2038. The team would need rights to the land at least through 2056, which the District government doesn’t currently have the authority to grant. Therefore, any deal for a new stadium on the RFK site would necessarily require the approval and consent of the federal government in some form or fashion along with either a new lease or outright sale of the property by the District government. There’s no guarantee or indication that the federal government wants to use that land as a stadium until the middle of the century. The DC mayor – i.e., the useless lump of carbon-based life form mentioned above – asked the prior administration to either deed the site to the District directly or enter into a new, 100 year lease, to no avail. The current administration is on the same side of the political isle as the DC government, so presumably they would more open to discussion, but that’s nevertheless a major hurdle to overcome with no solution currently on the table.
The next problem is that many of the local residents in the vicinity of the RFK site don’t particularly want a new, much larger stadium in their backyards. In fact, residents have publicly expressed their vehement opposition on multiple occasions over the years. My experience watching and being involved with stadium developments is that typically citizens are all for a new stadium until the proposal brings said stadium near their personal homes, at which point, opinions change. This is what’s going in this case. Of course, the voices of the locals matter only so much, because the most important opinions are those of the federal and District governments, and the opinions both of those entities begin and end with money. The “highest and best use” (which is a term of art in the real estate development world) for land is normally determined by what use will result in the most income, and by extension, tax revenue, although that can include public uses such as parks in rare, altruistic moments. The “highest and best use” of land is almost never a stadium in the middle of a dense urban area. I think it’s far more likely that both the feds and the city will want to do something else with the RFK site, whether it’s park land, residential or commercial development, or another, as of yet unknown development.
Finally, the DC government isn’t exactly rolling in money. Both Virginia and Maryland have access to significantly more public dollars than does the District. In addition, the city is also still paying off a $535M loan on the $670M Nationals Park, which is an annual cost of $38M in debt service payments. Raise your hand if you think DC both is able and wants to add a second annual debt payment that is at least double that amount.
Finally, I’m not aware of any other site in the District of Columbia itself other than RFK that is big enough for a new stadium without displacing a large number of local residents in low income areas, which is really, really bad optics.
For these reasons, I still think a new stadium in DC is the least likely option.
Maryland
Four years ago, I thought that a fairly likely option was Oxen Hill Farm near National Harbor area. Since that time, though, Seasons of Discontent host and long-time Washington beat writer Rick Snider has convinced me that the financing for such a project is unlikely given the money the state of Maryland has put into gambling development in that area. If that’s not a realistic site, then other options are slim.
The state probably wouldn’t be too excited about a new stadium too far north up I-95, which would infringe on the Baltimore Ravens’ marketing territory. To me, the most likely option is the existing Fed Ex Field site in Landover. The obvious problem with rebuilding at that location is that the team would have to relocate for up to four seasons. The only remotely NFL-quality option in the general vicinity is Maryland Stadium, the home of the Terrapins, which wouldn’t be ideal but could probably be made to be acceptable on a temporary basis given an injection of some money. I suppose Washington could also play at MTI Stadium in Baltimore, but that would (a) be humiliating, and (b) require the approval of the Ravens. If anyone is aware of another suitable tract of land in the DC area on the Maryland side of the Potomac River, speak up.
Virginia
Virginia doesn’t have the land availability and usage problems of Maryland and the District of Columbia. Plenty of undeveloped land is available out near Dulles Airport, and which also has the bonus of not coming with existing densely packed residential homes in the immediate vicinity. That’d be a pretty long hike on gamedays for Maryland and DC residents, plenty of whom would hate such a location, but frankly, those opinions wouldn’t matter much. Whether the stadium sells out or not has everything to do with the performance of the team on the field and nothing to do with the fact that some small number of folks who probably aren’t season ticket holders anyway say now that they don’t want to drive an hour to go to a game.
Virginia doesn’t have a major professional sports franchise, so the state may be more motivated than is either DC or Maryland, and more importantly isn’t currently paying for another stadium. Of course, the City of Richmond lost money on the training camp deal with the team, which may make the state a bit wary or hopping into the sack with Washington again.
I’m not going to try and predict the political will of the state of Virginia, but in my view the availability of easily acquired and developed land alone puts Virginia in the lead. Ultimately, the decision may come down to which state is going to let Snyder open a casino or other gambling options more than anything else.
What do you think? Le me know in the comment section below.