Summary of stadium development term sheet
May 12, 2025
by Steve Thomas
We’ve covered the stadium deal between Washington’s franchise owners and the District of Columbia at some length here at The Hog Sty, both on The Hog Sty Podcast and in print. However, I have since found the term sheet agreed to by the parties and read it, so I thought it would be productive to give some thoughts.
Let me say that, first, this term sheet is 30 pages long, so I’m not going to go into excruciating detail, but rather will just give as brief of an overview of key points as possible. Second, I’m a commercial real estate attorney in real life, and I’ve worked on countless major development projects, including stadium transactions, so this is right up my alley. Feel free to ask any questions you like about this topic in the comment section, and I’ll try and answer them. I do not represent any of the parties to this transaction, so I have no specific knowledge of this matter other than what I’ve read online, including the term sheet.
First, the term sheet makes clear that this project will include a number of different and separate specific projects in accordance with a master plan. This is normal for a project of this size. Josh Harris’ ownership group will control this project through a number of different entities, for both lending and liability reasons. For the sake of simplicity, I’m going to refer to all of these different Harris-controlled entities as the “Harris Group”. Generally, the project is divided into four different areas: the stadium, the team administrative area, the parking, and the commercial and/or residential development areas. For the sake of this column, I’ll call those areas “Stadium”, “Team Admin”, “Parking Facilities”, and “Team Development”. Note that there are going to be several different parking areas, as well as a “Designated Entertainment Area” and a sportsplex. The Harris Group is solely responsible for design of the Stadium, although it will have to go through the District’s standard permitting approval process, as well as various other planning-related approvals.
The term sheet does not describe with specificity what is going to be included in the Team Admin area, but I suspect it’s going to primarily be the ticket sales staff, as well as the Stadium management-related staff. I could be wrong, but given the limited size of this area, I don’t believe that there’s space to build an entire team training facility at this location. I’d also imagine that ownership will want to be located at the team training facility. Also, given that most players and coaches live in Virginia, I suspect the team wouldn’t want to relocate everything to the District anyway.
The Harris Group has agreed to invest no less than $2.5B and is solely responsible for design and construction of the Stadium, Team Admin, and Parking Facilities, with the exception of the District’s contribution. The term sheet states that the District will contribute “horizontal capital” towards the design and construction of infrastructure for the Stadium and the Parking. In the construction world, “horizontal construction” is a buzzword for infrastructure, as opposed to construction of the actual facility itself, which is called “vertical construction”. The District will have no obligation to fund any operating or maintenance expenses, capital repair and replacement, or any future capital improvement, all of which being the Harris Group’s responsibility.
The basic agreement will happen fairly fast, or not at all. The term sheet defines an “Exclusive Negotiation Period”, which is a period of time in which the Harris Group and the District agree to negotiate in good faith on all of the many separate agreements necessary to complete the transaction. This Exclusive Negotiating Period will terminate when either (a) the District Council votes against the agreed terms or the proposed budget, or (b) Council has not taken up a vote on these matters by July 15, 2025. In other words, we’ll very likely have answers about whether this transaction is going to pull together for real no later than this summer.
The anticipated opening of the Stadium is the start of the 2030 season. The District and the Harris Group will enter into separate leases for each of the different areas, i.e. the Stadium, Team Admin, Parking Facilities, and the Team Development. The leases for the Stadium, the Parking, and the Team Admin will be for a 30 year term with four consecutive five year renewal options. The Team Development lease will be a term of 60 years with three consecutive ten year renewal options. The leases, as a whole, will have a requirement that 30% of the space be used as park space, which is born from the federal law regarding this property. The rent for each of these leases will be for $1.00 per year, which is the standard term used to document a “free” lease in official legal terms. However, the lease for the Team Development turns into a market value lease beginning in the 28th year.
Most critically, the Harris Group will be entitled to receive all of the operating revenue from the Stadium, including non-NFL events. The parties’ mutual intent is to have activities at the Stadium for 200 days per year. This is a number I’ve heard for stadiums before, but never understood. 200 events a year is an enormous number, one that, in my opinion, is unrealistic. Regardless, that’s the stated goal.
To the extent that the Team Development includes residential housing, such development must include affordable housing. The term “affordable housing” means single-family and multifamily housing that is priced at lower levels in accordance with percentages of something called “Area Median Income”. This is a common, stated goal of the federal government, through the Department of Housing and Urban Development (“HUD”), and every major city in the country. It’s likely that the Harris Group will be eligible for affordable housing construction grants for at least some portion of the housing component, either directly from HUD or indirectly from HUD through the District. There will almost certainly be both commercial and residential developments in that portion of the property.
The District will be obligated to design and complete a sufficient amount of the horizontal infrastructure for the Stadium to permit the Stadium and Parkng to be developed and used by December 31, 2029.
The District’s financing will consist of a maximum of $500M, to be paid between 2026 and 2029. Of this $500M, only $175M can be done through issuance of public bonds, meaning that the remaining $325M will need to be funded through other means. What, exactly this “other means” entails is a bit of a mystery. The City could theoretically enter into standard construction loans, but the plan is unclear in the term sheet. I will try to do some more research into this issue. The money will be distributed by the District to the Harris Group, which will be responsible for all construction.
Perhaps the most important provision in this term sheet is the agreement that both the Stadium and the Parking will be exempt from real property taxes, which is a huge monetary concession by the District. Sadly, this is something that’s very common in NFL stadium developments. However, the good news is that sales and use taxes on retail sales at the Stadium, as well as taxes from the Stadium event tickets, will be collected and used to pay the District’s debt from the bond issuances, with any excess going to something called the “RFK Campus Reinvestment Fund”. This fund will be used to support “the attraction of entertainment, cultural, convention, and other community-oriented events” involving the Stadium.
The parties have agreed that the Harris Group will be able to sell Personal Seat Licenses (each, a “PSL”), so get ready, season ticket holders. PSLs typically range from a couple of thousand dollars per seat to much, much higher. Sometimes, teams don’t impose PSLs on every single seat in the stadium. We’ll just have to wait for the team’s plan to see how expensive it gets.
The Harris Group will be obligated to “provide additional community benefits” in support of things like local public schools, access to youth sports facilities, and other similar causes. This is also fairly typical.
The Harris Group has agreed to provide the District with free access to two suites in the Stadium, to be located on the 30 yard line. This is just standard, free grift to the District government, for no real reason other than to give them greater incentive to do this deal.
The Harris Group will be contractually prohibited from relocating the team during the term of the lease.
The term sheet also contains a bunch of standard legal terms that aren’t worth getting into here. What I’ve described here is a summary of the important terms in which most fans would be interested. I’ll follow up with more information when it becomes available.