This is Part 2 of our two-part exclusive Q&A with Ted Leonsis regarding the proposed Wizards' practice facility plans. In Part 1, the Wizards' owner touted the merits of the facility for the team and the community. In Part 2, he addresses concerns about the way the facility will be funded and responds to those who question whether this'll be a good arrangement for the city.
BULLETS FOREVER: Whether the new facility is in Virginia or D.C., it seems like there's at least the possibility that some sort of public funding is needed?
LEONSIS: Why do you say that?
BF: That's what reports have indicated, and several of the other practice facilities were built with public funds.
LEONSIS: But the Verizon Center wasn't built with public funds.
BF: It was renovated with public funds, correct?
LEONSIS: What do you mean?
BF: Wasn't there a renovation in 2007?
LEONSIS: Yeah. Do you know how that worked? The city used its balance sheet, borrowed the money and we then signed on and paid the city back at a higher rate than they borrowed the money. It is a good business for the city. They make a profit on their payments to them.
BF: But that money, that borrowing, will still count against the debt cap, does it not?
BF: So it does in theory displace other investments that the city could make.
LEONSIS: Yes, you could look at it that way, except we're paying them back the interest and they have a profit. And we pay our taxes, which went from 5.35 percent to 10 percent. And as we've grown our revenues here, our tax payments are very lucrative to the city.
But on that 50 million dollars, which by the way Mr. Pollin negotiated, we pay the city more than they pay in interest. It's a deal that they are very happy with because it's profitable, as opposed to borrowing $50 million dollars and putting it into some kind of deal, if you will, that they don't get any payments on. Just on that, we look at that and go, why should the city be making a profit on it? But they are.
We feel like we're great taxpayers. We're great for the community in that we bring almost three millions people into the building. We generate lots of revenue. We pay lots of taxes on the revenue. And on the $50 million dollars, the city is making more money than it pays in interest. So it's kind of almost like a bank there. It's a very profitable deal for them.
BF: On the subject of the benefits to the District, or Virginia, it's been said by city officials that this may convince more Wizards players to live in D.C. and pay D.C. taxes. I know you've mentioned that pretty much all the Capitals players, if not all of them period, live in Virginia. Given that the Wizards already practice at the Verizon Center, why would a new facility in the city impact where they choose to live?
LEONSIS: I think you should look at it the other way. If we move deep into Virginia, players would most likely move there. It's what happened with the Caps. The reason everyone lives in Virginia is because our training facility used to be in Piney Orchard, MD. We used to fly in and out of Baltimore, and most of our players when we practiced at Piney Orchard, like Peter Bondra still, lived in Annapolis and out towards Baltimore. We played at USAir Arena, then when we moved to Verizon Center and that became a very tough and long commute. We moved the practice facility to Ballston, and thus everyone moved. And every new player that came to the team or every free agent said, 'This is where we practice, this is where I'll live.'
So if we move to Virginia, it's possible to players will say that they want to live in Virginia.
And by the way, we wanted to keep the Caps facility in D.C. We went to the city and said, 'Help us locate land. What can you help us to do?' And at the time, they had their hands full with other things. And we negotiated with them, but the people in Ballston said, 'We'll do it, this will be great for us.'
Now, we're go to the City and we say, "Well, we're going to do it again. We'd like to stay here, but if we have to go to Virginia or Maryland, that's where we'll have to go'. And their initial reaction was, 'Well, we wish we hadn't let the Caps go to Ballston because we see how world class the facility is and how the community has taken to it, the good things that it's done, the revenue it's generated, the taxes that you are paying, all the players are living there. Do we really want to have that happen again?' And we say, 'We want to stay, but we have to look at all of our options. What's the best thing for us?'
And land is a critical issue. As I said in Chicago, it's across the street. We didn't own the land across the street. The number 1 Legal Sea Foods in the chain is what I am looking at. So that's why we have to move it to a place that we can put the footprint.
In terms of seats, you know, we'll probably ... have you been to Kettler?"
BF: I have not. I've heard good things.
LEONSIS: You probably should go and do it. It isn't far away.
Basically, the city had built a parking lot to bring the mall to Ballston. No one was freaked out when they said, 'If you want this mall to come, people need to have a place to park.' So they built the parking lot up a little bit, and then the top of the parking lot, they said, 'There's land that is big enough for you to build a facility.' We're on the ninth floor of a parking lot. It's a beautiful building, it had enough land, it had parking and it's a world class building. It's also the world's highest ice rink. They were creative and they found for us in a heavily trafficked area. It's less than five miles from here.
BF: And you'll face a similar challenge in D.C. I imagine.
LEONSIS: So we've gone to the District, we've gone to Virginia and we've gone to Maryland. We had developers approach us who were building things on their own. We're talking to everybody. There's no plan, there's no rights, it's preliminary preliminary. And I couldn't tell you or handicap right now what the right answer is.
Geoff Burke-USA TODAY Sports
BF: As you said, Kettler is a unique facility for the area. I can't think of too many ice rinks that have thousands of seats in the D.C. area other than the Verizon Center or Kettler. But it seems basketball facilities are more common. How do you make something like this a unique space that offers something not just to the team, but to the community?
LEONSIS: The city plays its high school championship games at the Verizon Center, a 20,000 seat arena, and there are less than 2,000 people attending. If we could make it where the Wizards play and practice, where the Mystics play and practice and make it available for tournaments, high schools and the community and leagues, I think that'd be terrific. We'd also use it for a lot of charity-oriented work.
I wouldn't be surprised if, when we host the NCAA Tournament, they would want to practice at the practice facility. We had the Olympic team here, the men and women's Olympic teams before they went to London. They had no place to practice. So there were both teams [at Verizon Center], and we had one court.
Once you build it, I am sure there will be lots of things that we'll be programming, and we want to put the Mystics there and one day when we get a D-League team, they would practice there. There will be a lot of uses.
(Editor's Note: Leonsis clarified here that he means those teams would practice at the facility, not necessarily play their games).
BF: I want to sneak in one more question real quick. Does this play into the push for the Olympics in 2024 at all?
LEONSIS: No, not at all. The Olympics will mostly utilize existing footprints, Georgetown, George Washington, Nats Park, Verizon Center and the like. [Though] you know a practice facility for 1,500, maybe some teams would want to practice there, because they'll be looking at courts. Some of them might want to practice at Georgetown, George Washington and Maryland and the like.
But no, they are not connected in any way. Ten years from now, we have no idea if we'll emerge as the U.S. city. This is about trying to build a practice facility for a couple years from now for the teams that we already have. So it's not connected at all.