| |
The events of the past week recall Benjamin Franklin's adage: those who fail to plan are planning to fail.
Perhaps we expect the foolhardy to be guilty of such acts, yet we seem surprised again and again when the smart ones fall prey. Ted Leonsis, a Georgetown graduate and a wise man of business, now looks more like a wise guy. The owner of four Washington professional sports teams and its downtown arena took a blowtorch to his professional reputation last week, and turned much of the local sports public against him in a flash.
In an attempt to get out of the shadow of Abe Pollin, a self-made man who built Capital One Arena from his own personal fortune, Leonsis, a man worth $2.8 billion, wants the commonwealth of Virginia to pay $1.3 billion for the privilege of crafting his own national monument.
With a vote pending soon in the General Assembly, details are altogether lacking on this effort. There is no mention of the capacity of the new arena or even the number of suites, if they even know at this point. A 2,500 car underground garage was dutifully announced, yet, one one road provides egress into the area and Metro was never consulted as to its impact. The presentation was heavy on "future" development, a tacit acknowledgement that the Target store and nearby auto mechanic shops may survive long after the novelty of new neighbors wears off.
If this seems like a shaky start for what it calls a "world class entertainment district" in a region that does not need to remind visitors of same, some plan is always better than no plan at all.
And "no plan at all" is where Georgetown University and its basketball program sits right now as to its future for home games after the 2027-28 season, assuming Gov. Youngkin delivers the vote. With a basketball program that has lost 58 percent of its average attendance in the past 12 seasons, and where as much as 80 percent of capacity now goes unsold, it's no stretch to say that the future home of the Hoyas has a lot to say about what kind of program Georgetown can sustain in the years to come.
Georgetown can either let whoever owns Monumental Sports and Entertainment in four years call the shots on its basketball future, or take the lead themselves.
Past results are not promising in this regard.
The roots of this gilded cage date back four decades. In the summer of the arrival of Patrick Ewing as a college freshman and growing interest in what had become a legitimate Top 20 program, Georgetown athletic director Frank Rienzo approached Pollin, owner of Capital Centre under the umbrella corporation Washington Sports & Entertainment (WSE) about playing 12 home games for the 1981-82 season at the spacious though altogether desolate suburban arena.
There wasn't a restaurant or a Metro stop with four miles of Capital Centre, but it gave Georgetown the aura of a big time program as its star ascended in the college basketball world. Attendance exploded from 4,198 a game the prior season at McDonough Gymnasium to 10,399 a game at Capital Centre, and the Hoyas welcomed a steady stream of new fans that followed it for decades to come.
Following the 1981-82 season, the agreement went forward, except that all Georgetown home games would now be played at Capital Centre, and, by extension, the deal continued onward with Monumental Sports and Entertainment, with an on-campus option only in case where an arena conflict could not be rescheduled. Since 2007, and exclusive of COVID-19 restrictions, a total of three regular season games have been scheduled for students on campus.
When interest is good, a big turnout is good for Georgetown, no question, but these have been fewer and farther between. Just eight games among the 393 played at Capital One Arena since 1997 have sold out, and none since 2013.
As fans, we've heard for years that Georgetown has no choice but to pay high rents for small crowds; after all, Capital One Arena is the only game in town. It was telling, perhaps, that at its introductory press conference introducing the Alexandria arena, Monumental officials took note to say that Georgetown would not be a part of its new arena, suggesting that the opportunity cost of hosting Georgetown versus securing other events for those dates may no longer be worth it.
Monumental's relegation of the Hoyas and the WNBA's Washington Mystics to the arena it wants to leave is one of concern, but also one of remarkable promise, if only the imagination and planning is there.
For all the justifiable concern that the Chinatown neighborhood will rapidly deteriorate without the number of events generated by the Wizards and Capitals, there is a practical concern: good intentions notwithstanding, Monumental might not want to maintain the arena at all--it's competition, after all. Instead of available capacity at two arenas, why not merely close it, raise the price, move everyone to Alexandria and casually let Penn Quarter die?
This is a common outcome at many former NBA and NHL arenas. Former arenas in downtown Orlando, Dallas, and Miami were summarily imploded after their teams moved, while suburban arenas in Los Angeles and Houston were sold to evangelical mega churches. The Joe Louis Arena in Detroit was closed just three months after the last NHL game in the building.
Washington can't afford this, literally. The arena is the visible foundation of an entire neighborhood that is responsible for $25 million in tax revenue and over $300 million in economic activity. As one restaurateur told Washingtonian magazine, "Maybe this area can reinvent itself to be an attractive place to go. You can't just let this this car crash in slow motion."
Monumental has no good idea what to do with Capital One right now, but Georgetown and the District should. (Monumental owns the building but cannot build a new property on it because DC owns the ground rights.) If Georgetown is a true partner with the District, it needs to be sitting at the table to discuss a second act for the arena, not a wind-down.
That said, the District needs to step up if Monumental will not. With some portion of the $500 million it had intended to offer Monumental to stay, an offer to acquire the arena after 2028 is in order, in exchange for a long-term deal for Monumental to manage the property on its behalf. With it, Georgetown becomes the lead tenant and a voice in its future.
This is more than an arena, of course: one million square feet, 106 suites, corporate offices for 600, five reception areas, 35,000 square feet of LED displays, 25,000 square feet of ground floor retail, and 400 underground parking spaces, all in downtown Washington. It's too vital a property to consign to a tear down and one which has been kept up surprisingly well over the years.
Where does Georgetown fit into this? Four-tenths of a mile east of the arena lies Georgetown's biggest expansion in a century: the Capital Campus. Largely unknown to alumni and even recent grads, the project intends to relocate of the McCourt School of Public Policy, the School for Continuing Studies, and significant numbers of graduate school programs to now-vacant commercial office space near the Law Center, and provide dormitory housing for 450 students.
As to the expansion, "This is an exceptional chance to deepen ties to the communities we serve; to create collaboration opportunities for undergraduates, graduate researchers, faculty, and staff alike; and, most importantly, to do our best and most important work at the heart of the nation's capital," said provost Robert Groves, a quote that could apply as well to this discussion.
The District won't replace 80 NBA and NHL games a year, but it gains a flexible Class A real estate space, with opportunities to align with the convention center three blocks north. As lead tenant, Georgetown could seek to gain greater access to the facility for its men's and women's basketball programs, the athletic department as a whole, and pursue a de facto extension of the Capital Campus west to 6th Street N.W., with opportunities to integrate its continuing education, real estate and sports management programs within its walls.
With a discussed closing of Capital One Arena's 400 level (permanently or otherwise), the arena reconfigures to 11,025 seats per its existing seating chart. That's an optimal size for this program right now, with all the amenities it currently enjoys. But even better, and of no small importance: Georgetown would have an investment, not merely a rental relationship. The red, white, and blue of the current landlords across its display signage could instead become symbols of blue and gray: a visible commitment of Georgetown University in, and of, the Nation's Capital.
Were Georgetown to build its own arena, it's a $250 million effort and 20 years of red tape to get it done, were it even a priority to do so. This is a generational opportunity...if done right.
Yet, this entire story begins and continues with a University that cannot engage a conversation with itself on its own basketball facility, sitting forlorn at the back of the campus.
With the exception of the boathouse, nothing stops a conversation at Georgetown University like asking what the school will do about McDonough Gymnasium. It's not a zero-sum question that a downtown arena negates the need to address a 72 year old building in use by hundreds of students daily, it only amplifies it.
McDonough Gymnasium was built in 1951 to hold 3,600 participants at a school of comparable size, and and later as many as 4,000 if using seating along its second level. For any number of reasons, the gymnasium has been whittled down to just over 2,000 with no significant upgrade to the student experience. It is no longer suitable for many intercollegiate events, for academic events, for concerts, or even for recreational purposes. Even men's basketball practice, which effectively closed off the gym to students after the debut of Yates Field House, is no longer held there.
At some point, and sooner rather than later, a serious study needs to be initiated on the state of McDonough Gymnasium and its utility for the next 50 years. Numerous alumni, myself included, have proposed seating improvements as an opportunity for lightly attended non-conference games, but this is of little impact if the overall state of the building is not taken into account. Can the building serve the purpose it was built for, and how would it change going forward?
A reflexive answer that "any" McDonough renovation triggers the wrath of the Campus Plan is neither fair nor accurate--a review that reflects the student body of 2030 and not 1950 is not a siren call for thousands of fans to descend upon campus for home games. A university of 6,875 full time students has no single gathering place that can account for them, athletic or otherwise. If a 5,000 seat convocation center is a better deal, great; if not, let's do a real study and not just rely on supposition.
Another factor to consider: Upon the eventual demise of the Yates Field House, recreational space will be needed for thousands of students in the interim as the University considers one or more new facilities, and McDonough is a likely target. Short of moving the entire athletic department to Capital One Arena, identifying safe and sustainable office space for nearly 200 staff during this transition is not only practical but necessary.
For a University that is raising funds right now for a reconfigured Lauinger Library, a significant renovation and repurposing of the Leavey Center, and has rehabilitated nearly every Main Campus building in the last 40 years, kicking the can on McDonough yet again is incredibly short sighted, especially if the external pressures on men's basketball became untenable in any arena situation.
A serious discussion as the next 50 years of the gymnasium is more than appropriate, it's essential.
There is a segment of the readership who would, if pressed, would simply err on the side of modernity: follow Ted to Alexandria regardless. Wherever he lands, the new always bests the old. It begs a question: does location affect fan turnout?
In some regions, it does not. In Washington, it may. The cultural identities of Dallas-Ft. Worth or the San Francisco Bay Area are not what they are in the District, Maryland, and Virginia because the latter are places that have been distinct for centuries. For Monumental to say "it's it's just five more stops on the Yellow Line" betrays a significant lack of knowledge on the tectonic plates of the area: economically, racially, and in basic familiarity.
"In the years before I started writing about sports, I covered economics. And one thing I recall about economic development is that retaining business is a better priority than chasing it," wrote Washington Post columnist Kevin Blackistone. "We aren't New York. We aren't Los Angeles. And Virginia isn't D.C."
What is it, really?
The roots of the contemporary Georgetown fan base were planted in that initial move to Landover, a mix of alumni settling in the area after graduation, urban Washington, and a "Beltway Alumni" group of sorts in Montgomery and PG Counties. Georgetown Basketball's relocation to downtown, while lacking much in the way of statistical verity, was such that NE, SE, and the Montgomery/PG basketball fans didn't lose interest. Would they even care if Georgetown played in Alexandria?
Thanks to Ticketmaster and secondary markets, there are terabytes of data about ticket purchases: where you live, when you buy, frequency, reach, etc. While ticket manager Andrew Ciandella has enough on his plate right now, it's time for GU to do a deeper dive on just who and where the Georgetown basketball ticket buying public is located, right down to the zip code. I could make the argument that Georgetown doesn't have many fans in Alexandria City, Arlington or even Fairfax County, but without data, it's just an argument.
If downtown is a fight worth having, let the data make its case. If the data doesn't support the investment in a big arena, let's put this into context, too. If the Hoyas stand to lose another 25 percent of the fan base because sales are trending down in Maryland, find out now before big decisions have to be made.
Did Monumental ever undertake such a study? On the fringes, perhaps, but the media reports read that Leonsis was going where the money was. If Maryland offered him a better deal at National Harbor or Greenbelt, he'd be there. The risk is that the Wizards fan base is not as willing to travel across the river while hockey fans are suburban-friendly, and that the Caps are the priority in this move anyway.
Again, look to the data.
These are strange times for pro sports owners.
The rapid appreciation of sports team rights coupled with the intriguing (or insidious, take your pick) influx of gambling into the pro sports equation are causing a lot of owners to rethink their place in the business. Earlier this summer Michael Jordan cashed out of the Charlotte Hornets for an estimated $3 billion; he paid $275 million to join the team in 2010. Daniel Snyder sold the former Washington Redskins under pressure for $6 billion, a team that he paid an unheard-of $800 million for two decades earlier.
Three weeks ago, Mark Cuban was the fan-friendly owner of the Dallas Mavericks and a host on Shark Tank. It was Cuban that was all about making the team as much a part of Dallas as he could. Then, without fanfare, he quits Shark Tank and sells a majority of the team to a casino magnate who may move the team if she cannot get sports betting legalized in Texas.
Then there is Ted Leonsis. He paid $85 million for the Washington Capitals in 1999 and has stated dreams of taking Monumental Sports public for a $10 billion initial public offering. He has already invested in sports gaming and while downtown DC is not a growth market for wagering, perhaps Alexandria is...and if Youngkin greenlighted a casino down the street from Ted's Town, would anyone be surprised at this point?
In one sense, moving out of Washington to set his franchises up for an eventual sale and finding a group willing to buy him out for a majority share of a $10 billion entertainment company is best for business, but in another sense, a breach of the public trust, at least the trust north of the Potomac. He has assumed the mantle of both.
Yes, Ted Leonsis has a plan -- whether it is popular or providential is another matter. Georgetown Basketball needs a different kind of plan, and now, not 2028, is the time to craft one.
--JR
|
