By SOL GARCIA-TERRAZAS
Capital News Service
As Prince George’s County considers millions in public financing for a proposed Sphere theater at National Harbor, county officials, residents and labor groups are asking whether the costs outweigh the benefits.
The proposed 6,000-seat entertainment venue is expected to cost $1.4 billion, with $1.2 billion coming from private financing. Sphere Entertainment Co. wants $184 million in government assistance from Prince George’s County and the state of Maryland, which includes $130 million in county tax increment financing bonds, a $40 million county-owned parking garage, and $13.5 million in state funding. The National Harbor developer, Peterson Companies, plans to provide an estimated $15 million contribution through a discounted land transaction.
The Prince George’s County Council is scheduled to vote on the proposed Sphere financing legislation on Oct. 27. Some residents question whether public investment in the project is justified.
“If taxpayers are being asked to chip in to this project, first off, I don’t understand why,” David Watkins, 75, of Fort Washington, said in an interview. “I want to know how those dollars are going to be spent, and what is the benefit to the residents.”
For residents around National Harbor, however, the debate extends beyond the project’s price tag. About 80 people attended a county hearing on September 22 about the Sphere project, filling most of the committee room and spilling into an overflow room. Nearly 40 people signed up to speak. Residents worried the project would worsen traffic and transportation problems in the congested National Harbor community.
“Traffic is already bad enough crossing Woodrow Wilson Bridge, not to mention 210 and Oxon Hill Road,” said Sharon Lawrence, president of the Livingston Woods Homeowners Association and an Oxon Hill Resident of more than 33 years. “An additional attraction to our area will only exacerbate an already horrendous situation.”
Del. Jamila Woods, D-Prince George’s County, represents Oxon Hill and National Harbor and supports the project. But Woods wants Sphere to sign agreements with labor unions before Prince George’s County agrees to the financing. Woods said the venue could bring “much-needed job opportunities” and revenue to the county, but argued that public incentives of that size should create an investment in surrounding communities.
Sphere Entertainment has promoted the project as a major economic opportunity for the county. An economic impact study by Ernst & Young projects more than $1.3 billion in annual economic impact over three years and around $128 million in annual state and local tax revenue from Sphere operations and visitor spending. About $52.2 million of that revenue would go directly to Prince George’s County.
Sphere has pointed to those projections to make the case for the county’s investment. “That means that the county will have its investment fully paid back in a matter of a few years just from tax collections,” Paul Macchia, Sphere Entertainment’s senior vice president of government affairs and social impact, said at the September 22 hearing.
The study was commissioned by National Harbor developer Peterson Companies and relied in part on data provided by Sphere, according to the Washington Business Journal. Karen Laureano-Rikardsen, a Sphere spokesperson in New York, declined comment.
Kasia Tarczynska, a senior research analyst at Good Jobs First, a group that researches corporate agreements with governments, said the Sphere economic projections don’t answer a central question: whether the public investment is worth the cost. “They show you benefits, but they don’t show you costs,” Tarczynska said. She said an independent cost-benefit analysis should account for the public resources committed to the project and what those resources could otherwise support.
County staff have also raised similar questions about how those projections translate into financial benefit for the county, citing several unresolved issues, some structural to the financing plan itself.
“What year does the county arrive at the break-even point on all relevant expenditures and revenues?” Arian Albear, the Prince George’s County Council’s director of legislative impact, asked during the county hearing.
County legislation introduced Sept. 1 would authorize up to $215 million in special obligation bonds. Those bonds would be repaid through National Harbor tax revenues rather than the county’s general fund. The bonds would also help pay Sphere-related costs while refinancing existing National Harbor debt.
A county policy and fiscal analysis also identified potential risks, including lower-than-projected revenue, construction cost overruns, and project delays. The analysis says several details remain unclear, including the final financing plan, debt-service schedule and revenue projections.
Labor groups have also become central to the debate over the proposed legislation, pushing for stronger worker protections as a requirement for public financing. A coalition of labor unions, including UNITE HERE Local 25 and 23, Service Employees International Union’s 32BJ unit, and the Baltimore-DC Metro Building Trades Council, is seeking project labor agreements for construction workers and labor peace agreements for employees who would work at the venue.
“We don’t believe that the county should be giving money to a five-billion-dollar corporation without these strong labor agreements in place,” said Samuel Stern, the political director with UNITE HERE Local 25.
Sphere has emphasized its relationship with organized labor. At the county hearing, Macchia said the company expects “a very robust contingent of unionized workers” during construction and union representation after the venue opens. “We will have unions representing our employees after we open our doors,” Macchia said.
Other councilmembers supported the Sphere project as long as the labor issues are resolved. “It’s hard, you know, we want to make sure this Sphere is coming to the county, and we want to make sure labor is supported, and there are good labor opportunities for our unions, for our black businesses,” said Wanika B. Fisher, a Prince George’s County Council member.
Jolene Ivey, an at-large Prince George’s County Council member, said the Sphere is important for the county’s future. “I’m optimistic that this is going to actually happen and bring in significant revenue for the county, which we really need because right now most of the money we get is from homeowners’ taxes and we need to shift that to corporate taxes,” she said.
Wala Blegay, another at-large Prince George’s County Council member, supported the project in a preliminary committee vote on September 29 but said infrastructure issues need to be resolved. She was worried that requiring a project labor contract would prompt the Sphere to walk away. “We do know that this has been a contentious issue that would have Sphere walk away, and we cannot afford to have Sphere walk away in such an important project that could bring jobs and opportunity for our small businesses,” Blegay said.
