Prince George’s council takes a final vote on $215 million in Sphere bonds Tuesday

By Staff Reporter

LARGO, Md. — The Prince George’s County Council is scheduled to take a final vote Tuesday on up to $215 million in special obligation bonds tied to the proposed Sphere entertainment venue at National Harbor, as county analysts, residents and labor groups press for answers about what the public would get for its money.

The bill, CB-111-2026, would authorize the county to issue tax increment financing bonds for an “Immersive Entertainment Venue” at National Harbor and to refund the National Harbor project’s outstanding Series 2022 bonds, according to its legislative record. Its sponsors are the county executive and Council Members Sydney J. Harrison, Wanika Fisher, Jolene Ivey and Timothy J. Adams. A public hearing and final action are set for 10 a.m. Oct. 27.

The bonds would be repaid from National Harbor tax revenue rather than the county’s general fund, Capital News Service reported. County Executive Aisha N. Braveboy’s administration calls the financing “a smart way to do public investment” and says it “will not cost county taxpayers a dime in additional taxes,” on the county’s Sphere page.

The money

The 6,000-seat venue is expected to cost $1.4 billion, $1.2 billion of it privately financed, according to Capital News Service. Sphere Entertainment Co. is seeking about $184 million in county and state help, the news service reported, and National Harbor’s developer would contribute through a discounted land deal:

The bond authorization’s $215 million ceiling also covers refunding the 2022 National Harbor bonds, reserves and issuance costs, according to the bill’s title.

An Ernst & Young study projects more than $1.3 billion a year in economic impact in the county once the venue opens, about 7,100 supported jobs and $63 million a year in taxes paid to the county, according to the county’s summary. The study was commissioned by National Harbor’s developer, Peterson Companies, and relied in part on data from Sphere, Capital News Service reported, citing the Washington Business Journal.

The questions

The council’s own staff have raised questions. “What year does the county arrive at the break-even point on all relevant expenditures and revenues?” Arian Albear, the council’s director of legislative impact, asked at a Sept. 22 hearing, according to Capital News Service. A county policy and fiscal analysis flagged lower-than-projected revenue, cost overruns and delays as risks and said the final financing plan, debt-service schedule and revenue projections remained unclear, the news service reported.

“They show you benefits, but they don’t show you costs,” said Kasia Tarczynska, a senior research analyst at Good Jobs First, which studies public subsidies to companies.

About 80 people attended the Sept. 22 session, and residents told the news service they worry the venue would worsen traffic near the Woodrow Wilson Bridge, Route 210 and Oxon Hill Road.

Labor and community benefits

On Oct. 5 the council amended the bill to require a community benefits agreement with the county and a labor peace agreement covering developers, tenants, contractors and subcontractors, according to a council release. “A project of this magnitude could shape Prince George’s County for decades,” Council Chair Krystal Oriadha said.

A coalition including UNITE HERE Locals 25 and 23, SEIU 32BJ and the Baltimore-DC Metro Building Trades Council is also seeking project labor agreements for construction. “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, political director of UNITE HERE Local 25, according to Capital News Service. Paul Macchia, Sphere’s senior vice president of government affairs and social impact, said at the September hearing that the company expects union representation after it opens.

Council Member Wala Blegay, who supported the bill in a Sept. 29 committee vote, said requiring a project labor agreement could prompt Sphere to “walk away,” the news service reported. Council Member Ivey said she was “optimistic that this is going to actually happen and bring in significant revenue for the county.”

A separate bill on the same Oct. 27 hearing notice, CB-132-2026, would reserve a share of revenue attributable to the venue for a “Sphere Community Impact Fund” for communities within six miles, according to the council’s hearing notice.

The Inquisitor asked the council’s communications office and the offices of Council Members Blegay, Ivey, Fisher and the District 8 council office when the county expects to break even on the bonds, whether the community benefits agreement must be signed before bonds are issued and what share of revenue CB-132-2026 would reserve. This story will be updated with any responses.

Photo: National Harbor in 2019. Antony-22 / Wikimedia Commons, CC BY-SA 4.0.