District of Columbia:
Status of Sports Arena Project
AIMD-94-192: Published: Sep 15, 1994. Publicly Released: Sep 15, 1994.
- Full Report:
Pursuant to a congressional request, GAO provided information on the District of Columbia's proposal to build a sports arena, focusing on the proposal's status, cost and benefit projections, and financing scheme.
GAO found that: (1) the District is unable to make precise cost and benefit projections for its proposed sports arena because the proposal is in the early stages of development; (2) although the proposed sports arena should be able to generate sufficient direct revenue to cover known expenses, many unknown factors could significantly affect revenue projections; (3) the sports arena's construction costs are tentative because formal feasibility studies, environmental impact studies, and an architectural and engineering design have not been completed; (4) the proposed cost projections do not include needed infrastructure changes or land acquisition costs, and operational costs have not been fully determined; (5) it could not determine what impact National Capitol Development Corporation losses would have on the District; (6) the District plans to use revenue bonds backed by specific District taxes to finance the arena project; (7) the District's high debt and obligations to other programs make using general obligation bonds to finance the project unlikely; (8) further development of the project will be needed before detailed financing arrangements can be identified; and (9) the District needs to authorize contracts for various studies to assess the project's costs and benefits.