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County Reaches Multimillion Dollar Redskins Deal

July 5, 2012 by Blue Ridge Leader filed under Loudoun County, News 1 Comment

By Mary M. Bathory Vidaver

On June 19, the Loudoun County Board of Supervisors voted 8-0-1 to enter into an 8-year marketing agreement with the Washington Redskins at a cost to the County of $2 million, payable in $500,000 installments over the first four years. The agreement is part of a $12.4 million initiative spearheaded by Gov. Robert F. McDonnell (R).

McDonnell announced the initiative as a multi-part deal to retain the Redskins corporate headquarters, training facilities, and summer training camp in Virginia and to assist with a planned $30 million expansion of the team’s training facilities. All three are currently located at Redskins Park in Ashburn. According to a press release from the governor’s Office, the Redskins have agreed to keep their headquarters and training facilities at the current location. However, the summer training camp will shift to the City of Richmond beginning in 2013. The City of Richmond has agreed to contribute $400,000 to McDonnell’s initiative. In a 2010 presentation to the Board of Supervisors, county staff and the Redskins calculated that the summer training camp generated 20,000 visitors and an estimated $1.13 million in spending annually.

The Board item from the June 19 meeting references a Memorandum of Understanding between the State and the Redskins organization that more fully describes “the larger, multi-pronged package.” The item stated that the county had requested a copy of the MOU from both the governor’s Office and the Redskins, but had not received a copy. As of June 24, Anna Nissinen, Loudoun County public affairs and communications officer, stated that the county had still not received a copy; Jeff Caldwell, a spokesperson from the Gov.’s Office, stated no written document yet existed as details of the agreement are still pending.

Caldwell did not respond to a question regarding which of the announced portions of the agreement in principle might still be subject to change. However, Board of Supervisors Chairman Scott York (R-At-Large), stated that the county’s “marketing agreement is an eight-year agreement with the Skins only. What the state does with the Skins is between those two parties and will have no impact on our agreement.”

McDonnell made the recruitment and retention of business a cornerstone of his campaign in 2009. [However, in this case, recent news reports indicate that McDonnell had neither the undivided support of the General Assembly nor members of his party. A recent article in The Washington Post reports that in a rare act of bipartisanship the House of Delegates twice rejected the proposal earlier this year.]

According to the Virginia Public Access Project, (VPAP) McDonnell received $50,000 in campaign contributions from the Redskins organization, making the team one of his largest individual corporate donors. It was also the largest donation recorded by the team on VPAP, some three times the amount it contributed to Mark Warner’s One Virginia Political Action Committee (PAC) and five times the amount it contributed to the Virginia Republican Party’s Virginia Joint Republican Caucus. In addition, McDonnell and his PAC, Opportunity Virginia, received $185,000 in contributions from Redskins co-owner, Dwight Schar.

The state portion of the deal was originally announced as a $4 million economic development and job creation grant. However, based on the board item and comments made by supervisors and staff at the June 19 meeting, it appears that the Virginia Lottery has also agreed to contribute $6 million to the effort for a total state commitment of $10 million.

John Hagerty, a spokesperson for Virginia Lottery, explained that the $6 million figure represents a 4-year agreement to continue the lottery’s successful Redskins-themed scratcher game, which has generated over $58 million in revenue over three years at an approximate cost of $6.6 million paid to the Redskins. According to Hagerty, the $1.5 million per year price tag of the new agreement includes the right to use the Redskins’ logo on the scratcher tickets, media promotions in the Northern Virginia market, sponsorship and special event opportunities, and prizes for lottery players, such as season tickets, individual home game tickets, and seats at the 2013 NFL Draft.

Under a 2000 amendment to the Virginia Constitution endorsed by 80 percent of Virginia voters, all Virginia Lottery proceeds (the funds remaining after winner pay-outs and operating expenses) are reserved for educational purposes. In short, the greater expenses, the fewer funds available for allocation to the public education system. According to Hagerty, the Virginia Lottery currently offers 50 different scratcher games and sales of the Redskins game tickets are on a par with the others.

It is not yet clear when the County became involved in the governor’s negotiations with the Redskins. County staff and Chairman York attended at least one meeting with the governor. in 2011 to discuss a possible public-private partnership for the construction of an indoor training facility. According to a source with knowledge of those discussions, the Redskins were to contribute the site, while the County would build the facility. Public access to the facility, when not in use by the Redskins, would be negotiated. It does not appear that the last Board chose to act on that proposal. This was confirmed by Chairman York, who stated that the June 19 agreement supersedes those discussions.

In August 2011, the Redskins submitted plans to the County’s Building and Development Department for an indoor facility housed in an inflatable bubble with a public announcement made by team General Manager Bruce Allen the following month. The “bubble” opened this May. At that time, Allen indicated it was only the first of many upgrades planned for the Ashburn facility.

The June 19 vote is not the first sponsorship agreement between the county and the Redskins. In 2009 the Board of Supervisors agreed to a 2-year, $250,000 sponsorship deal. That deal was negotiated by a team made up of staff from county administration, the Department of Economic Development (DED), Loudoun Convention and Visitors Association (LCVA) and members of the CEO Cabinet. The latter is an advisory group of local CEOs established by the County DED. In 2010, however, after members of the Board of Supervisors began raising questions about the group’s refusal to observe open meeting laws and other requirements of the Virginia Freedom of Information Act (FOIA), the Cabinet transferred its affiliation to the Chamber of Commerce.

The new agreement, while twice the cost of the older agreement, includes additional features, such as four annual business development meetings at the park, the use of the indoor practice facility for up to four recreational or sporting events, a limited number of game tickets each year for four home games at FedEx Field, and presenting sponsor status at one home game each year. This last includes a private suite with 24 tickets. The 2012 agreement also promises an appearance by a Redskin team executive, coach or member of the player personnel department at a Loudoun County Chamber of Commerce event.

The Chamber of Commerce is a private membership organization, whose events generally require payment by attendees. Attendees, who are members of the Chamber, generally pay $10-$50 per event. And though non-members can attend most events with the payment of an additional surcharge.

In May 2010, under the county’s partnership agreement with the Redskins, the Chamber booked team coach Mike Shanahan as the featured speaker in its Leadership Luncheon series. Individual tickets were sold to members at $45 and non-members at $65. In addition, the Chamber offered two sponsorship opportunities, a gold sponsorship for $750 and table sponsorships at $450. An email request to the Chamber of Commerce for information as to what purpose receipts in excess of luncheon expenses might be used went unanswered.

When asked to comment on the use of public funds to support the activities of a private, membership organization, a major purpose of which is to lobby the government, Board Chairman York stated, that the reference in the Draft Agreement to the Chamber of Commerce was “an example, where a member of the Skins could appear.” He further stated, “We [the County] do joint activities to promote economic development with the Chamber. I have no issue with using the hotel tax revenues to promote that which helps to put heads in beads, and as we have learned over the years, businesses make up a huge part of the numbers of overnight stays in the county.”

Like the 2009 agreement, the new agreement will also be funded with Restricted Use Transient Occupancy Tax (TOT) revenues rather than property tax revenues. The TOT is a county tax on “limited-stay facilities,” such as hotel rooms. Of the percent tax charged, 2 percent is allocated to the county’s General Fund and used to fund the county’s annual operations. These are known as Unrestricted TOT funds. The remaining 3 percent of the tax collected, the Restricted Use TOT funds, are earmarked for activities that promote “tourism, travel, or business that generates tourism within the County.” According to county budget documents, the County receives approximately $2 to $4 million each year in Restricted Use TOT funds.

By a Memorandum of Understanding, the county transfers 75 percent of the Restricted Use TOT funds received each year to LCVA (now known as Visit Loudoun). This is a private industry association, which promotes tourism in Loudoun County. Its membership includes local hotels, B&B’s, wineries, and other tourism-related entities. The Board of Supervisors determines how to allocate the remaining funds. In past years the board has approved their disbursement to individual organizations, such as America’s Cup Polo, Journey Through Hallowed Ground, and the Round Hill Arts Center, for special projects, such as the Wayfinding signage program and the Sports Tournament Grants Program, and for marketing materials, such as the Farm Tour brochures.

With the financial crisis and the need to provide property tax relief, staff recommended, and the board approved, the funds appropriation for staff salaries and operations. These appropriations included the Franklin Parks Visual and Performing Arts Center, the Loudoun Heritage Farm Museum, a Special Events Coordinator position within Fire & Rescue, existing DED staff positions which provided support for tourism activities, and approximately $250,000 to enhance DED’s efforts to increase the County’s international visibility.

In 2008 as the Board debated the initial agreement with the Redskins, several supervisors questioned whether the use of TOT revenues to fund corporate recruitment activities met the spirit or the letter of the state law allowing the county to impose such a tax, especially since Visit Loudoun, using its own allocation of TOT funds, had already entered into a sponsorship agreement with the team. Supporters of the agreement argued that since the bulk of TOT funds were received from business travelers, the agreement qualified as promotion of business tourism. However, the staff report presented to the Board of Supervisors highlighted how the sponsorship would help county DED staff reach executives who might be interested in locating their businesses in Loudoun County and provide a unique destination for “schmoozing” with prospects.

In order to ensure that the funds be used strictly for business tourism, then Blue Ridge Supervisor Jim Burton made a motion that the future proposal focus solely on the tourism aspects – no skyboxes, no annual event for “business leaders and targeted prospects,” no “Off Day Tours” for VIP corporate guests, no participation in sponsor events. This motion failed 3-5-1. As a result, the agreement contained a number of hospitality features, including a hospitality event at Redskins Park for up to 200 invitees, fivetours of Redskin Park for up to 10 invitees per tour, and invitations to Redskin Corporate Sponsor events for an agreed-upon number of County personnel and guests.

The Blue Ridge Leader submitted a public records request to the county for the names of invitees to these hospitality events, including designation of those attendees who were business prospects and whether those prospects established or expanded business activities in Loudoun County.
The county responded with a list of attendees to the 2009 VIP Reception held at Redskins Park and a copy of a May 2010 presentation to the board evaluating the benefits accrued from the partnership. The response also noted that the county had failed to take advantage of the opportunity to hold a VIP Reception in 2010.

However, the county withheld information about participants in the small tours and Redskins sponsorship events under a clause within the Freedom of Information Act that exempts “memoranda, working papers or other records related to businesses that are considering locating or expanding in Virginia, prepared by a public body, where competition or bargaining is involved and where, if such records are made public, the financial interest of the public body would be adversely affected.” An amended request was submitted asking for just the names of County staff, elected officials and/or members of the Economic Development Commission and CEO Cabinet. The county responded that no such records existed.

The public record indicates that neither the last Board as part of the May 2010 evaluation nor the current Board as part of its June 19 decision requested or received such information as a means to evaluate the effectiveness of the investment.

1 comment

  1. Patrick says:

    Mary Vadiver’s deep digging shows how the richest team in the National Football League used campaign contributions and luxury box tickets to wheedle $16 million in taxpayer funds out of Richmond and Loudoun Republican politicians. Leesburg Today, the Loudoun Times-Mirror and the Washington Post simply relied on government public relations handouts to promote what is a very smelly deal. Most outrageous is the $6.6 million the Virginia Lottery paid Billionaire Danny Snyder to use the Redskin logo on scratch tickets. $6.6 million! Under the law enforced by Virginia Gov. Robert McDonnell, Lottery money is only supposed to go to Virginia education. But Vadiver’s reporting shows Snyder gave McDonnell’s campaign $50,000 and Snyder’s partner, Dwight Schar, gave his campaign another $185,000. For the political investment of only $235,000 , Snyder and Schar have racked up $10 million from Richmond including $4 million from Richmond city.
    And the budget cutting Loudoun Board of Supervisors handed Snyder a $2 million deal that includes 24 tickets for a game to be viewed from luxury box suites. What happened to Redskin owners such as Middleburg’s Jack Kent Cooke who used his own money to build the Redskin stadium and cover all team expenses.

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