The Board of Supervisors’ finance committee has recommended deferring Loudoun United’s rent payments at Philip A. Bolen Memorial Park near Leesburg for the year, following the cancelation of the 2020 season.
Loudoun United plays in a stadium owned by the county government, which has already sunk $25 million to financing its construction and bring the team, as well as headquarters and training facilities for major league men’s team DC United to the county. After working out a deal in secret, county supervisors voted in January 2018 to approve $15 million in debt financing for the project, adding another $10 million in December 2019 when the project ran over budget in exchange for bringing a women’s soccer team, Washington Spirit—which had already announced a move into the park—to Loudoun, as well as a new marketing agreement.
At the time of that vote the county had also seen cost overruns in its part of the project, including grading, building parking areas and walkways, and connecting utilities. Those overruns ratcheted an initial estimate of $7 million for that work up to $17 million.
The team agreed to pay back all of that cost over the next 30 years, paying rent to play in the county-owned stadium. The first payment was due in November of last year and was paid.
Now, the finance committee has recommended deferring the $621,233 the team was going to pay in rent this year, spreading that payment out over the next six years instead, with at least 8 percent interest.
Treasurer H. Roger Zurn called into the finance committee’s virtual meeting Tuesday to warn against the deal.
“This is a different time right now than we’ve ever faced before,” Zurn said. “Certainly for the longest-term board members, which has been eight years, the county’s been flush with cash. You’ve been able to do pretty much anything you wanted at any time. But these are different times.”
He told supervisors in the face of the COVID-19 pandemic, the county government needs to conserve money wherever it can and protect the taxpayer’s dollar. And, he pointed out, the first payment due next year is in March—before the 2021 season has begun. He predicted the team will be right back asking for another deferral then.
“These are more difficult times than we’ve ever encountered, and I’ve been through some difficult times,” said Zurn, Loudoun’s longest-serving elected official and a former Sterling District supervisor. “Starting back in 1990, we had a complete downturn. This has the potential to be worse. It’s absolutely essential now that the mindset becomes, wherever we can conserve money, we need to do it.”
However, supporters of the proposal likened the agreement more to landlords deferring rent so that their tenants will be able to pay eventually, rather than go bankrupt. Representatives from Loudoun United have said they would use the money saved this year from the deferred rent to keep people in the organization employed.
“I think that this is a partnership to value,” said Supervisor Juli E. Briskman (D-Algonkian). “It brings our quality of life and the stature of our county up to work with these partners and to have these sorts of partnerships.”
Committee Chairman Matthew F. Letourneau (R-Dulles) said other landlords have been deferring rent for tenants so that they will get paid eventually, rather than force tenants into bankruptcy and never get paid. And, he said, “this is just the beginning—this is not the National Football League, this is not even major league baseball, there is not a huge wad of cash sitting there from prior seasons.” And, he pointed out, Loudoun United’s situation is also partially caused by the government.
“This is akin to having a landlord who has locked out a tenant and still expects the tenant to pay, because the field is closed, the stadium is closed,” Letourneau said. “Even if the team wanted to play tomorrow, we wouldn’t let them, because the government has closed it. So, is it really fair to expect a tenant to make a payment for a service, and for a property, and for a location that we’re not even providing them?”
Only County Chairwoman Phyllis J. Randall (D-At Large) opposed the extension.
“I just would have a hard time talking to some citizens who don’t have an option [on rent] but who are in bad financial straits,” Randall said. “… It wouldn’t feel like we’re kind of all doing this together.”
The committee voted 4-1, recommending the deferral agreement to the full Board of Supervisors for a vote.