Sphere National Harbor Tax Incentives Approved by Prince George’s County in Maryland

Sphere National Harbor is a step closer to breaking ground after the Prince George’s County Council unanimously approved a resolution that will provide the immersive entertainment project with $200 million in tax incentives.

During the council’s Monday (July 27) meeting, the local government endorsed the formation of the National Harbor Extraordinary Development District in Oxon Hill. Situated on approximately 14 acres located directly north of the MGM National Harbor casino resort, the designation provides Sphere Entertainment Co. with $200 million in tax credits.

The ordinance requires Sphere Entertainment to invest at least $500 million in an immersive entertainment facility that has at least 3,000 seats, advanced display technology, including 4D visual effects, and “spherical LED screens.”

County Defends Incentives for Billionaire

Sphere Entertainment is controlled by the billionaire Dolan family, known for owning numerous iconic venues, including Radio City Music Hall, Madison Square Garden, and the Beacon and Chicago theaters. James Dolan, whose empire includes the NBA Knicks and NHL Rangers, is worth billions, prompting some in Prince George’s County to question why he needs tax breaks.

County officials have defended the tax increment financing (TIF) strategy as a sound bet that will deliver a big economic return.

An independent economic impact study completed by Ernst & Young (EY) agreed, finding that Dolan’s $1 billion Sphere National Harbor will generate a more than $1.3 billion annual economic impact for the county once operational and support 7,100 full- and part-time positions.

EY projects that Sphere National Harbor will generate $43.1 million in annual tax revenue for the county. That includes $12.7 million in property taxes, $29.5 million in admission and amusement taxes, and $900K in individual income and payroll taxes.

“My team did an amazing job of putting together a deal that protected the people of Prince George’s County, but also incentivized a major company to move such an iconic venue here to Prince George’s County,” County Executive Aisha Braveboy said in January. “Let’s just say our neighbors were in the mix, and other states across the country.”

The original 300-acre National Harbor development was also supported by a TIF arrangement. The county utilized TIF bonds to help fund the extensive public infrastructure needed for the sprawling mixed-use destination, which, along with MGM National Harbor, includes the Gaylord National Resort & Convention Center and the Capital Wheel.

How TIF Financing Works

Prince George’s County isn’t drawing $200 million out of its general funds to help Sphere Entertainment construct Sphere National Harbor. Instead, the county is issuing bonds to the company that will be repaid with future tax revenue generated by Sphere National Harbor.

Essentially, the county is betting on Sphere National Harbor’s success.

Sphere National Harbor’s big brother, Sphere Las Vegas, had a rough start, as the COVID pandemic ballooned construction costs to $2.3 billion. Since opening in 2023, Sphere Las Vegas has operated at a loss, as it writes down the immense costs incurred to open the venue.  

Sphere Entertainment continues to inch towards profitability, and Sphere Las Vegas has paid about $20 million a year in local property taxes to Clark County.