03/27/24 09:06:00
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03/27 21:05 CDT NHL's Capitals and NBA's Wizards are staying in Washington
after Virginia arena deal collapses
NHL's Capitals and NBA's Wizards are staying in Washington after Virginia arena
deal collapses
By STEPHEN WHYNO, SARAH RANKIN and MATTHEW BARAKAT
Associated Press
WASHINGTON (AP) --- When Ted Leonsis told District of Columbia Mayor Muriel
Bowser late last year that the NBA's Washington Wizards and NHL's Washington
Capitals he owns would probably be leaving Washington for Virginia, she told
him no, they would not.
Ultimately, she proved to be right.
The teams are staying in the District for the long term after Gov. Glenn
Youngkin's plan to lure them to Virginia imploded and the city and ownership
reached an agreement on a $515 million, publicly funded arena project.
Bowser and Leonsis signed a letter of intent Wednesday for the deal, which
keeps the teams in the District through 2050. They announced the development at
a joint news conference at Capital One Arena, the teams' current home, minutes
later.
"It's a great day, and I'm really relieved," Leonsis said. "This was not only
the right thing for the community, the right thing for the city, the right
thing for us, it's a really smart business deal."
The project is set to include 200,000 square feet (18,580 square meters) of
expansion of the arena complex into the nearby Gallery Place space, the
creation of an entertainment district in the surrounding Chinatown neighborhood
and safety and transportation upgrades.
"We are the current home and the future home of the Washington Capitals and
Washington Wizards," said Bowser, who donned a Wizards jersey. "As Ted likes to
say, we're going to be together for a long time."
The Council of the District of Columbia will take up the deal next week and is
expected to pass it, Chairman Phil Mendelson said at the news conference.
The agreement between Monumental Sports & Entertainment and the city came as
officials in Alexandria, just across the Potomac in Virginia, said talks for a
new arena that would have moved the teams there had ended.
Leonsis acknowledged Virginia had land as an advantage D.C. didn't.
"You're in this arms race to build bigger and better and higher quality and
we've been running out of space," Leonsis said, referencing the new
entertainment community the agreement envisions that is not nearly as big as
the 12 acres (4.9 hectares) that were dedicated to the arena in Virginia. "But
it's enough."
The ultrawealthy entrepreneur said he generally wanted to avoid discussing
Virginia but did throw a few jabs at the state, where political divisions
between Youngkin, a Republican, and Democrats who control the General Assembly
contributed to the plan's demise.
"You can't do it alone, and I felt that we were really in a good partnership,"
Leonsis said, "as opposed to where I thought I would have a great partnership."
The development is blow to Youngkin, who announced months ago with fanfare the
outlines of the Alexandria proposal he'd called a "once-in-a-lifetime"
opportunity to bring two major pro sports teams to the nation's most populous
state without one.
In a statement Wednesday, the governor expressed disappointment and
frustration, laying blame with Democrats.
"This should have been our deal and our opportunity, all the General Assembly
had to do was say: ?thank you, Monumental, for wanting to come to Virginia and
create $12 billion of economic investment, let's work it out.' But no, personal
and political agendas drove away" the deal, he said.
Democrats responded by saying Youngkin had mismanaged the proposal from the
start. House Speaker Don Scott said he was blown away by Youngkin's statement,
which he said seemed like it had been written by a teenager, and bristled at
the suggestion that the Legislature should have given the deal an easy sign-off.
"He has lost his sense of good judgement right now," said Scott, who had not
fully endorsed the deal but expressed openness to it.
He added that from the tone of the statement, he expects Youngkin might
retaliate by vetoing the budget lawmakers sent him earlier this month.
Alexandria, which first announced the news, said in a statement posted to its
website that it was also disappointed.
"We negotiated a framework for this opportunity in good faith and participated
in the process in Richmond in a way that preserved our integrity," the
statement said. "We trusted this process and are disappointed in what occurred
between the Governor and General Assembly."
Matt Kelly, the CEO of publicly traded real estate company JBG SMITH, a partner
to the Alexandria deal as the proposed developer, issued a blistering statement
that laid blame on "partisan politics" and raised the prospect that "potential
pay-to-play" influences had a hand in the project's demise.
"Beyond the arena, state and local governments will lose needed tax revenue,
economic development credibility, and what could have been Virginia's last best
chance to land a professional sports franchise for at least a generation,"
Kelly said.
The Virginia plan called for the creation of a $2 billion development district
in the Potomac Yard section of Alexandria, with not only a new arena but also a
practice facility and corporate headquarters for Monumental, plus a separate
performing arts venue.
The General Assembly was asked to set up an authority that would issue bonds to
finance most of the project, backed partly by the city and state governments
and repaid through a mix of projected tax revenues recaptured from the
development.
Youngkin and other supporters said the development would generate tens of
thousands of jobs, along with new tax revenues beyond what would have been
needed to cover the financing.
The plan faced opposition from labor unions, Alexandria residents concerned
about traffic and D.C. officials who feared the loss of the teams would
devastate downtown Washington.
Youngkin and other backers also failed to win over powerful Democratic Sen. L.
Louise Lucas, of Portsmouth, who chairs the Senate's budget-writing committee.
She used that position to block the legislation, citing a range of concerns but
foremost the financing structure of the deal: The use of moral obligation bonds
put taxpayers and the state's finances at risk, Lucas said.
Lucas celebrated the proposal's demise Wednesday. On social media, she posted a
cartoon of herself swatting away a basketball with the word "REJECTED"
superimposed. She wrote, "As Monumental announces today they are staying in
Washington DC we are celebrating in Virginia that we avoided the Monumental
Disaster!"
Leonsis had shifted his tone on social media in recent days, pointing to large
crowds in Capital One Arena this month for everything from the Capitals and
Wizards to ACC Tournament basketball and a Zach Bryan concert. He posted
Wednesday that Monumental expected over 400,000 fans to pass through turnstiles
in March.
He and Bowser began talks about keeping the teams in the District not long
after Virginia disclosed its offer, including through regular meetings in a
posh hotel lobby, Leonsis said.
"Until 10 minutes ago, I had never signed a piece of paper," Leonsis said.
___
Rankin reported from Richmond, Virginia, and Barakat reported from Falls
Church, Virginia.
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