WASHINGTON (AP) — When Ted Leonsis told D.C. Mayor Muriel Bowser late last year that he owned the NBA’s Washington Wizards and NHL’s Washington Capitals would likely leave Washington for Virginia, she told him no, they wouldn’t.
She turned out to be right after all.
The teams are staying in the District in the long run after Gov. Glenn Youngkin’s plan to lure them to Virginia failed 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.
In a statement, Alexandria, Virginia Mayor Justin Wilson says negotiations to relocate the NHL Capitals and Washington Wizards to Northern Virginia have ended.
“It’s a great day and I’m really relieved,” Leonsis said. “It 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 slated to include a 200,000-square-foot (18,580 square meter) 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 improvements.
“We are the current home and the future home of the Washington Capitals and the 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 D.C. Council will review the deal next week and is expected to pass it, Chairman Phil Mendelson said at the news conference.
The settlement between Monumental Sports & Entertainment and the city came as officials in Alexandria, just across the Potomac in Virginia, said negotiations for a new arena it would move the teams there was over.
Leonsis acknowledged that Virginia has a land advantage that the District of Columbia does not.
“You’re in this arms race to build bigger, better, higher quality, and we’re running out of space,” Leonsis said, referring to the new entertainment community the agreement envisions, which is not as large, as much as the 12 acres (4.9 hectares) that were dedicated to the arena in Virginia. “But it’s enough.”
The uber-wealthy entrepreneur said he generally wanted to avoid discussing Virginia, but he took several jabs at the state, where political divisions between Youngkin, a Republican, and the Democrats who control the General Assembly contributed to the plan’s failure.
“You can’t do it alone, and I felt like we were really in a good partnership,” Leonsis said, “as opposed to where I thought I was going to have a great partnership.”
The development is a blow to Youngkin, who announced months ago with fanfare outlining the proposal from Alexandria that he had called a “once-in-a-lifetime opportunity” to bring two major professional sports teams to the nation’s most populous state without one.
In a statement Wednesday, the governor expressed frustration and frustration, blaming 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 in economic investment, let’s make it happen.’ But no, personal and political goals drove the deal away, he said.
Democrats responded by saying Youngkin mismanaged the proposal from the start. House Speaker Don Scott said he was struck by Youngkin’s statement, which he said sounded like it was written by a teenager, and bristled at the suggestion that the Legislature should have easily signed off on the deal.
“He’s lost his sense of good judgment right now,” said Scott, who had not fully approved the deal but expressed openness to it.
He added that from the tone of the statement, he expected Youngkin might retaliate by vetoing the budget lawmakers send it earlier this month.
Alexandria, which first broke the news, said in a statement posted on its website that it was also disappointed.
“We negotiated a framework for this opportunity in good faith and participated in the Richmond process in a manner that preserved our integrity,” the statement said. “We trusted this process and we’re disappointed in what happened between the governor and the General Assembly.”
Matt Kelly, chief executive of publicly traded real estate company JBG SMITH, a partner in the Alexandria deal as the proposed developer, issued a fiery statement blaming “partisan politics” and raising the prospect that “potential pay-to-play” influences had finger in the failure of the project.
“Beyond the arena, state and local governments will lose needed tax revenue, confidence in economic development and what could be Virginia’s last best chance at a professional sports franchise for at least a generation,” Kelly said.
The Virginia plan called for a $2 billion development district on the Potomac Yard portion of Alexandria, with not only a new arena, but also a training facility and corporate headquarters for Monumental, plus a separate performing arts venue.
The General Assembly was asked to create an authority to issue bonds to finance the bulk of the project, backed in part by city and state governments and paid for through a combination of projected tax revenue recovered from the development.
Youngkin and other supporters said the development would generate tens of thousands of jobs, along with new tax revenue beyond what would be needed to cover the financing.
The plan met with resistance from the trade unionsAlexandria residents concerned about traffic and D.C. officials who feared that losing the teams would devastated downtown Washington.
Youngkin and other supporters also failed to win over powerful Democratic Sen. L. Louise Lucas of Portsmouth, who chairs the Senate’s budget-writing committee. She uses this position to block the legislation, citing a number of concerns, but most notably the deal’s financing structure: Using moral obligation bonds puts taxpayers and the state’s finances at risk, Lucas said.
Lucas celebrated the motion being dropped on Wednesday. On social media, she posted a cartoon of herself swinging a basketball with the word “REJECTED” superimposed on it. She wrote, “As Monumental announces today that they are staying in Washington, we celebrate in Virginia that we avoided the Monumental disaster!”
Leonsis has changed his tone on social media in recent days, pointing to large crowds at Capital One Arena this month for everything from the Capitals and Wizards to the ACC basketball tournament and a Zach Bryan concert. He posted on Wednesday that Monumental expects over 400,000 fans to pass through the turnstiles in March.
He and Bowser began talking about keeping the teams in the District shortly after Virginia revealed its offer, including through regular meetings in the lobby of a luxury hotel, Leonsis said.
“Until 10 minutes ago, I had never signed a piece of paper,” Leonsis said.
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Rankin reported from Richmond, Virginia, and Barakat reported from Falls Church, Virginia.