April 17th, 2024

NHL’s Capitals and NBA’s Wizards are staying in Washington after Virginia arena deal collapses

By Sarah Rankin, Matthew Barakat And Stephen Whyno, The Associated Press on March 27, 2024.

WASHINGTON (AP) – The NBA’s Washington Wizards and NHL’s Washington Capitals are staying in the District of Columbia.

Owner Ted Leonsis and Mayor Muriel Bowser announced the development at a news conference at Capital One Arena on Wednesday.

“District residents could not have been louder or clearer in expressing their desire for the teams to stay,” D.C. Attorney General Brian Schwalb said. “This outcome will have significant positive impacts on economic development, public safety, and overall District energy and spirit generated by the millions of people who attend games, shows, and concerts at Capital One Arena.”

The agreement between Monumental Sports & Entertainment and the city came as Alexandria officials said talks for a new arena that would have moved the teams to Virginia had ended. The District will pay $515 million to renovate and the nearly 30-year-old building, according to a letter Leonsis sent to employees obtained by The Associated Press.

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 city’s surrounding Chinatown neighborhood and safety and transportation upgrades, according to the letter.

Alexandria said earlier Wednesday that the Potomac Yard proposal “will not move forward,” a blow to Republican Virginia Gov. Glenn Youngkin, who announced months ago with fanfare the outlines of a proposal negotiated with the teams’ parent company to bring them across the Potomac River.

In a statement, the governor expressed disappointment and frustration over the demise of a plan he said would have created $12 billion in economic investment, laying blame with the Democratic-controlled state Legislature.

“This should have been our deal and our opportunity,” Youngkin said, adding: “But no, personal and political agendas drove away a deal with no upfront general fund money and no tax increases, that created tens of thousands of new jobs and billions in revenue for Virginia.”

Alexandria, which first announced the news, said in a statement posted to its website that it was disappointed in the outcome.

“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.”

In December, Youngkin and Leonsis announced at a public event that they had reached an understanding on the outlines of a plan to move the teams to a proposed new development district in Alexandria, with not only a new arena but also a practice facility and corporate headquarters for Monumental, plus a separate performing arts venue.

The proposal called for the General Assembly to set up an authority that would issue bonds to finance the majority 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.

But 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.

Leonsis was notably not on the ice Sunday for a ceremony honoring longtime Capitals winger T.J. Oshie for reaching the milestone of 1,000 NHL games. He was booed by some fans when his message to Oshie came up on arena video screens.

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Rankin reported from Richmond, Virginia, and Barakat reported from Falls Church, Virginia.

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