It appears to be game over for the Northern Virginia arena — with the Washington Wizards and Capitals now poised to stay in the District.
The City of Alexandria announced Wednesday afternoon that it had "ended negotiations" on the development deal, which was anchored by a pro sports arena for D.C.’s professional basketball and hockey teams in the Potomac Yard neighborhood. D.C. officials, for their part, announced the teams’ intent to stay in the city later the same evening.
That means the Wizards and the Capitals will stay in downtown D.C. — and they’re likely to get a hefty $500 million to upgrade the existing Capital One Arena along with owner Monumental Sports & Entertainment’s commitment to stay in the city until 2050.
D.C. and Alexandria’s announcements are a much more definitive end to the proposal than the legislative stonewalling Virginia legislators were attempting. It’s a political loss for Virginia Gov. Glenn Youngkin, who has been championing the proposal, and a win for D.C. officials who have been fighting to keep the teams in a part of the city that depends on them.
D.C. Council Chair Phil Mendelson said the body would vote on the funding package, which would come out of D.C.'s capital budget. Mendelson and D.C. Mayor Muriel Bowser took a victory lap at a press conference Wednesday night after Alexandria’s announcement.
“We are going to be together for a long time,” Bowser said.
The D.C. deal also includes an agreement to add another 200,000 square feet of space to Capital One, 17 police officers patrolling the area during games, new practice facilities for the Wizards and restrictions on street vendors and performers who frequent the area.
Monumental CEO Ted Leonsis, who also spoke at the press conference, emphasized his good working relationship with Bowser, noting frequent meetings at the Waldorf hotel and open discussions about the company’s concerns regarding crime and noise near CapitalOne and the area’s struggles to rebound from the pandemic.
“D.C. did everything right from December on,” Leonsis said.
The relationship between Leonsis and D.C. officials hasn’t been entirely rosy, however. Last week, D.C. Attorney General Brian Schwalb sent a letter to Monumental arguing that plans to move the teams to Virginia and extricate the company from its decadeslong lease would violate the terms of the original agreement.
Leonsis said he would rather not speak about why the Virginia deal fell through, but still issued a few barbs.
“Virginia’s kind of two states. It’s Richmond and it’s Northern Virginia, and they need to get together,” he said. State Sen. L. Louise Lucas, a Portsmouth lawmaker who publicly opposed the deal and leads the Senate Finance committee — thus operates as a gatekeeper to the state’s funds — is notably not from either area.
“We negotiated a framework for this opportunity in good faith and participated in the process in Richmond in a way that preserved our integrity,” Alexandria Mayor Justin Wilson stated. “We trusted this process and are disappointed in what occurred between the Governor and General Assembly.”
This comes after lawmakers in Virginia’s General Assembly didn't include plans for the arena in their state budget proposal, dealing a blow to the project championed by Gov. Glenn Youngkin to lure pro sports to Northern Virginia.
In his statement, Wilson lamented that the proposal “got caught up in partisan warfare in Richmond,” ultimately preventing Alexandria officials from fully considering the project themselves.
Wilson and the Alexandria City Council expressed openness and general support for the arena concept, but have long insisted that the deal’s details — including accompanying support for transportation infrastructure improvements in the area, affordable housing commitments, and project-labor agreements for construction and hospitality workers at the site — needed to be fleshed out before they could support it. They also criticized what they said was inadequate representation for Alexandria on the sports authority board, which would own the arena and issue the bonds to pay for its construction.
Youngkin issued a statement in response to Wilson’s announcement that "personal and political agendas" were to blame for the deal falling through.
"A one-of-a-kind project bringing world-class athletes and entertainment, creating 30,000 jobs and $12 billion in economic activity just went up in smoke. This transformational project would have driven investment to every corner of the Commonwealth,” Youngkin said in the release. “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.’”
Lucas celebrated the arena deal’s end with a meme and a Bitmoji in two social media posts. Earlier this month, VPM News reported that Youngkin alluded to the president pro tempore as the project’s “single roadblock” to its success in the General Assembly.
It took only 105 days for the avenues by which the $2 billion proposal could have come to life to close off, one by one.
In December, Youngkin announced the project, which had been green-lit by a legislative commission, and then included it in his two-year budget proposal. General Assembly legislators put that proposal into stand-alone bills, which passed the Virginia House of Delegates, although with significant changes.
But in the Virginia Senate, Lucas exercised her power as chair of the Senate Finance and Appropriations Committee to not hear the bill at all. When the House of Delegates version came to the chamber, Lucas kept it off the docket once more.
At a March 7 press conference after a Legislature budget draft was proposed without the project, Youngkin said the deal was meeting a “single roadblock,” alluding to Lucas, who was standing behind the governor throughout the conference.
Then, when a Virginia state budget was passed later that week, it did not include the arena either. Youngkin could have reintroduced the proposal in budget amendments after the regular session ended earlier this month, but wouldn’t say if he would — instead saying it was the Senate’s “move” at that press conference.
Other key Democrats were more supportive of discussing the proposal, and they blamed the deal’s defeat on what they saw as the failure of the Youngkin administration to effectively work with the Legislature.
“I hope this is a wake up call for his administration so that Virginia is not left falling behind on economic development opportunities because he is unwilling to work with the legislative majorities voters put in place in November,” said Senate Majority Leader Scott Surovell (D–Fairfax), who carried that chamber’s legislation, in a statement.
Back in November, preliminary designs were shared with WAMU about what a revamped Capital One Arena could look like.
One of the goals would be to create better “sightlines” for those walking by on F Street to see what’s happening inside the arena, according to a source with knowledge of the potential renovation plans. That would mea all-glass building corners and large egresses.
Entrances and exits would be bigger and more accessible to allow for better traffic flow in and out of the arena, often an issue during crowded events. There could also be a public food court that would be open and available during regular business hours.
The new arena project drew sustained community opposition from Alexandria residents concerned about traffic, noise, public safety, and the idea of taxpayer subsidies for Ted Leonsis, the teams’ billionaire sports owner.
“When we looked more deeply at the financial cost, we thought, ‘Why in God's name should we taxpayers be the credit card for this, for this project?’” said Andrew Macdonald, co-founder of the Coalition to Stop the Arena, in an interview with WAMU earlier in the week.
But city leaders and some residents wanted to give the project a chance, seeing it as a possible catalyst for new commercial tax revenue even as office vacancies around Northern Virginia skyrocket. Compared to its neighbors in Arlington and Fairfax counties, Alexandria has a relatively weak commercial tax base, forcing it to rely heavily on residential taxpayers to keep up its services.
“We've been saying for years that, you know, we have this structural imbalance and we were gonna have to deal with it,” Wilson told WAMU last week.
Alexandria’s mayor also predicted the arena — and the community debates it touched off about growth and development — are likely to be front-and-center issues in June primary elections for Alexandria’s city council and its next mayor.
The death of the arena deal punts the question of what new development will go in Potomac Yard, a prime location next to a new Metro station. The city’s plan for the area envisions dense mixed-use development, but the site is currently occupied by a Target, other big-box retail, and parking lots.
Alexandria will “instead turn our focus to other efforts to bring quality commercial opportunities to the community in the future, to both diversify our tax base and protect our quality of life,” Wilson said in his Wednesday statement.