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Arena proposal that caused so much fuss likely just a ‘bargaining chip’

Caps players at ease on the ice.
Olivia Dileo
VCU Capital News Service
The Washington Capitals practicing at MedStar Capitals Iceplex in Arlington, Virginia. The Capitals will stay in Washington, D.C. after a proposed Virginia arena flops.

RICHMOND — Virginia remains one of at least 20 states without a major league sports team after a recent multibillion-dollar deal collapsed.

Many people were skeptical of Gov. Glenn Youngkin’s proposal due to the use of taxpayer money to build a private sports venue, potential traffic congestion, a perceived betrayal of the fanbase and uncertainty of the team’s long-term commitment.

Some wondered if the potential pitch was just a well-played bargaining chip to help team owner Ted Leonsis get what he wanted from officials in Washington, D.C.

Days after the Virginia General Assembly extinguished the governor’s plan to relocate the teams, Mayor Muriel Bowser, D.C. Council Chair Phil Mendelson and Leonsis announced the Washington Wizards basketball and Washington Capitals hockey teams will remain in Capital One Arena until at least 2050.

The district’s City Council voted unanimously to accept the terms and pledge $515 million.

The money will go toward an improved fan experience, enhanced player spaces and strengthened public safety measures. Monumental Sports & Entertainment, which manages the teams and is owned by Leonsis, will put around $300 million toward a training facility on the arena’s top floor.

No one seemed to want the arena to move, except the people who directly benefited from it, including Virginia Tech, whose upcoming Innovation Campus sits near the proposed entertainment district. Most statements were issued through press releases.

An informal poll from four neighborhood civic associations found that 58% opposed the arena, 29% supported it, and 12% had mixed feelings. The associations sent the poll to 1,244 association members, and it had a 43% response rate.

History of the deal

Youngkin officially announced the deal on Dec. 13, 2023, and it was considered officially dead on March 27, although it seemed unlikely to advance after it was boxed out in the Senate.

Youngkin attributed “personal and political agendas” to the deal’s collapse.

The $2 billion public-private partnership deal would have created a sports and entertainment district in Potomac Yard in Alexandria — just a bridge and 6 miles away from the current arena.

The deal included an arena for both teams, a media studio for the Monumental Sports Network, a Wizards practice facility, a performing arts venue and an esports facility.

The plan also included restaurants, retail, hotels and other communal spaces.

In December 2022, a state economic development official started searching for potential sports arena locations for a top-secret project nicknamed “Project Potter,” according to the Washington Post.

The city of Alexandria began an economic and fiscal impact study in June 2023 to assess the potential move.

An arena would create approximately 30,000 permanent Virginia jobs and was “projected to generate roughly 2.5 times the economic output of what would otherwise be built based on current development plans,” according to the study.

Youngkin met with the Major Employment and Investments Project Approval Commission, a group of appointed state legislators who oversee large economic projects, two days before the deal was made public, according to Cardinal News. However, several of those legislators were not returning to office.

Sen. Louise Lucas, D-Portsmouth, who holds two lead Senate positions as president pro tempore and chair of the finance committee, was not at the meeting, according to Cardinal News. Lucas now serves on the MEI Project Approval Commission, effective in January.

Lucas became one of the arena’s biggest critics even before the plan was officially announced, stating on X: “While some people want sports stadiums … I want tolls to disappear from Hampton Roads and I want recreational sale of marijuana.”

House and Senate bills were introduced to create and allow the Virginia Sports and Entertainment Authority to fund and construct the Potomac Yard project.

The House bill passed with some bipartisan support. Both bills were assigned to the Senate finance committee that Lucas chairs and neither bill received a hearing. Project funding was not included in the biennial budget passed by the legislature.

Virginians deserved better and the proposal would have driven investments along with “tens of thousands” of new jobs and revenue, Youngkin stated.

Neither Monumental Sports nor key supporters of the arena would go on the record about the proposal benefits. Senate Majority Leader Scott Surovell, D-Fairfax, who carried the Senate arena bill, did not respond to email requests.

What people say went wrong

The deal immediately received backlash from grassroots organizations, as well as fans.

Dennis Coates is an economics professor at the University of Maryland, Baltimore County, who has researched the growth effect of sports franchises and public stadiums and arenas. Monumental Sports probably used the deal strategically, he said.

“I think it was always the bargaining chip,” Coates said. “If you want to extract concessions from your current landlord … you wave around all of these potential concessions you are going to get someplace else.”

It hurt the proposal that the team never shared a proprietary report which allegedly showed the benefits of the deal, Coates said. And it is getting “difficult to swallow” the shorter timeline that teams want to stay in a location, he said.

“Why should I believe that you’re going to stay here for 40 years when you’re leaving the place that you’ve only been in for 20 years?” Coates said.

Grassroots organizations lobbied effectively against the move and were backed by a powerful senator, Coates said.

“So in a way you had kind of a perfect storm of somebody who was powerful and a lot of people who were angry all coming together to say: ‘No, we’re not going to do this,’” Coates said.

Monumental Sports would have likely negotiated with other counties to pressure competitive bids, according to Coates.

“The District of Columbia upped their bid and the team took it,” Coates said.

The district officials eventually added another $15 million from Mayor Bowser’s original offer, along with other perks.

If the team had not taken it, they eventually would have had to ask for financial help in the near future, Coates said.

“That’s just the way this game has played out case after case, city after city,” Coates said. “That’s what happens if you sort of threaten to move — if they don’t give you what you want you move to someplace that will.”

Grassroots and advocacy

Ronald Moten is the co-founder and executive director of Don’t Mute D.C., which strives to preserve the district’s music, culture and history. In addition to traffic concerns, the move would impact the already struggling Chinatown community, Moten said.

The plan was selfish and would have many residual effects that were overlooked, according to Moten. Fans who have supported the teams for over 20 years felt “disrespected” by Leonsis.

“He’s not listening to the people … when you have so much money you become a narcissist and nobody can tell you nothing,” Moten said.

John Breyault is vice president of public policy, telecommunications and fraud at the National Consumers League.

“We’ve become really familiar with how professional sports work and how teams and billionaire sports team owners get money out of states and localities to build playgrounds for themselves and millionaire athletes and their millionaire friends,” Breyault said.

The arena funding would take away from priorities that really help people, including affordable housing, health care or mental health services, roads and infrastructure, according to Breyault.

Breyault referenced a study done by J.C. Bradbury at Kennesaw State University examined the impact publicly funded arenas in the U.S. have on communities, dating back to 1909.

“Whether they achieve the economic development and taxpayer revenue goals their backers claim they will, and what they found is that they never do,” Breyault said.

Capital News Service is a program of Virginia Commonwealth University's Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia. VCU InSight is the capstone broadcast news program.

Capital News Service is a program of Virginia Commonwealth University's Robertson School of Media and Culture.
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