Talks on luring NHL’s Capitals and NBA’s Wizards to Virginia are over, city of Alexandria

WASHINGTON (AP) — Negotiations aimed at luring the NHL’s Washington Capitals and the NBA’s Washington Wizards to northern Virginia have “ended,” and the proposal to create a development district with a new arena for the teams “will not move forward,” the city of Alexandria said Wednesday.

The move is a blow for 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. He added: “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.”

Monumental Sports and Entertainment, the teams’ parent company, and the District of Columbia are close to signing a letter of intent for a $515 million renovation of Capital One Arena, their current home, that will keep the Capitals and Wizards in the city for the long term, according to a letter from CEO Ted Leonsis to employees that was obtained by The Associated Press on Wednesday.

The $515 million project would 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.

Daniel Gleick, a spokesman for D.C. Mayor Muriel Bowser, said he had no information he could share “at this time.” A spokesperson for Monumental didn’t respond to repeated requests for comment.

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 city’s 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!”

Other Democratic leaders pushed back at Youngkin’s characterization.

“The General Assembly was never treated as an equal partner in this project,” Senate Majority Leader Scott Surovell said.

Alexandria Mayor Justin Wilson alluded to the partisan battle between Youngkin and the Assembly in a video statement announcing the city’s withdrawal from the relocation proposal.

“We are disappointed that this proposal was not able to be thoughtfully considered on its merits … and instead got caught up in partisan warfare in Richmond,” Wilson said, adding, “We have come to the conclusion that the General Assembly process is not going to produce a proposal that protects our financial responsibilities and respects our community’s values.”

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.