Dec 14, 2023 - News

How Virginia stole the Caps and Wizards from D.C.

Monumental Sports & Entertainment CEO Ted Leonsis (left), jokes with Gov. Glenn Youngkin during Wednesday's announcement. Photo: Win McNamee/Getty Images

Behind the scenes this year, Virginia Gov. Glenn Youngkin and Ted Leonsis, two friends who've run in Northern Virginia's elite business circles, quietly hammered out an audacious vision the duo first chewed over years ago — a giant entertainment and sports mecca.

Why it matters: The owner of the Wizards and Capitals kept the Virginia courtship top secret while he worked Mayor Muriel Bowser, seeking $600 million from D.C. to renovate Capital One Arena.

The intrigue: The dealmaking accelerated over the summer after local leaders were brought to the table, Alexandria City Mayor Justin Wilson and officials close to the deal, who asked for anonymity to speak candidly, told Axios.

  • Meanwhile, in early November, as revealed in the Washington Post, Leonsis said he wanted extensive upgrades to Capital One Arena.
  • But on the morning of Nov. 13, Leonsis and Youngkin — the billionaire and not-far-from-a-billionaire governor — met in a Falls Church office to put the "final touches" on the megaplan for a 70-acre sports district, according to a source with knowledge who wasn't authorized to speak publicly.
  • For weeks and into this past weekend, sources say, Youngkin lobbied key Democrats, including Sen. Mark Warner, who stood on stage Wednesday to boost the plan, and even a political nemesis in Alexandria, state Senator Adam Ebbin, who declined to join on stage.
  • The calls culminated in a closed-door vote on Monday when a committee of Virginia lawmakers voted unanimously to support the project — triggering an earthquake in D.C.

The big picture: It's one of the biggest economic development announcements in Virginia history, giving Youngkin a legacy-defining win after his disappointment in last month's legislative elections. And it's one of the biggest embarrassments in years for the D.C. government, which looks outfoxed.

  • Both the Wizards and Caps have rowdy, passionate fan bases that infuse Penn Quarter with vibrant, lucrative nightlife. Now, the party will be across the Potomac River.

Details: The arena at Potomac Yard would break ground in 2025 and open in late 2028, according to the plan.

  • The $2 billion investment would be funded through bonds that would be repaid through revenue generated by the venues and taxes. Monumental Sports & Entertainment, the teams' ownership group, would invest $403 million.

Flashback: The conventional wisdom in D.C. was that Leonsis would never really move to Virginia. That Leonsis was just using the threat to convince the city to pour hundreds of millions in taxpayer dollars toward renovating Capital One Arena.

  • "Oh, Ted's not going anywhere," Mayor Bowser once privately insisted last January, according to a person who spoke to her.

Yes, but: When Leonsis first toured the site at Potomac Yard, he was blown away.

  • Next to Metro. Across from Reagan National Airport. The sight of two rivers and monumental Washington.
  • Never mind the nightmare traffic scenarios. Never mind the angry homeowners screaming outside the gates of the announcement ceremony on Wednesday.
  • This is a "blank slate" to build something "we can't do anywhere else," Leonsis told the crowd gathered at the empty gravel site on the banks of the Potomac River.

Youngkin described the deal as "a very formal handshake and understanding," similar to Amazon HQ2, pending legislative approval in Richmond.

The other side: Even as he privately grumbled about crime surrounding his Chinatown arena, Bowser said she believed Leonsis was negotiating in good faith.

  • "I've known Ted a long time," Bowser told reporters Wednesday afternoon. (The two are said to have strained relations, the Post has previously reported.) "I don't know if he came to the table knowing that his preference was for a suburban … start-from-scratch" plan.
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