Wizards, Caps to stay in D.C. after Alexandria kills proposed Potomac Yard arena

Washington Wizards and Capitals owner Ted Leonsis, who confirmed Wednesday his teams will stay in the District through 2050, praised the $515 million neighborhood redevelopment package put together by Mayor Muriel Bowser and anti-crime legislation recently approved by the D.C. Council.

Mr. Leonsis, head of the teams’ parent company Monumental Sports and Entertainment, said at an evening press conference alongside the mayor that the deal would include 200,000 square feet of expansion of the existing Capital One 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.

The deal was announced just hours after Alexandria officially pulled the plug on negotiations for a ritzy new basketball and ice hockey palace at Potomac Yard.

The deal will be put before the D.C. Council on Tuesday, and Council Chairman Phil Mendelson said he expects the proposal to pass without any problems.

Mr. Leonsis, who saw state lawmakers in Virginia rebuff plans to move the team to Alexandria and who had opened discussions with Maryland Gov. Wes Moore about moving there instead, sounded relieved on Wednesday night.

“It’s a great day … You never know how things are going to end,” Mr. Leonsis said. “What I was most interested in was how are we going to reinvent, reimagine, be in this together. The amount of work done since December is extraordinary.”

After Mr. Leonsis announced plans to move late last year, District officials passed a new crime bill and announced a $400 million plan to jump-start the downtown area that has suffered in recent years. 

“We came together as a city and said we are going to fight for our teams,” the mayor said. “We put together what we thought was the best offer. It’s an offer that’s not only good for the teams, it’s good for Washington, D.C., and the entire region.”

Before Wednesday’s press conference, Alexandria officials announced that their city’s proposed $2 billion arena project was dead.

“The City of Alexandria has ended negotiations related to the Potomac Yard Entertainment District opportunity and the proposal will not move forward,” Alexandria officials said in a statement.

Democrats in the Virginia General Assembly had put the proposal on life support by ignoring Gov. Glenn Youngkin’s funding requests after the Republican negotiated his own deal with Mr. Leonsis.

The governor responded to Wednesday’s developments by taking a jab at the Democrats in Richmond who torpedoed the Alexandria plan.

“Virginians deserve better. 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,” the governor said in a statement. “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.’ But no, personal and political agendas drove away a deal.”

The arena plan, which the governor and Mr. Leonsis announced with great fanfare in December, set off surprisingly robust blowback from legislators in Richmond and residents in Alexandria.

Supporters touted the economic benefit of moving two professional teams to the state, and opponents noted concerns about the use of public funding and the effects on traffic in Potomac Yard.

Plans for the arena called for $1.5 billion in funding from public bonds, with Mr. Leonsis’ Monumental Sports & Entertainment contributing $400 million to the project. Public funding was dependent on an agreement from state lawmakers to establish a stadium authority to issue the bonds and oversee the arena.

Mr. Youngkin touted the arena as a boon for Virginia’s economy. He has said the development would create 30,000 jobs and billions of dollars in tax revenue without any upfront cost to taxpayers.

“I’d like to thank Ted Leonsis and the Monumental team … and countless other partners for their professionalism, belief in Virginia and fortitude,” Mr. Youngkin said. “Congratulations to Monumental for striking a great deal, I’m sorry you won’t be in Virginia.”

State Sen. L. Louise Lucas, Portsmouth Democrat, said the governor’s proposal was overly dependent on public funds.

While the arena could have moved forward during budget negotiations, it was blocked by Ms. Lucas.

Virginia became a punchline at Wednesday’s joint press conference — Mr. Mendelson and Mr. Leonsis drew several laughs from the crowd when alluding to the failed Potomac Yard arena. 

“One day we’ll have a lot of fun … we’ll talk about Virginia, but D.C. is home,” Mr. Leonsis said. 

Ms. Bowser’s pitch to keep the teams in the District featured a personal touch that Virginia lacked, according to Mr. Leonsis.

After Virginia’s legislation failed, Maryland Gov. Moore met with Mr. Leonsis and discussed a potential deal to bring the teams to the Old Line State — but all roads led to D.C., Mr. Leonsis said Wednesday.

Ms. Bowser spent the last few months lobbying to keep the Wizards and Capitals in the District. Before Mr. Leonsis announced plans to move the team, D.C. officials said they would invest up to $500 million to renovate Capital One Arena, where the teams currently play.

For its part, Monumental is responsible in the agreement for adding another $300 million in investments in the existing facility.

Mr. Leonsis initially turned down the District’s offer and pursued the Potomac Yard proposal. Ms. Bowser responded by penning an article in The Washington Post in February.

“It’s only right that D.C.’s teams stay in D.C. Leonsis has previously acknowledged the huge responsibility that comes with owning a team,” the mayor wrote. “Now, I’m not a billionaire, but I do believe it’s possible to have enough money. A great legacy and reputation, however, are priceless.”

The friction between Monumental and the District escalated, as Mr. Leonsis doubled down on his attempt to move the teams to Virginia.

In a letter penned earlier this week, D.C. Attorney General Brian Schwalb threatened legal action if Monumental broke its lease at Capital One Arena. The original contract kept the franchises in the District until at least 2037. 

“As I made clear in my letter to Monumental, it is in the best interests of the District and Monumental to resolve differences through negotiation and legislation,” Schwalb said in a statement Wednesday. “I’m delighted for the District both as a lifelong DC sports fan and as the Attorney General.”

“We made a lot of mistakes,” Mr. Leonsis said. “But we manage to outcomes. And this outcome is definitely the right one.”

The mayor said she’ll let bygones be bygones now that the teams will stay in the District. 

“I will consider it water under the bridge. Lesson learned,” Ms. Bowser said. “Now, let’s win.”