Alexandria blows final whistle on Virginia arena deal

ALEXANDRIA, Va. (CN) — The city of Alexandria cut ties Wednesday with developers seeking to build an arena that became a key negotiation point in Virginia's legislature.

"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 said in a statement. "We trusted this process and are disappointed in what occurred between the governor and General Assembly."

It only took 105 days for Washington Wizards and Capitals owner Ted Leonsis's December proposal to move his franchises to Virginia's affluent Washington suburbs to reach its demise. Alexandria's decision came after Democrats controlling the state's General Assembly left language providing funding for the arena and entertainment district out of the budget. 

Republican Governor Glenn Youngkin advocated strongly for the arena deal, which he said would have had a $12 billion economic impact on the state. He called the Democrats' omission a colossal mistake. 

"Virginians deserve better," the governor wrote in a press release. "This transformational project would have driven investment to every corner of the commonwealth."

The $2 billion public-private partnership between Virginia and Leonsis's group, Monumental Sports & Entertainment would have yielded a media studio for Monumental Sports Network, a practice facility for the Wizards, a performing arts venue and an expanded esports facility to Alexandria's Potomac Yard neighborhood, in addition to hotels, restaurants and the arena itself.

Democrats in Virginia's House of Delegates were willing to include the arena, but Senate President Pro Tempore Louise Lucas used her authority to prevent the Senate from voting on it. Youngkin remained hopeful he could convince Lucas to change course before the General Assembly reconvenes.

"As Monumental announces today they are staying in Washington DC we are celebrating in Virginia that we avoided the Monumental Disaster," Lucas tweeted.

The project expected to employ 30,000 people, a number Democrats were quick to point out primarily comprised construction jobs that lack comprehensive worker protection. 

The arena has served as a negotiation piece between Lucas and Youngkin. Democrats initially signaled they would be willing to explore the idea of a Virginia arena if Youngkin vowed to sign their progressive priorities into law. With the arena out of the budget, Youngkin has vetoed 80 bills from this year's session, with hundreds more to sift through before an April 8 deadline.  

"This should have been our deal and our opportunity," the governor's statement says. "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 with no upfront general fund money and no tax increases, that created tens of thousands of new jobs and billions in revenue for Virginia."

Lucas and other opponents of the arena cited the public cost, lack of labor protections and the risk of using bonds backed by state and city governments as reasons for opposing the stadium.

The state Senate president clarified that if Leonsis wanted the arena, the billionaire, a former senior executive for AOL, would need to use his estimated net worth of $3.1 billion to fund the project.

On March 23, District of Columbia Attorney General Brian Schwalb sent Monumental, a letter claiming the teams are contractually obligated to remain in Washington until 2047. He cited language in a 2007 agreement where the city provided $50 million through municipal bonds for renovations. The legislation required a 20-year extension to the arena's lease, initially slated to end in 2027. 

On Monday, the project's developers, JBG Smith, doubled down on their intent to create and preserve affordable housing in the area in a last-minute attempt to appease Democrats.

Still, the issue of public funding remained a non-starter. 

"My constituents were very clear about the fact that they did not want ANY of their hard-earned money funding billionaire projects," State Senator Stella Pekarsky tweeted. 

The project would have been adjacent to Virginia Tech's Innovation Campus, which will open this year and house the university's graduate computer science and computer engineering programs. The Wizards and Capitals' current home, Capital One Arena, is in the heart of downtown Washington, adjacent to the city's Chinatown neighborhood.

Youngkin has already vetoed bills that would ban assault weapons and is expected to thwart Democrats' effort to establish a retail cannabis market.

The General Assembly reconvenes April 15 to review the governor's vetoes and finalize the budget, but with Alexandria pulling out of negotiations, there will be no discussion of a new arena. 

It is unclear whether D.C. Mayor Muriel Bowser's offer to provide $500 million to Monumental for stadium renovations remains on the table with Virginia out of the picture. 

Alexandria wrote in its statement, "We are resolute in our commitment to ensure the city's future is determined by our community." It added, "We will continue to pursue economic opportunities that improve our quality of life and economic health."

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