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The Washington Wizards and Washington Capitals could be headed to Virginia.
State officials and Monumental Sports and Entertainment, which owns the basketball and hockey franchises, on Wednesday unveiled plans to create a $2 billion entertainment district in Alexandria that would include a sports arena, a practice facility for the Wizards, a performing arts venue and an expanded esports facility, coupled with new retail, residential, restaurants, hotels, conference facilities and community gathering spaces.
This story was reported and written by our media partner The Virginia Mercury
Located along the Potomac River in the Potomac Yards neighborhood, the proposed district would be adjacent to the Virginia Tech Innovation Campus and near Amazon HQ2, with access to air, bus and rail services.
In a release Wednesday, Virginia Gov. Glenn Youngkin called the project “the most visionary sports and entertainment development in the world, bringing together entertainment, sports, and technology in the most advanced innovation corridor in the United States: a once-in-a-generation and historic development for the commonwealth, sports fans, and all Virginians.”
The win for the Old Dominion comes at the expense of Washington D.C., which this week made a last-minute pitch to keep the teams in the city, offering $500 million in financing for an $800 million renovation of the arena the teams have been using in downtown D.C.
Under the proposed deal with Virginia, which was approved by the state’s Major Economic Incentives Commission earlier this week, the state would set up a new authority that would issue $2 billion in bonds for the district. Monumental would have a 40-year lease of the site and would repay the bonds annually through rent payments, arena parking revenues, district naming rights and incremental taxes generated by the development. The company would also invest $403 million into the proposed project, and Alexandria would contribute $56 million toward the construction of the performing arts venue and $50 million for an underground parking facility.
The governor’s office has said the state will make no upfront investment in the project and local residents will not be subject to any tax increases for it. The authority will own the land and buildings built under the proposal.
At a Wednesday morning announcement at Potomac Yard, Youngkin said the project “would first and foremost be good for the Virginia taxpayer.”
“That’s exactly what this project represents,” he said. “No upfront investments, harnessing the financial horsepower of the future incremental taxes and other revenues with an estimated $12 billion of economic contribution to Virginia and the city of Alexandria over the coming decades.”
Ted Leonsis, CEO of Monumental Sports and Entertainment, called Virginia a “fantastic state,” noting, “You’re also the only state, the most successful state without professional sports teams.”
“So I think this is a big, big moment that is kind of a capstone for that journey of making Virginia a major driver and a major part of this whole new economy where sports and technology are the big drivers of what a community stands for,” he said.
The project, which is expected to open in late 2028, will require backing from the General Assembly to come to fruition. Legislators will have to approve the creation of the new Virginia Sports and Entertainment Authority that will be the issuer of the bonds, a proposal expected to come before the legislature in the upcoming session that starts in January.
While the Major Economic Incentives Commission has already backed the idea, Virginia lawmakers have balked previously at getting involved in sports team developments. During the last session, the General Assembly abandoned legislation to bring the Washington Commanders to Virginia following concerns over the use of tax revenue and team culture. The Commanders are now under new ownership.
A handful of protesters turned out Wednesday, yelling over officials’ remarks and urging policymakers to focus on other issues affecting Virginians, such as potential cuts for Metro and a lack of housing.
Patrick Hedger, a Virginia resident and executive director of the nonprofit Taxpayers Protection Alliance, said he believes stadium subsidies are a poor use of public funding and Monumental is “playing off of a bunch of really closely located jurisdictions” to finance an arena.
Hedger said that he’s concerned the governor is “saddling taxpayers with this new debt and this new burden.”
U.S. Sen. Mark Warner, D-Virginia, said local, state and federal leaders will need to build on the investment by improving existing transit and engaging with the community.
“Our job is to make sure that the neighborhoods adjacent here in Potomac Yard, across Route 1 in Del Ray and other surrounding neighborhoods, feel engaged and know that their quality of life will be protected,” Warner said. “And at the end of the day, their quality of life will be improved from this investment.”
Del. Charniele Herring, D-Alexandria, said she’s encouraged that “there is a dedication to do the work to ensure that is not disproportionately impacting our most vulnerable in our community.”
“I know, like many of you, [I] have been looking for a bipartisan agreement that will meet our community’s values and ultimately benefit the local community, Alexandria and commonwealth,” she said. “I look forward to turning this framework into an incredible project beginning as a venue for the entire community.”
