D.C. Mayor Muriel E. Bowser and Ted Leonsis, owner of the Wizards and Capitals, signed a deal Wednesday that — if approved by the D.C. Council — would keep the teams in downtown D.C. until 2050, abruptly ending the owner’s planned move to Virginia.
The agreement includes other provisions that address some of Leonsis’s concerns about the state of downtown, which has struggled to recover from the pandemic, and allow his company, Monumental Sports & Entertainment, to expand in the city.
Among the provisions to which the two sides have tentatively agreed, D.C. would allow Leonsis to take over the Gallery Place retail center, assume management of the Mystics home arena in Southeast D.C., utilize parking at some District-owned buildings for Monumental employees, keep a minimum number of police officers downtown and plan for a new future downtown practice facility for the Wizards.
The agreement marks a sharp change in plans for Leonsis, who three months ago joined Virginia Gov. Glenn Youngkin (R) to announce a handshake agreement to build a new arena in the Potomac Yard area of Alexandria as part of a $2.2 billion mixed-use development. Although the Virginia House of Delegates gave the idea initial approval, the proposal never passed the Senate, thanks chiefly to a powerful Democratic senator who opposed it, and was left out of the state’s budget.
In a joint interview with The Washington Post on Wednesday, the mayor and owner said they had stayed in regular touch since Leonsis’s announcement in Virginia.
“We appreciated our discussions about how we could grow together,” Bowser said. She said after Leonsis’s announcement that he planned to leave “it became very clear about how our community feels about our teams.”
Leonsis said a number of moves made by Bowser and the council, including the formation of a plan to revive downtown and the council’s passage of a new crime bill, gave him greater confidence that he could comfortably grow and expand his business in the District.
The billionaire owner credited the mayor with continuing to make progress on improving the business climate downtown. He said after one of his meetings with her, “all of a sudden I really felt like we were in this together and that D.C. — it’s where I wanted to be.”
A deal in D.C. will not be complete without approval by the 13-member D.C. Council. But in December, members of the council unanimously signed on to legislation offering Leonsis $500 million in upgrades over three years, closely mirroring the terms Leonsis and Bower described Wednesday. And Bowser and Leonsis were flanked by numerous members of the council at a news conference Wednesday evening announcing the deal.
Council Chairman Phil Mendelson (D) said he anticipated the $515 million legislation will easily pass the council on an emergency basis on Tuesday. Though the city is in the middle of a difficult budget year, he stressed that the money is coming out of the capital budget, not the operating budget, which is where the city is strapped.
The two sides will also have to come to terms on a more detailed development agreement outlining each side’s responsibilities for making sure the renovation project is completed.
Leonsis emailed Monumental employees and partners Wednesday afternoon explaining additional details of the agreement, among them that there would be no streatery along Sixth Street — which takes up a lane of car traffic — F Street south of the arena could close to cars for up to two hours before games, there would be a new ride-share zone for fans and there would be better management around the arena.
The Wizards now practice at the arena in Southeast where the Mystics play. In his email Leonsis mentioned Gallery Place, U Street and the RFK Stadium site as locations under consideration for the possible new practice facility.
Leonsis said in the interview that since he announced plans to move to Virginia, Bowser and the council had focused more keenly on the issues he cared about. And Bowser constantly kept in touch.
The relationship between Bowser and Leonsis has not always been an easy one. Leonsis has long lamented crime and other nuisances outside the arena, as well as the conditions within, suggesting the District had not invested enough in needed renovations. Last year, Leonsis asked for $600 million in public funding for major renovations at Capital One. And Bowser has also been pursuing a deal to build a new stadium for the Washington Commanders, who now play in Landover, sometimes leading Leonsis to question whether his teams were being prioritized by the District.
Meanwhile, Bowser had alluded to the possibility of suing Monumental over its effort to leave the city before its lease ended in 2047, and D.C. Attorney General Brian Schwalb (D) in a letter last week laid out the city’s position that relocating the teams before that would amount to a legal breach — a position with which Monumental had disagreed.
He said he told the Virginia governor earlier Wednesday about his plans to stay in D.C. He declined to go into detail about what went wrong with his aborted effort to build a Virginia arena but said: “My experience was that I had a better experience on the business side in D.C. than I just did in Virginia which was really, really surprising and eye-opening.”
Bowser said she shared many of Leonsis’s priorities for growing downtown and that there had always been an understanding between the two of them that District and the company had enjoyed a mutually beneficial relationship.
“I have to say in this process, what’s clear is that Ted is an active owner, he cares about the arena, he cares about the surrounding community,” she said.
Youngkin released a written statement Wednesday afternoon in which he hailed the lost promise of a “one-of-a-kind project” that he said would have brought thousands of jobs and billions of dollars in revenue to the state.
“Virginians deserve better,” he said. Enormous economic potential “just went up in smoke. … This should have been our deal and our opportunity, 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” the deal.
Youngkin thanked Leonsis, Monumental, the city of Alexandria and developer JBG Smith, all of whom he said had shown “professionalism, belief in Virginia and fortitude. Congratulations to Monumental for striking a great deal, I’m sorry you won’t be in Virginia.”
JBG Smith chief executive Matt Kelly said in a statement Wednesday that the deal was “derailed largely due to partisan politics.”
“To say we are disappointed is an understatement,” Kelly wrote.
Shortly before the announcement Wednesday, the city of Alexandria said it stopped negotiations around the proposal to bring the Washington Wizards and Capitals to a new arena at Potomac Yard.
“We are disappointed that this proposal was not able to be thoughtfully considered on its merits by legislators, stakeholders and ultimately now by our community,” Alexandria Mayor Justin M. Wilson (D) said in a video statement released Wednesday afternoon. “Instead we got caught up in partisan warfare in Richmond.”
He said the city would turn its focus to other efforts to bring “quality commercial opportunities” to the city. Alexandria is facing stagnant revenue growth that he said was straining to meet the rising costs of funding city services, Wilson added.
The Potomac Yard plan surprised fans and prompted an outcry from D.C. residents and business owners worried about the potential loss of an economic engine that brings nearly 2 million visitors per year to Chinatown, an area that has lately struggled with empty storefronts, office vacancies and crime.
While Youngkin quickly struck a rapport with Leonsis as the two put a deal together over the summer and fall of 2023, he never managed to build a solid base of support in the General Assembly — particularly among Democrats who rose to power after claiming majorities in both House of Delegates and Senate in last fall’s elections.
Shortly before announcing the arena plan in December, Youngkin presented it to a Major Employment and Investment commission made up of leading lawmakers. Charged with reviewing major economic development initiatives that might require state incentives, the bipartisan group voted unanimously for Youngkin to pursue the deal with Monumental.
But the commission was still made up of old General Assembly leadership, and some of the newly ascendant figures were not there — most notably the incoming Senate Finance and Appropriations chairwoman L. Louise Lucas (D-Portsmouth).
Lucas would prove to be a formidable foe of the project, saying it was a giveaway to a billionaire that put state finances at risk. She never docketed a Senate bill to set up the sports and entertainment authority necessary to oversee the arena project, and she stripped arena language from the state budget.
When Leonsis belatedly met with Lucas in early March, they hit it off. But by then it was too late to save a project that never claimed enough support among other lawmakers — of either party — to overcome Lucas’s determined opposition.
“As Monumental announces today they are staying in Washington DC we are celebrating in Virginia that we avoided the Monumental Disaster! Thank you to everyone who stood with us in this fight!” Lucas tweeted Wednesday afternoon. The plan also suffered from opposition in Alexandria, where neighbors of the proposed arena expressed worries about the impacts on traffic, parking and transportation. And labor unions came out against the plan, dealing it another blow.
The General Assembly adjourned March 9 having snubbed the arena, and Democratic leaders rebuffed Youngkin’s attempts to revive it ahead of a routine April 17 legislative session for considering vetoes and amendments proposed by the governor.
“After a lot of conversations about this thing over long period time and a lot of hype … I think it probably worked out for the best at the end of the day,” Virginia House Speaker Don L. Scott Jr. (D-Portsmouth) said in an interview.
Scott said lawmakers tried to do their “due diligence” on the deal, looking into whether the finances would be a good deal for the state. Scott had expressed interest in the project and voted for the initial bill that moved it forward. But he faulted Youngkin for not keeping legislators of both parties in the loop as the deal took shape.
“It was probably not a good idea to give legislators a take it or leave it, already-done deal that they can’t kick the tires on and look under the hood on before voting,” Scott said. “The deal was too big to be done in the shadows.”
Schneider reported from Richmond. Laura Vozzella in Richmond contributed to this report.
