Youngkin calls removing new Wizards, Capitals arena from Virginia budget ‘a colossal mistake’

RICHMOND, Va. (WRIC) – Republican Gov. Glenn Youngkin said Virginia Senate Democrats are making a “mistake” by leaving the deal to bring a new arena for the Washington Capitals and Wizards out of the state budget — which deals another blow to the project but doesn’t kill it.

Moving forward with the proposed $2 billion sports and entertainment district in Alexandria’s Potomac Yard section, which would include a new arena, a performing arts venue, retail shops, hotels and more, has been a top priority for Gov. Youngkin.

Youngkin, who announced the deal in December alongside Ted Leonsis, the CEO of Monumental Sports and Entertainment, which owns the teams, has touted the project as a “big win” that would create roughly 30,000 jobs and bring in $12 billion in economic impact.

After blocking two standalone bills to create an authority to issue bonds for the project, state Sen. L. Louise Lucas (D-Portsmouth), the top Virginia Senate budget negotiator, said she was keeping enabling language for the new arena out of the state’s proposed spending plan.

Youngkin voiced frustration with the decision during a press conference Thursday outside the Virginia State Capitol, telling reporters he fears it will damage Virginia’s business environment and will set back talks on other bipartisan legislative priorities.

“I believe that the Senate is about to make a colossal mistake,” Youngkin said Thursday after budget leaders said the plan was out of the budget.

Calling the deal “a truly unprecedented opportunity,” Youngkin said lawmakers have a chance to “fix this” by embracing its merits and reconsidering the decision. “I believe that our Senate and General Assembly have a chance. They have a chance to stand up and do what’s right,” he said.

Youngkin was adamant that the proposal would pass if it got a floor vote on the Senate, saying there is broad bipartisan support from leadership in both chambers of the Virginia General Assembly but that they are all running into a “single roadblock.”

When asked what the roadblock was, the governor said, “you know,” remarks seen as a reference to Sen. Lucas, a critic of Youngkin and the deal, who was watching Youngkin’s remarks from the Capitol portico.

Lucas has been critical of the project and has called for Youngkin to back bills to create a retail cannabis market and raise the minimum wage, two Democrat-led priorities Youngkin appears unlikely to sign.

Youngkin noted that House Speaker Don Scott (D-Portsmouth) “took the time to learn” about the project by getting outside advisors to review the details.

“On the other hand, the Senate refused to give the single largest economic development deal in Virginia’s history any serious, meaningful consideration, breaking their own longstanding tradition in the process and avoiding the broad bipartisan support in both houses,” Youngkin said. “This bill would pass.”

Lucas, the chair of the Senate Finance and Appropriations Committee, has voiced concerns with the framework of the deal’s financing, including fears that taxpayers could have to pay for the bonds if the project doesn’t hit certain economic projections.

She told reporters Thursday she doesn’t support the arena deal because she believes it would “further enrich billionaires.” “If they want this project, pay for it themselves and not put it on the backs of the commonwealth, taxpayers, plain and simple,” Lucas said.

“We are disappointed in the legislature’s decision not to fully consider a proposal that promises transformative benefits for Alexandria and the entire Commonwealth,” the Monumental Opportunity campaign said in a statement. “We remain hopeful that the merits of the proposal will eventually get a fair hearing so this important project can advance for our fans, players, employees and the residents of Virginia.”

The move to strip the language from the spending plan isn’t the end of the road for the Youngkin-backed proposal, but it limits his options. The governor could still propose an amendment to the budget or call a special session so lawmakers can consider another bill.

Under the tentative deal between the state and Leonsis, the Capitals and Wizards could start playing in a new sports arena in northern Virginia as soon as 2028.

The proposed deal, which also includes the city of Alexandria and real estate developer JBG Smith, calls for the development of a 9-million-square-foot district on a 70-acre site in Alexandria’s Potomac Yard neighborhood to start in 2025.

Under the proposed deal, the sports and entertainment state authority would own the land and enter a 40-year lease with Monumental Sports, which will pay $403 million upfront. Alexandria would pay $106 million for a performing arts venue in the proposed district.

Bonds issued by the authority will be repaid through the rent from Monumental, district naming rights, money from arena parking and incremental tax revenue from the arena and the first phase of the development, per Youngkin’s office.

Lucas has called for Youngkin to sign off on proposals to allow recreational cannabis sales and raise the minimum wage. She has also pushed for more funding for toll relief in Hampton Roads, a plan that Youngkin said Thursday he has been open to since the start of the 2024 session.

When asked Thursday about his views on the cannabis retail bill he’s reviewing that Lucas and other Democrats want him to sign, Youngkin reiterated that he’s been clear about his disinterest in the idea.

“At the end of the day here we are talking about an opportunity, truly an opportunity to bring 30,000 jobs, $12 billion of economic impact in the commonwealth of Virginia in the fastest growing, most dynamic area which is sports and entertainment. And, bluntly, you want to talk about putting a cannabis shop on every corner,” Youngkin said. “I don’t quite get it, honestly.”

The 2024 General Assembly session is slated to end on March 9, with lawmakers expected to return to Richmond for a one-day reconvened session on April 17 to take up Youngkin’s amendments and vetoes.