Capitals staying in Washington after Virginia arena deal fails

The NBA’s Washington Wizards and NHL’s Washington Capitals are staying in the District of Columbia for the long term after a plan to lure the teams to Virginia imploded and ownership and the city reached an agreement on a $515 million, publicly funded arena project.

Mayor Muriel Bowser and owner Ted Leonsis signed a letter of intent Wednesday for the deal, which keeps the teams in the District through 2050. They announced the development at a joint news conference at Capital One Arena minutes later.

“It’s a great day, and I’m really relieved,” Leonsis said.

The project is set to include 200,000 square feet (18,580 square metres) of expansion of the arena complex into the nearby Gallery Place space, the creation of an entertainment district in the city’s surrounding Chinatown neighbourhood and safety and transportation upgrades.

“We are the current home and the future home of the Washington Capitals and Washington Wizards,” Bowser said. “As Ted likes to say, we’re going to be together for a long time.”

The Council of the District of Columbia will take up the deal next week and is expected to pass it, Chairman Phil Mendelson said at the news conference.

The agreement between Monumental Sports & Entertainment and the city came as officials in Alexandria, just across the Potomac in Virginia, said talks for a new arena that would have moved the teams there had ended.

Leonsis acknowledged Virginia had land as an advantage D.C. didn’t.

“You’re in this arms race to build bigger and better and higher quality and we’ve been running out of space,” Leonsis said, referencing the new entertainment community the agreement envisions that is not nearly as big as the 12 acres [4.9 hectares] that were dedicated to the arena in Virginia. “But it’s enough.”

Leonsis, an ultrawealthy entrepreneur, said he generally wanted to avoid discussing Virginia but did throw a few jabs at the state, where political divisions between Republican Gov. Glenn Youngkin and Democrats who control the General Assembly contributed to the plan’s demise.

The development is a blow to Youngkin, who announced months ago with fanfare the outlines of the Alexandria proposal he’s called a “once-in-alifetime” opportunity.

In a statement Wednesday, the governor expressed disappointment and frustration over the death of a plan he said would have created $12 billion in economic investment, laying blame with Democrats.

“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, he said.

The Virginia plan called for the creation of a $2 billion development district in the Potomac Yard section of Alexandria, with not only a new arena but also a practice facility and corporate headquarters for Monumental, plus a separate performing arts venue.