Virginia lawmaker pushes to keep funding for proposed relocation of Wizards, Capitals out of budget

A top Democratic Virginia lawmaker vowed Wednesday to keep language enabling a proposed relocation by the NBA’s Washington Wizards and NHL’s Washington Capitals to Alexandria out of the state budget lawmakers will take up later this week.

RICHMOND, Va. - A top Democratic Virginia lawmaker vowed Wednesday to keep language enabling a proposed relocation by the NBA’s Washington Wizards and NHL’s Washington Capitals to Alexandria out of the state budget lawmakers will take up later this week.

Sen. L. Louise Lucas, who chairs the Senate Finance and Appropriations Committee and is the top negotiator for her chamber in pending budget talks, reiterated her opposition to the project in an interview and said it could not make it into the spending plan without her support.

"Based on the information I have, it's just not a good deal for the Commonwealth," she said. "And I'm just not yielding."

The development does not necessarily mean the end of the road for Republican Gov. Glenn Youngkin's plan to lure the teams across the Potomac River with a $2 billion development district featuring a new arena. But barring some turnabout, it deals yet another blow for the proposal, one of the governor's top priorities.

The budget is the last remaining vehicle for the legislation underpinning the deal after Lucas effectively killed other standalone versions earlier this session by refusing to grant them a hearing.

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A rendering showing the newly proposed entertainment district in Alexandria's Potomac Yard that features an arena for both the Washington Capitals and Washington Wizards, and the global business headquarters for Monumental Sports & Entertainment (JBG SMITH)

Macaulay Porter, a spokeswoman for Youngkin, said the governor would have more to say on the subject Thursday morning.

Democratic Del. Luke Torian, Lucas’ counterpart in the House of Delegates, did not respond to a phone call or text message seeking comment.

Representatives for the teams' parent company, Monumental Sports & Entertainment, had no immediate comment.

Youngkin and entrepreneur Ted Leonsis, the CEO of Monumental, announced in December that they had reached an understanding on a deal to relocate the Capitals and Wizards.

The plan calls for the creation of a $2 billion development, partly financed by public money, in the Potomac Yard section of Alexandria that would include an arena, practice facility and corporate headquarters for Monumental, plus a separate performing arts venue, all just miles from Capital One Arena, where the teams currently play in Washington.

Monumental and the city of Alexandria would put in some upfront money under the terms of the deal, but about $1.5 billion would be financed through bonds issued by a governmental entity lawmakers were expected to set up this year.

The bonds were envisioned to be repaid through a mix of revenues from the project, including a ticket tax, parking fees, concession taxes, income taxes levied on athletes performing at the arena and naming rights from the district. Proponents say those sources will more than cover the debt, creating new revenues for the city and state in the project’s first year. But about a third of the financing, under the terms lawmakers were expected to vote on, would be backed by the "moral obligation" of the city and state governments, meaning taxpayers could be on the hook if the project revenues don’t come through as expected.

Lucas, the most senior member of the state Senate who took over this year as chair of the chamber’s budget committee, has been a vocal skeptic of the project and its financing mechanism the entire session. Lucas, also a sharp critic of the governor’s, told reporters nearly a month ago the project was dead, as far as she was concerned.

She tweeted a meme Thursday night that showed her next to a freshly dug grave, with a tombstone that reads, "Youngkin and Leonsis' $5 billion arena."

Arena critics have argued the estimated $2 billion price tag used by supporters doesn't provide a full accounting.

The budget bills are currently in the hands of a conference committee, a small bipartisan group of legislators that includes Torian and Lucas. The conferees have been meeting to work out a compromise after the two chambers passed competing versions of the spending plan.

Full details of the compromise plan will likely be rolled out around noon Thursday, Lucas said.

One of the House negotiators, Del. Mark Sickles, said the process had gone smoothly overall and lawmakers should still be able to adjourn Saturday, as scheduled.

"Chairman Torian showed great leadership in bringing this negotiation to a close on time. And we’re really happy that we were able to work closely with the Senate in almost all areas," he said, adding that House leaders had pushed to see if there was a place to find consensus between Democrats and Republicans on the arena.

Moving forward, if the arena is excluded from the budget, Youngkin has a few options.

Virginia governors have the ability to seek amendments to legislation, so he could attempt to put the arena language back in the budget. Lawmakers are scheduled to meet April 17 for a one-day session to consider Youngkin’s proposed amendments and any vetoes.

Youngkin could also call a special session where the process could start over with a new bill.

Lucas said she was "not likely" to change her mind moving forward.

Democrats, who control both General Assembly chambers, could lose Youngkin’s support for some of their own priorities if they kill the arena deal. Both sides have been unusually transparent about the fact that the arena was a bargaining chip in broader negotiations over other Democratic priorities ranging from marijuana retail sales to toll relief in Hampton Roads.

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