Monumental has not specifically stated whether it will move its professional team to Virginia. If the deal goes ahead, the company would commit hundreds of millions of dollars of its own funds to the project, according to two people briefed on the matter.
If approved, the deal would be a major economic development victory for Virginia Gov. Glenn Youngkin, a Republican whose victory was tarnished by his party’s loss in last month’s state election. ing.that It could also be a step for Monumental owner Ted Leonsis to take the company public, a move he openly considered in an interview with Bloomberg over the summer.
And while the plan would accelerate development in parts of Alexandria newly accessible by subway, it could be a devastating blow to struggling downtown Washington, D.C. be. District officials are in talks with Monumental about renovating the home of the Capitals and Wizards. Capital One Arena is striving to revitalize the surrounding area.
Built in 1997, this arena is one of the oldest facilities in the NHL and NBA. Monumental is asking the district for $600 million in public funds for major renovations, but D.C. is also facing requests from professional sports owners and the impending dispute over where the next Commanders Stadium will be built. They are grappling with onerous budget constraints, including competitive competition.
“Monumental Sports & Entertainment is one of the world’s most valuable regional sports and entertainment companies, delivering the best fan experience, winning championships, giving back to our communities, and continuing to reinvest in our fans and communities. We are committed to becoming the best we can be,” a Monumental spokesperson wrote in a statement. “Our commitment to the DMV is unwavering and we look forward to sharing our future investment plans.”
A spokesperson for Bowser released a statement from the mayor’s office saying, “Mayor Bowser and Chairman Mendelsohn have worked closely and in unison to present a strong proposal to Monumental Sports. After several months of negotiations,… , we are determined to see this through.” It’s an important part of DC’s comeback.”
Representatives from the Virginia Economic Development Partnership and Mr. Youngkin’s office did not immediately respond to requests for comment Monday. A spokeswoman for D.C. Mayor Muriel E. Bowser (D) declined to comment, as did a spokesperson for the Alexandria Economic Development Partnership.
It’s unclear when a deal will be announced if he gets the green light to sign with Virginia. The state’s Major Economic Investment (MEI) Project Approval Committee, made up of more than a dozen state lawmakers, is scheduled to consider the proposal at a meeting Monday afternoon, according to three people familiar with the plan. Because the commission is working on economic development agreements, its proceedings are closed to the public under an exemption in state law. The committee could vote on Monday or postpone the vote for a week.
Additional approvals from the General Assembly and Alexandria City Council will likely be needed to fully move forward with the plan.
The person who received the explanation said Basketball and hockey facilities will be part of the larger complex, which will also include a “huge” underground parking garage and a separate small concert venue. The official described the artist’s rendering as a “small mini-city development” and said it would be built on land owned by real estate developer JBG Smith. A JBG Smith spokesperson declined to comment Monday.
Virginia’s stadium authority would borrow money from Wall Street to pay for the project and then pay the money back later. The creation of a stadium authority would allow developers to use state and local bond interest rates far below market rates to finance construction.
The state Legislature would have to vote to create a stadium authority, which would issue bonds and collect tax revenue to pay for them. Proceeds from ticket sales will be used to repay the bonds. Such an arrangement would likely mean the cost to taxpayers would not be fully clear until the stadium authority decides what interest rate it can attach to the bonds.
Capital One Arena could continue to host concerts and college basketball games if the deal between Monumental and Virginia moves forward. As Leonsis’ business has “outgrown” the arena, it has expanded significantly into the adjacent Gallery Place, where the company plans to open a Monumental Sports Network television studio in early 2024.
Leonsis has been complaining for years about having a mortgage. He estimated in 2016 that the unfavorable terms at Capital One Arena were costing him $36 million a year. He called it “the worst construction contract in professional sports” and suggested he might leave the city after paying off his mortgage.
Two members of the D.C. Council, Chairman Phil Mendelsohn (D) and Charles Allen (D-6th District), have expressed interest in Monumental as opposed to bringing the Washington Commanders to the RFK Stadium site. Supports maintenance. That’s because arenas host far more events than NFL stadiums, and you can even drive around. Increased economic activity downtown.
Mr. Leonsis had complained in recent years about a lack of investment in the area around the arena and the city’s buildings as his relationship with Mr. Bowser deteriorated. He was particularly bothered by street performers playing loud music outside his office.
A move to the Virginia site could give Monumental more opportunities for non-sports revenue than is available in the district. Franchise owners in professional sports are eyeing the Atlanta Braves’ move to the suburbs of Cobb County, Georgia, with the team developing an entertainment district around its new stadium, making the site a destination and a mixed-use development. He turned the whole thing into a place to make money.
Monumental plans to lease the Alexandria site for more than 30 years, according to two people familiar with discussions about the project. Leonsis’ team could leave DC as early as 2027. The arena has a land lease, meaning Monumental owns the arena and the city owns the land underneath.
In 2007, in exchange for the city’s $50 million investment, then-arena owner Abe Pollin exercised two 10-year options to extend the lease from its original end date of 2027 to 2047. . However, if the lease deposit is paid in full—and Monumental is permitted to pay the remaining principal in one lump sum—the lease extension is void and the termination date reverts to 2027. become. Earlier this year, the remaining principal amount was $35 million.
Virginia is the largest state in the nation without a major league sports franchise, a fact that has long been lamented by politicians and sports fans alike who have sought to attract a team. Virginia has long been active in providing large financial packages to sports facilities, but venues such as Nationals Park, Congress Heights Entertainment and Sports Arena, and D.C. United’s Audi Field lost to
A plan to bring the commanders to a new stadium and entertainment complex in Virginia, which gained support from Youngkin and leaders of both parties in the General Assembly early last year, initially said the project would generate about $1 billion in state tax revenue. was prepared to give up. But the plan fell through amid concerns about cost, traffic impacts and the scandals surrounding then-team owner Daniel Snyder.
A deal with Monumental likely helps Yonkin recover from the loss he suffered in last month’s general election, potentially crushing his conservative policies and prospects for a possible last-minute 2024 presidential bid. There is. With two years left in his term and a deep blue state Legislature on his shoulders, he will need to focus on broadly popular economic development projects and other bipartisan priorities to win any legislative victories.
This is not the first time Virginia officials have tried to bring a professional sports stadium to Potomac Yard. Potomac Yard, the former railroad center of Alexandria, has been a prime target for redevelopment for decades. In the 1990s, plans to build a soccer stadium failed amid fierce local opposition, and a building containing a mix of apartments and large stores was constructed within sight of the Washington Monument.
The construction of Amazon’s second headquarters in nearby Arlington County and the new Potomac Yard subway station, which serves the Blue and Yellow Lines, have accelerated efforts to further develop the Alexandria area. Local officials have promoted the area, where Virginia Tech is building a graduate engineering campus, as part of a larger technology district they call “National Landing.”
JBG Smith is also working on a $1 billion “innovation campus” that was a key part of its package to acquire Amazon, with the first of three buildings to open next fall. It is planned. The company has frozen some plans to build residential buildings on the remainder of the former movie theater site.
(Amazon founder Jeff Bezos owns the Washington Post, whose interim CEO Patti Stonesifer is a member of Amazon’s board of directors.)
It’s unclear exactly where the arena will be located at Potomac Yard. Developers said in 2019 that they intended to build a strip mall in part of the area just west of the new subway station and replace it with 13 new mixed-use buildings, separated by a street grid. Hotels — but there don’t seem to be any concrete plans yet.
Alexandria lawmakers voted in 2010 to approve a blueprint for the north end of Potomac Yard. The blueprint envisions dividing the district into a grid of small blocks, including a mixed-use “entertainment district” that would draw people to the area near the subway. night.
Any effort to install a new sports arena at the Potomac Yard is likely to draw fierce opposition from some homeowners in nearby low-density neighborhoods like Del Rey. Del Rey is a former bedroom community for railroad yard workers and is now well known as an attractive neighborhood filled with small, independent businesses. .
Some Delray residents, whose quaint bungalows now sell for low six figures, have vocally opposed city council members’ votes in recent years to push for more development in Alexandria. This monumental project is almost certain to divide residents between those who see it as: It’s a threat to their city’s small-town feel, and it’s also a threat to those who support additional amenities and revitalizing the city’s ailing finances.
Lawmakers’ only concern at this point is transportation and access along Route 1, two people said. The General Assembly must approve funding for traffic calming measures and other road improvements.
State officials are considering a plan to lower a portion of Route 1 between Potomac Yard and downtown Washington, D.C., from an elevated freeway to a flat “urban boulevard,” and a new arena would not increase traffic in the area. Almost certainly. We are already experiencing heavy traffic jams.
Vosella and Schneider reported from Richmond. Michael Brice-Saddler, Meagan Flynn, Barry Svrluga and Jonathan O’Connell contributed to this report.
This article has been updated with a statement from the office of Washington, DC Mayor Muriel E. Bowser. The story is evolving and will continue to be updated.