The Republican governor of Virginia, Glenn Youngkin, has just scored a goal against Muriel Bowser, the Democratic mayor of Washington DC, the federal capital. Youngkin has reached an agreement in principle with Monumental Sports & Entertainment, the company that owns the Washington Wizards basketball team and the Washington Capitals ice hockey team, to take the two teams from the District of Columbia to a new sports and entertainment complex in northern Virginia.
With no city exceeding half a million inhabitants, Virginia is one of the twenty states that does not have any professional team in the major leagues of American football (NFL), basketball (NBA), baseball (MLB), soccer (MLS ) and ice hockey (NHL). On the other hand, some of the state's largest population centers, such as Arlington and Alexandria, are part of the Washington metropolitan area, which also extends to Maryland.
Youngkin has found in that metropolitan area (about 700,000 inhabitants in DC and more than six million adding the adjacent suburbs and residential areas) the great opportunity to attract two teams to his state in one go with a project of about 2,000 million dollars that needs approval from the state legislature.
The Wizards and Capitals now play right in the center of the city, in the Chinatown area. Its venue is the Capital One Arena, with capacity for about 20,000 spectators, converted into an economic engine for the area on match days and concerts. The infrastructure, however, is somewhat aged and neglected. Upon plans by Monumental Sports & Entertainment, led by businessman Ted Leonsis, to take the teams to Virginia, Mayor Muriel Bowser responded with a counteroffer of $500 million in investments to modernize it. Too late to stop the rival project.
The new complex will be in the area called Potomac Yard, in the city of Alexandria, which along with other bordering areas is promoted as National Land. It is on the banks of the Potomac River, next to the Virginia Tech Innovation Campus, on the outskirts of Washington, about 20 minutes by subway from the current headquarters of the two teams.
The company has distributed spectacular illustrations of what a project would look like that, in addition to the multipurpose pavilion that would serve as headquarters for the Wizards and the Capitals, would have new facilities for the Wizards' training sessions, an independent performing arts center, a media studio, new hotels, restaurants, a convention center, homes, commercial areas and parking lots. That new district would extend over more than 80 hectares and would be developed by JBG SMITH, which is part (along with the state of Virginia, the city of Alexandria and Monumental Sports) of the public-private partnership promoting the project.
According to Governor Youngkin that entertainment district of 2,000 million dollars of investment will bring more than 650 jobs relocated from the Monumental Sports & Entertainment (MSE) headquarters to Potomac Yard to the area. Developers estimate the stadium, phase one and future phases of development will generate a combined $12 billion in economic impact for Virginia and the city of Alexandria and create approximately 30,000 jobs over the coming decades. Subject to legislative approval by the Virginia General Assembly, construction will begin in 2025 and open in late 2028.
“This is the most visionary sports and entertainment development in the world, bringing together entertainment, sports and technology in the most advanced innovation corridor in the United States,” Youngkin declared when presenting the project. “It's monumental,” he said. “Virginia is, without a doubt, the best place to live, work, raise a family and, now, watch basketball or hockey,” he added.
Bowser, the mayor of Washington DC, still hopes that the teams will stay at the city's Capital One Arena due to the complex financing agreement for the new project. She defends the benefits of having a team from the capital versus one from the suburbs and believes that the fans also prefer it. ”National Landing Wizards doesn't have the same ring to it,” she said Wednesday, mocking the new area's name. MSE is willing to keep the Washington Mystics, the WNBA team, the women's basketball league, at the Capital One Arena.
Although it has public support, Virginia estimates that the investments will be repaid with the additional income generated by the project. The financing plan does not include new taxes or increases in existing ones. Virginia has managed to attract large companies such as Amazon, Boeing and Raytheon to that area on the outskirts of Washington (in Arlington and Alexandria).
The $2 billion investment will be financed by bonds issued by a new Virginia Sports and Entertainment Authority, as well as a $403 million investment from MSE. The bonds will be repaid through annual rent paid by MSE, stadium parking revenue, district naming rights and incremental taxes generated by the stadium and first phase development.
The city of Alexandria will also provide $56 million for the construction of the performing arts center in collaboration with MSE, and $50 million for the development of the underground parking lot. The land and buildings will be owned by the Virginia Sports and Entertainment Authority, which will sign a 40-year lease with the company.
The project includes $110 million in infrastructure for the area, including land development and improvements to roads, signals and intersections, which will be financed with the bonds.
The Monumental Sports & Entertainment firm was founded and is led by Ted Leonsis, an American businessman, investor, filmmaker, author, philanthropist and former politician who was a senior executive at America Online. Monumental shareholders include Canadian billionaire Jeffrey Skoll, first president of eBay; billionaire businesswoman and philanthropist Laurene Powell Jobs, widow of Steve Jobs; the co-founder of the BET television channel, Sheila Johnson, the first African-American whose fortune exceeded $1 billion; and Mark Lerner, the owner of the Nationals, the baseball team in the American capital. Last June, the entry of a Qatari sovereign fund into its capital with a 5% stake was revealed.
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