Crawling Back To The District

With his way blocked in Virginia, Ted Leonsis takes the only deal left on the table.

In December, regional sports mogul Ted Leonsis announced that he was moving the NBA’s Washington Wizards and the NHL’s Washington Capitals out of the Capital One Arena in Washington, DC to a new arena and mixed use development on the opposite shore of the Potomac River in Alexandria, Virginia. The announcement of the $2.2 billion deal was made in conjunction with Virginia Governor Glenn Youngkin, Alexandria Mayor Justin Wilson and Matt Kelly, CEO of JBG Smith, the property developer.

Yesterday, after three months of failing to broker agreement with a critical Virginia state senator on the legislation needed to enable the project, Leonsis was forced to crawl back to Washington, DC Mayor Muriel Bowser and take what is essentially the same deal he walked away from in December to keep his teams in the city.

So what happened, this after Leonsis and Gov. Youngkin had so confidently predicted that both major league teams would be playing in Virginia as soon as 2027? The one person who they could not convince was State Senator Louise Lucas (D-Portsmouth), who serves as both the President pro tempore of the Senate as well as the chair of the Committee on Finance and Appropriations.

Senator Lucas opposed the deal from the start, sounding a lot like a free market libertarian in saying that localities rarely seem to benefit when they help finance the construction of stadiums and arenas. Gov. Youngkin refused to negotiate with Senator Lucas, and the stadium deal was left out of the state’s 2025 budget.

With time running out, and Gov. Youngkin’s only option to veto the state budget and call a special legislative session to revive the proposal, Leonsis, who had been speaking with Mayor Bowser in the interim since the Virginia announcement, opted to pull the plug on the Virginia proposal and stay in the District.

In the agreement, the District committed to spending $515 million over three years to upgrade Capital One Arena in return for the teams staying at Capital One until 2050. There were some other sweeteners as detailed by the Washington Post:

The agreement includes other provisions that address some of Leonsis’s concerns about the state of downtown, which has struggled to recover from the pandemic, and allow his company, Monumental Sports & Entertainment, to expand in the city.

Among the provisions to which the two sides have tentatively agreed, D.C. would allow Leonsis to take over the Gallery Place retail center, assume management of the Mystics home arena in Southeast D.C., utilize parking at some District-owned buildings for Monumental employees, keep a minimum number of police officers downtown and plan for a new future downtown practice facility for the Wizards.

News trickled out slowly over the course of Wednesday, with Mayor Wilson out of the gate first, and all of the rest of the players following in his wake. With the Wizards playing at home, Leonsis, Mayor Bowser and DC City Council Chairman Phil Mendelson held a joint press conference at the Capital One Arena before tipoff.

While it was all smiles last night at Capital One, the last few months represents a humiliating reversal for Leonsis. It’s all in the numbers. Instead of benefitting from a $2.2 billion project in Virginia, he’ll have to settle for a $515 million renovation of his current home. Some have pointed out that he might have miscalculated the political situation in Virginia, and it’s easy to see why. After a bruising 2023 midterm election in Virginia where control of the House of Delegates and State Senate was at stake, Democrats were able to flip control of the House and retain control of the Senate. Now that Gov. Youngkin has endorsed President Trump’s return to the White House, it isn’t a surprise to see a state legislature controlled by Democrats reluctant to give a political win to a Republican governor who has ambitions beyond Richmond.

Not that many fans are going to cry for Leonsis. He’s still a billionaire, and will still get over half a billion dollars to improve the Capital One Arena. But after positioning himself as a different kind of owner, one that provided a stark contrast to former Washington Commanders owner Dan Snyder, the public persona of Leonsis has taken a hit, and I don’t doubt he’s feeling it right now. Earlier this week, he was glaringly absent at a ceremony celebrating Washington Capitals winger T.J. Oshie’s 1,000th NHL game, perhaps hoping to dodge the boos of the locals unhappy with him.

Then again, time heals all wounds. By the time his epitaph in DC is written, I don’t doubt that the last few months will represent nothing more than a footnote.