Virginia's Republican Governor Glenn Youngkin just scored a goal against Muriel Bowser, the Democratic mayor of Washington DC. 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 bring the two teams from the District of Columbia to a new sports and entertainment complex in Northern Virginia .
With no city having more than half a million residents, Virginia is one of twenty states that does not have a professional team in the major leagues of American football (NFL), basketball (NBA), baseball (MLB), soccer (MLS) and ice cream 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 into Maryland.
Youngkin has found a great opportunity in this metropolitan area (about 700,000 residents in DC and more than six million including surrounding suburbs and residential areas) to bring two teams into his state at once with an approximately $2,000 million project that requires approval lure from the state parliament.
An illustration of the complex planned by Monumental Sports in Virginia that will house the NBA's Wizards and the NHL's Capitals.
The Wizards and Capitals now play right in the center of the city, in the Chinatown district. The venue is the Capital One Arena with a capacity for around 20,000 spectators, which will be converted into an economic engine for the region on match days and concerts. However, the infrastructure is a bit old and neglected. Mayor Muriel Bowser responded to plans by Monumental Sports & Entertainment, led by businessman Ted Leonsis, to bring the teams to Virginia with a counteroffer of $500 million in modernization investments. Too late to stop the competing project.
The new complex will be located in the area called Potomac Yard in the city of Alexandria, which, along with other adjacent areas, is being promoted as National Land. It is located 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 two teams' current headquarters.
The company has distributed spectacular illustrations showing what a project would look like that would include new facilities for the Wizards' training, an independent performing arts center, in addition to the multi-purpose pavilion that would serve as headquarters for the Wizards and the Capitals Media studio, new hotels, restaurants, a convention center, houses, commercial areas and parking lots. This new district would span more than 80 acres and be developed by JBG SMITH, which (along with the State of Virginia, the City of Alexandria and Monumental Sports) is part of the public-private partnership promoting the project.
According to Governor Youngkin, this $2 billion entertainment district will bring more than 650 jobs to the region and will be relocated from the headquarters of Monumental Sports & Entertainment (MSE) to Potomac Yard. Developers estimate that the stadium, the first phase and future phases of development will have a combined economic impact of $12 billion for Virginia and the city of Alexandria and create approximately 30,000 jobs in the coming decades. Pending 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, combining entertainment, sports and technology in the most advanced innovation corridor in the United States,” Youngkin said in unveiling the project. “It’s something 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, remains hopeful that teams will remain at the city's Capital One Arena due to the complex financing arrangement for the new project. She defends the advantages of a team from the capital over one from the suburbs and believes fans prefer that too. “National Landing Wizards doesn’t have the same ring to it,” he said Wednesday, poking fun at the new area’s name. MSE is poised to keep the Washington Mystics, the WNBA women's basketball league team, at Capital One Arena.
Interior of Capital One Arena in Washington. Andrew Harnik (AP)
Although it receives public support, Virginia expects that the investments will be repaid with the additional revenue from the project. The financing plan does not include any new taxes or increases in existing taxes. Virginia has managed to attract major companies such as Amazon, Boeing and Raytheon to this area on the outskirts of Washington (in Arlington and Alexandria).
The $2 billion investment will be funded by bonds from 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 additional taxes generated by the stadium and the first phase of development.
The City of Alexandria will also provide $56 million for the construction of the performing arts center in partnership with MSE and $50 million for the development of the underground parking garage. The land and buildings will be owned by the Virginia Sports and Entertainment Authority, which will enter into 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 funded by the bonds.
Monumental Sports & Entertainment was founded and led by Ted Leonsis, an American businessman, investor, filmmaker, author, philanthropist and former politician who was an executive at America Online. Prominent shareholders include Canadian billionaire Jeffrey Skoll, first president of eBay; Billionaire businesswoman and philanthropist Laurene Powell Jobs, widow of Steve Jobs; BET television co-founder Sheila Johnson, the first African-American woman to exceed $1 billion in wealth; and Mark Lerner, the owner of the Nationals, the baseball team in the American capital. Last June it was announced that a Qatari sovereign wealth fund was investing in the country's capital with a 5% stake.
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