Plan to welcome two pro sports teams to Virginia is ‘bad,’ opposition group says
by Nathaniel Cline, Virginia Mercury
January 5, 2024
ALEXANDRIA — Virginia Gov. Glenn Youngkin and Ted Leonsis, owner of the Washington Wizards and Capitals, are facing strong opposition to their proposal to move the teams to Northern Virginia from residents on both sides of the Potomac River in the commonwealth and Washington D.C.
On Thursday morning, a group made up of some city of Alexandria residents and their D.C. cohorts gathered to express their concerns about the proposal’s perceived lack of transparency and the negative impacts on taxpayers and their quality of life.
“We feel very strongly that the arena should stay in D.C., the Capitals and Wizards should stay in D.C., and that the citizens of Alexandria, Virginia should not pay a billion dollars to a billionaire to finance his project,” said Andrew Macdonald, former vice mayor of the city of Alexandria, Thursday morning outside the Potomac Yard Metrorail station with a coalition of residents in opposition. “It’s a bad financial deal — bad for the city, bad for Virginia.”
Virginia lawmakers are expected to meet next Wednesday for the first time this year to discuss hundreds of pieces of proposed legislation, some of which have not been published yet, including a measure to create a new authority that would issue $2 billion in bonds to develop an entertainment district, to include a sports arena, a practice facility for the Wizards, a performing arts venue and an expanded esports facility.
On Dec. 13, Youngkin was joined by members of his administration and Monumental Sports and Entertainment to unveil plans to create a $2 billion entertainment district in Alexandria along the Potomac River.
The proposed district would be adjacent to the Virginia Tech Innovation Campus near Amazon HQ2 with access to air, bus and rail services.
City of Alexandria Mayor Justin Wilson, said in a recent newsletter to residents that the proposal will “catalyze thousands of units of new housing, including a large infusion of committed affordable units, the creation of a new school, parks, and more.”
Wilson added that the proposal will also provide almost a billion dollars, minimum, in permanent annual economic output for Alexandria.
If a deal were to be reached, the pro teams’ owner Monumental Sports and Entertainment would have a 40-year lease of the site and would repay the bonds annually through rent payments, arena parking revenues, district naming rights and incremental taxes generated by the development. The company would also invest $403 million into the proposed project, and Alexandria would contribute $56 million toward the construction of the performing arts venue and $50 million for an underground parking facility.
Wilson said Alexandria has increasingly relied on real estate tax revenue over the past couple of decades from either residential taxpayers or the owners of residential multi-family buildings.
Today, he said only 19% of the revenue collected is from the commercial tax base.
“That leaves us in a place where today residents of Alexandria are footing a larger percentage of the cost of their government than they ever have,” Wilson said. “The trajectory that we have seen over the past two decades shows no sign of abating in the future. The only true way to change this trajectory is through economic development.”
Macdonald, one of the coalition leaders of area residents, said it’s a “laudable” goal to grow the commercial tax base to reduce property taxes, but is uncertain the arena project will address the matter.
“If this is not a financially stable project, which we don’t think it is, you’re not going to be creating more commercial revenue in a way that’s going to benefit the town or reduce property taxes for homeowners,” Macdonald said.
Macdonald and others at Thursday’s press conference outside the Potomac Yard Metrorail station said they are also upset with the lack of transparency, as the governor’s administration and local leaders failed to consult residents. The proposal also doesn’t address impacts on the environment of the area, which residents said has a history of flooding. They also voiced transportation and traffic worries.
Residents on both sides of the Potomac River said the rail station may not be able to accommodate the influx of passengers.
For example, the Potomac Yard rail station has only two pairs of escalators and stairs for accessing the two rail lines, compared to the three rail lines at Gallery Place Chinatown underneath the teams’ current home at Capital Arena in Washington D.C.
At the same time, Metro is facing a $750 million shortfall with threats to jobs and services. The governor did not include any additional funding for Metro in his proposed budget announced last month.
The potential for increased traffic through Alexandria is also a concern.
“The mayor’s goal of forcing people into public transportation is very laudable and I think it’s something we wholeheartedly support, but the reality is, people are still going to drive,” said resident Shannon Curtis. “We can’t stop that and we have to deal with reality and the reality is, limited parking is going to force people into surrounding neighborhoods, it’s going to create a traffic boondoggle that is already a serious concern without the arena in this neighborhood.”
Residents also questioned how much Alexandria government and taxpayers will have to pay. Macdonald said he believes the coalition of residents will make a trip to Richmond to address lawmakers about the proposal.
“This [two] billion dollars is not coming out of the ether; it is affecting Virginia and what it can do in other ways,” Macdonald said. “You’re having to borrow this money … it affects your debt. So it does have an impact on other things.”
Lawmakers are not in total agreement with the proposed, seemingly lucrative proposal ahead of the General Assembly session, beginning on Jan. 10.
Recently elected to her second term, Del. Elizabeth Bennett-Parker, D-Alexandria, said in a statement she has not decided whether or not to support the proposal that rests inside her district and neighborhood, but is considering everyone’s views, concerns and questions about the proposal.
“I am concerned by the lack of detail from the governor about the transportation investments he plans to make and his lack of commitment to Metro funding,” said Bennett-Parker in a statement. “While there are many other factors to consider as well, the project absolutely would not work without a robust, functioning Metro system. I also want to be sure that care and attention would be paid to ensuring that our neighbors in Alexandria would not be displaced as a result of this development.”
She said the proposal could help diversify Alexandria’s tax revenue and help generate “much-needed” funds for affordable housing and education, and incorporate local businesses and workers.
“However, I will be weighing that against other considerations – including community input, state funding for Metro, and whether the project prioritizes and protects local workers and ensures fair wages,” Bennett-Parker said.
One of the Senate’s top influential Democrats, Sen. Louise Lucas, D-Portsmouth, told WAVY 10 following the governor’s budget presentation on Dec. 20 that ahead of the arena proposal she’s prioritizing Hampton Roads toll relief for drivers using the Downtown and Midtown tunnels between the cities of Portsmouth and Norfolk. She was recently named chair of Senate Finance & Appropriations.
According to the latest toll rates, two-axle vehicles pay between $6.77 to $7.57 depending on the time of day, and $2.26 to $3.06 with an E-Z Pass. The price increases for heavy vehicles.
Rates could escalate until 2026, according to 13 News Now.
Lucas posted on X, formerly known as Twitter: “Anyone who thinks I am going to approve an arena in Northern Virginia using state tax dollars before we deliver on toll relief and for public schools in Hampton Roads must think I have dumbass written on my forehead.”
Sen. Jennifer Boysko, D-Fairfax, and Karrie Delaney, D-Fairfax, chairs of the Senate and House Committees, said last month they are still considering the proposal, but understand that, if passed, it could alter transportation significantly.
“I think the impact that venue is going to have on our transportation system is clear, and I think that if that program is to move forward … there’s still a lot of questions and everyone wants to make sure that we really understand where the money’s coming from, where it’s going, how exactly it’s going to work and if it is going to have any impact on taxpayers,” Delaney said. “But if we get to a place where we’ve worked through that, and there is an appetite to consider or support that project, I think it’s going to be completely tied to the investment in Metro because its location is going to put an excessive strain on the Route 1 corridor for cars, but then it’s also right at a Metro station.”
Boysko, who wants to make sure transit systems are funded adequately, predicted the governor would not put any money in his budget proposal for Metro immediately, but said lawmakers will negotiate with him and the administration through the session.
“But again, it is a non-starter for me for the project down in Alexandria if we do not have adequate funding for Metro and transportation,” Boysko said. “Schools, transportation, and mental health have to be at the top of the list before anything else, and so we will be ready to come to the table and work, but we want to see some progress on all these things.”
In a joint statement from Monumental Sports and Entertainment, the governor’s office, city of Alexandria and JBG SMITH, the groups are beginning to share their vision to “build a world-class” entertainment district and engage with the community to gain their feedback.
“Alexandria residents are rightfully proud of their city and can be assured we will listen to the needs and concerns of the community,” the joint statement reads. “Monumental Sports & Entertainment, the Commonwealth of Virginia, the City of Alexandria, and JBG SMITH look forward to partnering with community members in Alexandria and fans across the Greater Washington Area to bring to life a collective vision for Potomac Yard and create exceptional experiences and regional economic growth for decades to come.”
Correction: An earlier version of this story stated that Del. Elizabeth Bennett-Parker, D-Alexandria, was newly elected; she was actually elected to her second term. Bennett-Parker also said the arena proposal “could” diversify Alexandria’s tax revenue, not that it “would,” as previously reported.
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