NoVa Aena Proposal Runs Into Trouble as Top Senate Democrat Presses Pause

A plan backed by Virginia Gov. Glenn Youngkin to construct an arena for the Washington Wizards and Washington Capitals in Northern Virginia ran into trouble this weekend as Sen. Louise Lucas, the powerful Democrat who heads the Senate money committee, said she wouldn’t bring a necessary bill to a vote.

Sens. Scott Surovell, D-Fairfax, and Louise Lucas, D-Portsmouth, taking questions from reporters during the 2024 General Assembly Session. (Nathaniel Cline/Virginia Mercury)

On Saturday, Lucas, D-Portsmouth, posted on X, the platform formerly known as Twitter, that legislation to create a new sports authority to oversee the project’s financing would not be on the Senate Finance and Appropriations docket because the proposal “is not ready for prime time.”

“This is what happens when the Executive Branch doesn’t operate in good faith and doesn’t have respect for the Legislative Branch,” she wrote, in a comment widely interpreted to be a response to negative remarks about Democrats made by Youngkin during a mock debate held at Washington & Lee University Saturday.

Lucas confirmed that decision during the Senate Finance and Appropriations Committee meeting Monday, saying that the “Glenn-Dome” proposal “has many unanswered questions and potential conflicts of interest.

“If the project’s revenues are insufficient to cover the debt, taxpayers are on the hook to bail out this project,” she said. “The underlying finances show that this project is not viable without our credit rating. Once we open the tap of financing and giveaways for billionaires, we’ve opened the door for a future governor to ask for similar treatment.”

With the approach of Tuesday’s crossover deadline, when each chamber must complete work on its own legislation, the move would effectively kill the bill in the Senate, where Majority Leader Scott Surovell, D-Fairfax, was carrying it. But the proposal remains alive in the House, where negotiations are likely to continue.

Speaking to reporters Monday evening after the House advanced its version of the arena bill with no drama, House Speaker Don Scott, D-Portsmouth, said he doesn’t take issue with the Senate being “vigilant” but expects negotiations to continue.

“I respect the senator’s viewpoints,” Scott said of Lucas. “Because she’s been here a while and knows how this game is played. There are a lot of pieces on this chessboard. And that’s just one of them.”

Rob Damschen, a spokesman for the governor, said in a statement, “The governor is confident at the end of the day that the General Assembly will come together because this project is good for the entire commonwealth.”

Damschen said the arena project would create 30,000 jobs and unlock billions in new revenue that could be used to expand toll relief in Portsmouth — a priority of Lucas heading into this year’s legislative session — as well as increased funding for Interstate 81 and education.

An illustration of the proposed entertainment district in the City of Alexandria. (Courtesy of JBG SMITH)

During Monday’s money committee hearing, Senate Minority Leader Ryan McDougle, R-Hanover, urged Lucas to reconsider the decision, saying, “The issues you just articulated about the bill are ones that we should all talk about. They’re ones that we should debate in public. They are the ones that we should all cast votes on and have ‘yeas’ or ‘nays’ regardless of whether it’s a good idea or a bad idea.”

The move caused immediate waves in Richmond, with the Senate Republican Caucus issuing a statement accusing Democrats of “politically targeting the Governor and pushing the responsibilities of democracy aside.”

Caucus Chair Mark Obenshain, R-Rockingham, said in a statement that “the only plausible explanation for this move is that there were not enough votes in the Senate Finance Committee to defeat the bill. This departure from the traditions of the Senate is unfortunate and clearly indicates a deep division among Senate Democrats.”

Democratic criticism

As envisioned, the deal being championed by Youngkin would call for the new sports authority to issue $2 billion in bonds to develop the arena and an associated entertainment district in the Potomac Yard neighborhood of Alexandria.

Monumental Sports and Entertainment, which owns the Capitals and Wizards franchises, would have a 40-year lease on the site and be required to 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. Virginia could be required to put forward $135 to 215 million for transportation investments, according to a study commissioned by the governor’s administration.

Study finds arena plan would need $135 to $215 million in transportation investments

Youngkin has said the project could contribute an estimated $12 billion to Virginia and Alexandria over the coming decades.

Surovell and Lucas said Monday the decision not to act on the legislation stemmed from a number of concerns with the approvals of and financing for the project and what they described as Youngkin’s unwillingness to negotiate with Democrats.

The state’s Major Economic Incentives Project Approval Commission, which unanimously backed the proposed deal in December, included many outgoing legislators, they complained. Neither Surovell nor Lucas were on the committee.

“That’s where the real serious vetting goes on,” Surovell said. “It’s all in a closed session behind closed doors.”

The two also questioned the project’s financing structure, which they said had never been used before.

A financial analysis of the proposal prepared for the Youngkin administration by investment bank JPMorgan, which partially owns the property with majority owner JBG Smith, estimated the net cost to taxpayers as $1.35 billion, according to The Washington Post, which obtained the document through a records request. Youngkin has countered that most of those costs would come from revenue generated by the project that Virginia wouldn’t otherwise receive.

Some lawmakers and opponents of the project have urged the administration to make the study easily accessible, while Surovell has said Democrats would have preferred an independent review that doesn’t involve a partial owner of the property.

Residents from the city of Alexandria traveled to Richmond in protest of an arena proposal to bring the Washington Wizards and Washington Capitals to Northern Virginia. (Nathaniel Cline/Virginia Mercury)

Surovell said Democrats have asked the administration if the project could be funded differently but have not received any response.

“We’ve been told that piece of the bill is untouchable, and I think that’s a real problem for the chairman and our caucus,” he said.

Both he and Lucas criticized Youngkin sharply for what they characterized as an unwillingness to work with Democrats, who narrowly control both chambers of the General Assembly, on their legislative priorities, including raising the minimum wage and allowing cannabis sales. Yet, Surovell did credit the governor for his willingness to discuss Metro’s funding shortfall.

“I don’t think putting the bill up would have resulted in a different outcome at this point,” Surovell said. “I think there’s a lot of feeling in our caucus that the governor has to show some more openness to talking about our issues.”

Youngkin’s speech Saturday during Washington & Lee’s mock convention was the “final straw” for Democrats, said Surovell.

“Today’s progressive Democratic Party does not believe in, nor do they want, a strong America and America with no rivals,” said Youngkin, according to a recording of his remarks. “They are content to concede to compromise a way to abandon the very foundations that have made America exceptional.”

The House bill

A companion bill that remains alive in the House after passing that chamber’s Appropriations Committee Friday includes a reenactment clause that would require the General Assembly to approve the proposal again in 2025 in order for the project to move forward.

But even if the bill passes the House, Lucas said she doesn’t see any future for it in the Senate.

“I am not going to serve as the chair of Finance and Appropriations after all these years of waiting to get in that seat to have something like that happen,” Lucas said. “[I’m] just not going to do it.”

There were some indications Monday that the project might not be doomed. Sen. Adam Ebbin, D-Alexandria, who represents the area where the arena would be constructed, issued a lengthy press release calling the proposal “a unique opportunity for Alexandria to diversify its tax base” and outlining issues that would need to be addressed to win his support.

“In my opinion, it is critical we don’t rush to approve a project that would impact generations of Virginians without answers to important questions,” Ebbin wrote.

But he also pointed out that the Senate rules allow the governor to send a bill to the General Assembly for its consideration “at any time,” and the project was included in Youngkin’s budget proposal.

In a statement, Monumental Sports & Entertainment did not address Lucas’ decision in the Senate. However, the group said it’s encouraged by the progress of the companion bill in the House.

“We have had healthy discussions with members across the General Assembly and council in Alexandria, and we are eager to work with the lawmakers in Richmond to provide all information they might need to feel comfortable about this deal,” Monumental wrote.

Meanwhile, Washington, D.C., is still making efforts to keep the Wizards and Capitals at their current home at Capital One Arena. Officials previously offered $500 million in financing for an $800 million renovation of the arena as an inducement for the teams to stay in the District. And this weekend, D.C. Mayor Muriel Bowser penned an op-ed in the Washington Post declaring the city intends to “enforce the leases with Monumental that require the Wizards and Capitals to play at the arena through 2047.”

This story has been updated with comments from House Speaker Don Scott. Senior Reporter Graham Moomaw contributed reporting.

by Nathaniel Cline, Virginia Mercury

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