Work on compromise budget legislation that Virginia lawmakers will undertake later this week is complete, and the bill does not include language that would allow for a proposed relocation by the NBA’s Washington Wizards and the NHL’s Washington Capitals to Alexandria, they top lawmakers said Thursday.
The development doesn’t necessarily mean the end of Republican Gov. Glenn Youngkin’s plan to lure teams across the Potomac River with a $2 billion development district featuring a new arena. But it’s another blow to the proposal, a top priority for Youngkin.
In a news conference at the foot of the Capitol steps, the governor said he believes the Democrat-led General Assembly is poised to make “a colossal mistake.” He tried to argue the need to reconsider and reinstate the terms of the project in the budget before bringing it to his desk.
“They have a chance to stand up and do what’s right. They have the opportunity to evaluate this one-of-a-kind economic development opportunity on the merits of the opportunity. And I will repeat once again that the merits are really, really amazing,” she said.
Democratic Sen. L. Louise Lucas of Portsmouth, the Senate’s top negotiator and a sharp critic of Youngkin, stood on the Capitol porch, looking down on the governor and sometimes smiling as she spoke. She previously told reporters she was staunchly opposed to the deal, largely because of its reliance on bonds guaranteed by state and city governments.
Senate Majority Leader Scott Surovell said he opposes the effort to include the arena project in the budget because the process does not provide a full opportunity for debate. Surovell also criticized Youngkin for what he called the governor’s reluctance to address some of Democrats’ top priorities.
“This is a process that requires compromise, and so far the governor has given very little indication of his willingness to compromise,” Surovell said.
Although the full text of the budget bill was not immediately available to the public, both Lucas and Democrat Luke Torian, who chairs the House Appropriations Committee and led negotiations for its chamber, confirmed that the provisions related to the arena had been removed from the legislation, which lawmakers are expected to adopt Saturday.
The legislation was in the hands of a conference committee — a small, bipartisan group of lawmakers who met behind closed doors — after the two chambers passed competing budget bills earlier this session and then rejected both of them .
Torian, who had sponsored a stand-alone version of the legislation to support the deal that was previously rejected, said he was “maybe a little disappointed” that the text didn’t make it into the budget.
“But that is the nature of trying to govern here in the Commonwealth,” he said.
The budget was the last remaining vehicle for the legislation needed to pave the way for the deal because Torian’s bill and another standalone version failed earlier this session. Lucas refused to give them a hearing on his committee.
In the future, once lawmakers send the governor a budget, he could pursue an amendment and restore the bill’s language, or he could call a special session on the issue.
Lawmakers could also reject the budget bill and send it back to the conference committee for further consideration.
Youngkin and entrepreneur Ted Leonsis, an entrepreneur and ultra-wealthy CEO of the teams’ parent company, Monumental Sports and Entertainment, announced in December that they had reached an agreement on a deal to move the Capitals and Wizards.
The company had no immediate comment on the development Thursday.
At least one D.C. official welcomed the snag in Virginia and expressed hope that the teams would remain in the district.
“The Arena and Monumental Sports have been partners of the District for nearly 30 years and are a great asset to downtown,” D.C. Council President Phil Mendelson said in a statement. “As a deal in Virginia remains uncertain, the Board continues to stand ready to accommodate Monumental Sports’ change in mindset.”
The plan calls for the creation of a $2 billion complex, partly publicly funded, in the Potomac Yard section of Alexandria that would include an arena, rehearsal facility and headquarters for Monumental, as well as a venue separate for the performing arts, all just a few miles from Capital One Arena, where the teams currently play in Washington.
Under the proposed terms of the deal, Monumental and the city of Alexandria would contribute some seed money, but about $1.5 billion would be financed through bonds issued by a government entity that lawmakers were expected to establish this year.
The bonds were expected to be repaid through a mix of revenues from the project, including a ticket tax, parking fees, concession fees, income taxes collected on athletes performing at the arena, and naming rights from the district . Supporters say those sources will more than cover the debt, creating new revenue for the city and state in the project’s first year. But about a third of the funding, under the terms lawmakers were supposed to vote on, would be backed by the “moral obligation” of city and state governments, meaning taxpayers could be in trouble if project revenue doesn’t should they arrive. as expected.
Youngkin, a private equity executive before running for public office, stressed that the state would not put up cash up front and that revenue that “otherwise wouldn’t be there” would help finance the deal. And he warned that the way the Senate handled the deal could jeopardize the state’s business-friendly reputation.
Lucas dismissed that concern and said he had serious concerns about the idea of ”putting taxpayer money behind a billionaire’s project.”
He acknowledged that his move to block the arena could hurt some of Democrats’ top legislative priorities, such as a measure establishing retail sales of marijuana. But he said he thought it was worth it.
“I have stood firm on what I believe in my heart is in the best interests of the Commonwealth. And that was just to say no to Glenn’s dome,” he said, she said, using the nickname he gave the proposed arena.
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Associated Press writer Denise Lavoie contributed to this report.