Bill to help relocate Washington Capitals, Wizards sails through 1st Virginia legislative hearing

RICHMOND, Va. — Legislation supporting a plan to move the NBA’s Washington Wizards and the NHL’s Washington Capitals across the Potomac River into northern Virginia easily cleared an early hurdle in the state Legislature on Friday.

Lawmakers on the Virginia House Appropriations Committee voted 17-3 to advance the measure, a top priority of Republican Gov. Glenn Youngkin, to the floor of the House of Representatives. Although the bill passed overwhelmingly, several senior Democratic lawmakers took care to say that their support for the measure at this time was in the best interest of keeping negotiations on the deal going.

“This process will take at least the remainder of our session to decide whether or not to pass this legislation,” Democratic Rep. Mark Sickles of Fairfax County, who sponsored the bill, said before the committee vote.

The legislation could result in a legacy-defining project for Youngkin, a former college basketball player. Virginia is the nation’s most populous state without a major pro sports franchise, something administration officials from both parties have tried to change over decades.

Youngkin and entrepreneur Ted Leonsis, an ultra-wealthy former AOL executive and the CEO of the teams’ parent company, Monumental Sports and Entertainment, announced in December that they had agreed to a deal to relocate the Capitals and Wizards.

The plan calls for the creation of a $2 billion project in the Potomac Yard section of Alexandria that would include an arena, practice facility and headquarters for Monumental, plus a separate performing arts venue, all just miles from Capital One Arena , where the teams currently play in Washington.

Monumental and the city of Alexandria would put up money up front under the terms of the deal, but about $1.5 billion would be financed through bonds issued by a government agency that would create this year’s legislation.

The bonds would be repaid through a mix of revenue from the project, including a ticket tax, parking fees, concession taxes, income taxes levied on athletes performing at the arena, and naming rights from the district, among other sources. Advocates say these sources will more than cover the debt. But about a third of the funding would be covered by the city and state governments’ “moral obligation,” meaning taxpayers could be blamed if project revenues don’t come in as expected.

Critics of the project, including some who spoke out against the bill Friday, questioned why the tax subsidy was appropriate.

“This is a bad deal for every Virginia taxpayer. We are saddling our children and grandchildren with 40 years of paying off debt to help a billionaire get richer and richer,” said Andrew Macdonald, a former Alexandria city councilman and organizer of the Coalition to Stop the Arena at Potomac Yard, which is a held a meeting. rally on Capitol Square a day earlier.

The committee came up with a replacement version of the legislation initially introduced by Democratic Del. Luke Torian. It included a newly added provision that would require lawmakers to re-sign the deal next year before the legislation would take effect, something critics of the project welcomed.

Monica Dixon, Monumental’s president of external affairs and chief administrative officer, said the company was “very pleased” with Friday’s developments.

“We’ll look at it, but don’t expect to have any major concerns,” Dixon said of the revised bill, which will likely undergo further revisions as it moves through the legislative process.

Democratic legislative leaders, who control the General Assembly, have generally shown openness or even optimism about passage of the arena legislation this year. But they have stopped short of making a full statement of support for the project, both citing concerns that have yet to be worked out and making clear that the proposal is a bargaining chip in broader discussions about their own priorities.

Sen. L. Louise Lucas, chair of the Senate Finance Committee, has said she wants attention on increased funding for public schools, toll relief for her Hampton Roads region and legalized sales of recreational cannabis in conjunction with the arena deal.

A Senate committee was at one point expected to take up that chamber’s version of the bill on Thursday. But the hearing was postponed, and as of Friday afternoon it was unclear when the bill might be considered before Tuesday’s “crossover” deadline, which requires non-budget bills to clear their chambers of origin.

Senate Majority Leader Scott Surovell, the sponsor of that chamber’s bill, said in a text message that his group is still working to reach consensus on changes to the legislation as introduced.

Many critics of the project have focused on the impact on transportation in an already congested part of Virginia.

The state released a transportation plan last week to address Alexandria residents’ concerns about traffic. Officials say they will allocate $200 million for transportation improvements in the corridor, which is already seeing increased use with a new Amazon headquarters and a new Virginia Tech campus under construction.

The plan aims for half of the arena’s visitors to arrive by public transportation, bicycle or on foot and relies heavily on a newly built $370 million Potomac Yard subway station. But data from the plan shows that the station, as currently configured, would be overwhelmed during peak hours on game nights with “extreme crowds” lasting 60 to 90 minutes.

The plan estimates that improvements to the station and better service could reduce congestion to 30 to 45 minutes.

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Barakat reported from Falls Church, Virginia.