Virginia senator says deal to relocate Wizards, Capitals not happening

Top Democrats in the Virginia Senate have dealt a blow to legislation to help pave the way for the NBA's Washington Wizards and NHL's Washington Capitals to relocate to northern Virginia, refusing to docket the bill for a hearing and expressing serious reservations Monday about the financing of the proposed deal.

Sen. L. Louise Lucas, who holds great sway in the General Assembly as chair of the Senate Finance & Appropriations Committee, first said over the weekend on social media that legislation underpinning the deal negotiated by Republican Gov. Glenn Youngkin was "not ready for prime time" and would not receive a hearing in her committee. The decision effectively killed the Senate version of the legislation because of a procedural deadline this week, though another bill is making progress in the House of Delegates, which is also controlled by Democrats.

Lucas, who took questions from reporters Monday morning along with Senate Majority Leader Scott Surovell, said Youngkin had made a series of mistakes in trying to advance the proposal through a General Assembly now in full Democratic control after November's elections.

Among them, she said, was a weekend speech at Washington and Lee University in which Youngkin took a broad swipe at Democrats collectively, saying the party does "not believe in — nor do they want — a strong America."

Lucas and Surovell also said legislators were not brought into the conversation about the deal to move the teams across the Potomac to Alexandria early enough. They questioned why it was put up for a vote before a legislative economic development commission that reviews proposed incentives just before outgoing lawmakers cycled off that panel.

Surovell said his caucus has concerns about whether the governor is truly willing to consider their priorities, including legislation to establish recreational cannabis sales and further increase the minimum wage, in negotiations over the legislation. Lucas is also seeking toll relief for the Hampton Roads region.

Asked if the deal was "dead," Lucas responded bluntly: "As far as I'm concerned, it is."

Lucas was asked if changes to the House version of the bill, which will cross over to the Senate for consideration assuming it clears a floor vote, could make the proposal palatable.

She answered by saying she had a strenuous objection to the project financing as currently envisioned because of its use of moral obligation bonds backed by the state and by Alexandria. That means taxpayers could be on the hook if the project revenues don't come through as expected.

"As long as the full faith and credit of this Commonwealth is backing this project, my answer continues to be an absolute no," she said.

Surovell said Senate Democrats had asked questions about financing the deal another way but were told "that piece of the bill is untouchable." He added that he was unaware of moral obligation bonds — which are typically used in Virginia to help finance public infrastructure projects — being used for any similar economic development initiative.

Rob Damschen, communications director for Youngkin, said in a statement that the governor remains confident that the Assembly "will come together because this project is good for the entire Commonwealth."

"It creates 30,000 jobs and unlocks billions in new revenue that can be used to fund expanded toll relief in Portsmouth, increased funding for I-81, and new money for education for rural and urban school divisions across the Commonwealth," Damschen said.

Senate Republicans criticized Lucas' refusal to put the bill up for a committee vote, characterizing the move as a "pocket veto" of the governor's priority.

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

Youngkin and entrepreneur Ted Leonsis, a former AOL executive and the CEO of the teams' parent company, Monumental Sports and Entertainment, announced in December that they had reached an understanding on a deal to relocate the Capitals and Wizards.

The proposed new site in Alexandria would be just miles from where the teams currently play in Washington.

The legislation currently pending before the Assembly would set up a sports and entertainment authority that would issue the bonds that will help pay for the project. The bonds would be repaid through a mix of revenues from the arena and broader development surrounding it, 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.

Monica Dixon, a top executive at Monumental, said in a written statement Monday that the company is having "healthy discussions" with General Assembly leaders and Alexandria City Council members, who will also need to sign off on the deal. Dixon said the company is encouraged by Friday's vote in a House committee, where the bill passed, 17-3.

Virginia's elected officials have long sought to lure a major pro team to the state, including an unsuccessful effort to secure a Major League Baseball team two decades ago.

The baseball bid shared many structural similarities to what is now proposed, including a reliance on moral obligation bonds, which drew concerns from top Republican leaders at the time.

Reporting by The Associated Press.