WASHINGTON — For the first time since he announced plans to move the Washington Capitals and Washington Wizards out of D.C. for a new Northern Virginia arena in Alexandria, Monumental Sports and Entertainment owner Ted Leonsis spoke about his controversial decision.
Leonsis said he was surprised by the outrage on social media about his plan to move from Capital One Arena in Penn Quarter to a state-of-the-art 20,000-seat arena in Potomac Yard.
“I've been hurt but that's my personality,” Leonsis said in a one-on-one interview with WUSA9 Chief Investigative Reporter Eric Flack. “I'm not your typical average businessperson. I care what people think.”
The proposed arena and music venue would sit on 12 acres, paid for with a $2.8 billion loan from the state of Virginia in the form of what’s known as “moral obligation bonds.” Monumental would contribute $400 million and the city of Alexandria roughly $100 million.
“It really was an issue of the potential of having this blank slate if you will, and starting from scratch and imagining how can we build an iconic next generation, kind of digital interactive campus,” Leonsis said.
“What I was most focused on is, what will sports be looking like, what will the fan experience be looking like 10, 20, 30 years from now?" Leonsis said. "[Capital One] has been a great home for us and we appreciate everything about it. But it's three acres and it's very hard to expand.”
Tax revenue from the arena and 6,000-seat concert venue - including ticket sales, parking and naming rights for everything except the arena - would repay the loan over 40 years. The Virginia Sports Authority, which would be created by the Virginia Legislature to authorize the arena loan, would be required to put two years of payments in a rainy-day reserve fund just in case revenue projections don’t meet expectations.
As part of the agreement, Monumental would sign a 35-year lease to stay in the new arena. Leonsis said criticism that he was stealing his teams away from the District is unfounded.
“The compelling reason that we consider moving to Virginia is it's still the DMV. It's three and a half miles from here,” Leonsis said, referring to the distance from Capital One Arena.
When asked if fans from Maryland will still make the trip, Leonsis noted the drive from his home in Potomac, Maryland to the new arena site will be eight minutes shorter once construction on the GW Parkway is complete compared to his current commute to Capital One Arena.
While fans in D.C. have been largely dismayed over the move, opposition in Alexandria is mounting as well, led by the grassroots organization “Stop the Potomac Yard Arena.” Much of the opposition centers around traffic.
Leonsis said he understands those concerns.
“They have every right to be, but there's traffic today,” Leonsis said. “We want to be a solution to the traffic.”
“We've been looking at best practices on all of the arenas where it works and traffic is mitigated,” he continued. “And so I'm looking forward to being a part of a solution and not being additive.”
Leonsis cited work done at the new Golden State Warriors arena in San Francisco easing access to Uber and Lyft.
Leonsis said he is also aware of complaints about whether the newly opened Potomac Yard Metro stop can handle gameday traffic.
“Nationals Park had a Metro. Their stadium is twice as big as our arena,” Leonis said. “So what did the Nationals do? What did the city do to accommodate the Nationals? They added elevators. They added easier ways to get in and out, but they didn't have to do anything to the actual track. They didn't have to do anything to the station. That's what we're going to have to do.”
In an open letter to fans on January 25, Leonsis wrote between the Capitals and the Wizards, that 44% of fans who attend games are from Virginia, 41% are from Maryland and 15% are from Washington, DC. In his interview, Leonsis said the decision to move was not about concerns over rising crime around Capital One Arena.
“Much less than I think everyone is talking about,” Leonsis said. “I have faith in the city, and the mayor, and the city council, and the police that they're going to take this seriously.”
Leonsis did not seem to leave the door open to his teams remaining in the District, provided the financing plan receives state and Alexandria approvals.
“The die is cast,” Leonsis said.
Virginia would be required to pay off the $2.8 billion in moral obligation bonds if the arena did not meet financial and revenue projections. But Monumental Sports and Entertainment said that won’t happen for 3 reasons.
- Only one-third of the projected revenue is needed to pay off the bond. The rest go to Arlington and the state.
- The Virginia Sports Authority, which would be created to authorize the loan, would be required to put two years of payments in a rainy-day reserve fund just in case.
- The lending institution and Virginia government take a conservative approach to revenue estimates, providing what’s known in the financial industry as “2 times coverage on the loan.”
Governor Glen Youngkin estimates the project would create 30,000 jobs and $12 billion of economic benefits to the state.
In a statement to WUSA9, the Youngkin administration wrote “This one-of-a-kind public-private partnership will create the most advanced innovation corridor in America.”
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