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Out & About April 2024
Israeli defense giant launches Herndon aerospace accelerator
Herndon will soon have something in common with Tel Aviv — an aerospace accelerator and innovation center run by Israeli state-owned aerospace and defense company Israel Aerospace Industries, which helped design Israel’s Iron Dome missile defense system.
IAI and IAI North America, its Herndon-based U.S. government contracting subsidiary, in cooperation with California- and Washington, D.C.-based Starburst Aerospace, a global startup accelerator and strategic advisory firm, are launching an accelerator and innovation center called IAI Catalyst.
IAI has an innovation center in Tel Aviv supporting Israeli startups. Starburst, which consults for NASA and NATO, has run similar programs in the United States and Europe, but this is the first time Starburst is partnering with IAI and IAI North America to run an accelerator. IAI has about 15,000 employees, about half of whom are engineers.
IAI Catalyst has recruited the first cohort of startups for its inaugural five-month accelerator program, supporting early-stage startups focused on sectors including artificial intelligence and autonomy; quantum science; sustainability and energy; and space tech.
Applications for the first cohort — one of two planned for the year — closed in March, and four to six participating companies are expected to be announced in April. The spring program is expected to start the same month, with a demo day planned for September. The Herndon accelerator is open to companies nationwide.
“Our job will be to open all the doors for the startups, not just with IAI, but everybody that they can provide value to,” says Noemie Alliel, Starburst’s managing director for Israel.
Over five months, the cohort will attend three in-person, weeklong gatherings; at the beginning, midway and during the final week, when the companies will pitch in front of stakeholders. The rest of the program will be virtual.
Each selected company receives a $100,000 investment in exchange for equity, and another $100,000 worth of in-kind benefits such as access to IAI and Starburst’s networks of clients and partners, mentoring from industry experts, access to technology and free office space.
Innovation is a key focus at IAI, which feels it’s important to stay relevant and competitive in the marketplace, Alliel says, which is why it wants to work with startups.
“It will be like win-win opportunities for both IAI and startups to work hand-in-hand,” she says.
Dominion to sell 50% interest in offshore wind farm
Dominion Energy announced Feb. 22 it had reached an agreement with investment firm Stonepeak to sell a 50% noncontrolling stake in the utility‘s Coastal Virginia Offshore Wind project for nearly $3 billion.
The deal is expected to close by the end of 2024, if approved by the Virginia State Corporation Commission and the North Carolina Utilities Commission, as well as federal regulatory agencies. Richmond-based Dominion would retain full operational control over the $9.8 billion CVOW project, which is under development 27 miles off the Virginia Beach coast. The 176-turbine offshore wind farm received final federal approvals in January and is expected to begin construction in May.
“The Coastal Virginia Offshore Wind project continues to proceed on time and on budget and consistent with our previously communicated timing and cost expectations,” Dominion Chair, President and CEO Bob Blue said in a statement. “A competitive partnership process attracted high-quality interest, resulting in a compelling partner for CVOW.”
Under the deal, Dominion Energy expects to receive $3 billion — representing 50% of the offshore wind farm‘s construction costs through the anticipated closing of the deal by Dec. 31, minus $145 million, the initial withholding amount. If total construction costs remain at the current budget of $9.8 billion or less, excluding financing costs, Dominion will get back $100 million from the withholding amount.
However, if construction costs more than $11.3 billion, the Fortune 500 utility will receive no money back from the withheld $145 million. If the project costs reach $11.3 billion, Stonepeak and Dominion would each contribute 50% of additional capital costs needed to fund construction, but if the project costs between $11.3 billion and $13.7 billion, Stonepeak would not be required to contribute more capital to pay the additional costs, although it has the option to do so.
In terms of structure, Stonepeak would invest in a newly formed Virginia-based utility subsidiary of Dominion Energy Virginia. The transaction is expected to improve Dominion’s estimated 2024 consolidated funds from operations-to-debt ratio by approximately 1% and reduce the utility’s overall financing needs during construction.
In September 2023, Dominion said it intended to sell a noncontrolling interest in the CVOW to lower risk in the project and solidify the company’s balance sheet. In November 2023, Dominion officials said during its third-quarter earnings call that the utility was in the advanced stages of finding a co-investor.
Clarke County limits solar development
Clarke County prioritizes agriculture. That’s what drives most of its policy-making as the county navigates the complexities of renewable energy development while preserving its farmland, explains County Administrator Chris Boies.
In January, the county’s Board of Supervisors approved new regulations for utility-scale solar projects.
Boies says the ordinance has always required solar plants to be situated near electrical substations, leveraging the county’s existing infrastructure. But the new amendments have explicitly named two substations, ensuring solar projects remain contiguous and within a 1-mile radius of those facilities.
“We also still allow and encourage household-sized solar for individual homes and farms,” he says. “We are not against solar; we are against losing agricultural land.”
With approximately 25% of the county under permanent conservation easements, maintaining open spaces and supporting farming communities are priorities reflected in the county’s comprehensive plan.
Board of Supervisors Chairman David Weiss, a local farmer, is a big supporter of the amended regulations. “This is not an anti-solar decision; it’s a land-use issue,” he says. “And we feel that, based on our size and our energy consumption and the small county that we are, we have done our share.”
One 20-megawatt solar project by Hecate Energy has already been approved, with the first of its two phases built out. A second proposal comes from Horus Virginia, which has requested to build a 50-megawatt solar farm.
While the project is pending, it’s been filed under the former regulations, ensuring it’s grandfathered in, says Ty Lawson, a land-use lawyer representing Horus Virginia.
If the project is approved, the county will be maxed out on solar farms, Boies says.
“It requires a fair amount of land, and as you go closer to urban centers, it’s harder to find the hundreds of acres of contiguous land to put the panels on,” Lawson says. “So, generally you do see commercial solar fields in places that are not densely occupied.”
Horus Virginia has proposed a site spanning over 400 acres that ensures minimal visibility from surrounding properties and public roads, Lawson says.
The project is a long-term investment, with solar panels typically having a lifespan of around 30 years, he adds.
At its Feb. 2 meeting, the county’s Planning Commission unanimously recommended approval of the solar farm development. During its Feb. 20 meeting, the Board of Supervisors authorized a public hearing that was set for March 19.
Top Five April 2024
The top five most-read daily news stories on VirginiaBusiness.com from Feb. 14 to March 13 were led by news that Danish toymaker Lego will delay production at its Chesterfield County facility until 2027.
1 | Lego delays Chesterfield production start to 2027
Lego Group will begin production at its $1 billion manufacturing facility at Meadowville Technology Park at least a year later than originally announced. (Feb. 15)
2 | Capital One to buy Discover in $35.3 billion deal
McLean-based Capital One Financial plans to acquire Discover Financial Services in an all-stock deal that would make Capital One the nation’s biggest credit card lender. (Feb. 19)
3 | Dominion to sell 50% interest in Virginia Beach offshore wind farm for $3 billion
Dominion Energy reached an agreement to sell a 50% noncontrolling stake in its Coastal Virginia Offshore Wind project to investment firm Stonepeak. (Feb. 22)
4 | Liberty University fined $14 million for underreporting campus crime
The U.S. Department of Education levied a record fine against Liberty in a settlement of alleged Clery Act violations by the Lynchburg-based Christian university. (March 5)
5 | Norfolk looks to renovate Scope, Chrysler Hall instead of building arena
Norfolk is considering renovating the older city-owned venues rather than building anew arena at the former Military Circle Mall site. (Feb. 22)
Youngkin vetoes cannabis, minimum wage legislation
Virginia Gov. Glenn Youngkin vetoed legislation Thursday that would have put Virginia on the path to a $15 per hour minimum wage and set up a retail cannabis market, killing bills that were important to Democratic state legislators he blamed for torpedoing the $2 billion Alexandria sports arena deal he’d championed.
Amid a deepening partisan divide in Richmond, Republican Youngkin announced six more vetoes Thursday evening, targeting legislation supported by Democratic lawmakers that would have set a $15 per hour minimum wage in Virginia beginning in 2026, as well as a measure that would have established a retail market structure for recreational marijuana sales beginning next year.
The vetoes were hardly a surprise to political observers across the state, as Youngkin had previously signaled his lack of support for a legal cannabis retail market, although legislators from both parties said before this year’s General Assembly session that they have problems with the status quo, in which it’s legal to possess small amounts of marijuana and purchase cannabis products with a doctor’s prescription in licensed dispensaries — and yet the billion-dollar recreational cannabis retail black market remains unregulated and untaxed.
HB 1 and its Virginia State Senate counterpart, SB 1, would have increased the state’s mandatory minimum wage from $12 an hour to $13.50 starting Jan. 1, 2025, and set a $15 per hour minimum wage at the start of 2026. The legislation passed through the General Assembly along party lines this session — with 51 Democrats voting yes, and 49 Republicans voting no in the House of Delegates, and 21-18 in the Senate, with Republican Sen. Mark Peake abstaining.
Youngkin wrote in his veto statement that raising the state’s minimum wage to $15 an hour in less than two years “would implement drastic wage mandates, raise costs on families and small businesses, jeopardize jobs and fail to recognize regional economic differences across Virginia.” He had previously said there was no need for the state to raise the mandatory minimum wage, and that the free market was taking care of the issue.
The Virginia Chamber of Commerce applauded the minimum wage veto, saying in a statement Thursday, “Although Virginia’s economy has recovered strongly from the pandemic, surpassing pre-pandemic employment levels, not all regions of the commonwealth have experienced equal economic growth. Raising the hourly minimum wage to $15 would have led to shuttered businesses and lost jobs, particularly in the areas most in need of strong economic growth and particularly for Virginia’s small businesses.”
However, Sen. Ghazala Hashmi, D-Chesterfield, tweeted Thursday evening that “every working American deserves a living wage. Period,” in reference to the minimum wage veto, and Richmond Mayor Levar Stoney, a Democrat who is running for his party’s nomination for governor, wrote that he has proposed raising city employees’ minimum wage to $20 an hour, adding, “It’s high time our governor stops playing political games and focuses on what our families need to rise to the middle class.”
Cannabis retail legislation
Cannabis bills HB 698 and SB 448 passed mostly along party lines too, although Republicans Del. Chris Obenshain and Sen. Christie New Craig joined Democrats in voting yes. If enacted, the measures would have established a framework to allow legal retail sales of recreational marijuana in Virginia starting May 1, 2025, and issued state licenses to sell marijuana on Sept. 1, 2024.
“The proposed legalization of retail marijuana in the commonwealth endangers Virginians’ health and safety,” Youngkin wrote in his veto statement on the cannabis legislation. “States following this path have seen adverse effects on children’s and adolescents’ health and safety, increased gang activity and violent crime, significant deterioration in mental health, decreased road safety, and significant costs associated with retail marijuana that far exceed tax revenue. It also does not eliminate the illegal black market sale of cannabis, nor guarantee product safety. Addressing the inconsistencies in enforcement and regulation in Virginia’s current laws does not justify expanding access to cannabis, following the failed paths of other states and endangering Virginians’ health and safety.”
The twin bills’ chief sponsors — Sen. Aaron Rouse, D-Virginia Beach, and Del. Paul Krizek, D-Fairfax — blasted the governor’s veto in statements Thursday. “Gov. Youngkin’s dismissive stance towards addressing Virginia’s cannabis sales dilemma is unacceptable. Public servants are obligated to tackle pressing issues, regardless of their origin or culpability. They cannot cherry-pick which problems to address,” Rouse said, while Krizek said the governor’s “failure to act allows an already thriving cannabis market to persist, fueling criminal activity and endangering our communities.”
Thursday’s vetoes came after the legislative scuttling of a $2 billion deal to bring a proposed sports arena in Alexandria, a controversial deal touted by Youngkin as potentially producing 30,000 jobs for the state and billions in economic activity, while critics in the Virginia State Senate — led by Democratic Sen. Louise Lucas, who chairs the powerful Senate Finance & Appropriations Committee — balked at the idea of the state taking on approximately $1.3 billion in debt and establishing a state authority to manage the properties.
Although the deal was still considered alive — at least on paper — until the state’s 2024-26 budget is finalized in April, the Washington Wizards and Capitals’ majority owner, Monumental Sports & Entertainment CEO Ted Leonsis, and Washington, D.C., Mayor Muriel Bowser signed an agreement Thursday that will keep the NBA and NHL teams in the District of Columbia through 2050, putting an end to all negotiations between Monumental, the state and the City of Alexandria.
The arena proposal, while not directly tied to cannabis and minimum wage legislation, became a partisan battleground as Youngkin indicated that he wouldn’t compromise with Democrats on either priority, despite needing their votes to establish the state authority to own the arena and entertainment district. Meanwhile, Lucas blocked Senate Finance Committee votes on legislation that would have created the authority, and the state legislature’s 2024-26 budget amendments dropped all mention of the authority.
In a news conference after the General Assembly’s regular session closed in March without a Senate vote on the arena authority, Youngkin said he didn’t “have any interest in the cannabis legislation. … Bluntly, you want to talk about putting a cannabis shop on every corner. I don’t quite get it.”
General Assembly tackles consumer transparency, fails to fix ticket service fees
RICHMOND — Virginia lawmakers, in alignment with recent federal attempts, introduced consumer protection bills to tackle surprise tickets fees and recurring subscriptions, but only one measure passed.
Autorenewal notification updates — passed Del. Michelle Maldonado, D-Manassas, introduced House Bill 744 to update current state code to add “small business” to the existing consumer protections for auto renewal. That includes any goods, services, money or credit for business purposes.
Maldonado was presented with the issue by a constituent and small business owner concerned about auto renewals for subscription services, she said.
“I think that it is always good for companies, for businesses and for consumers when there is clarity and a consistency of process,” Maldonado said. The state legislature in recent years has grappled with transparency around auto renewal notification and ensuring the consumer has a way to cancel their subscription. An update last year set a time frame that the business must notify the consumer within 30 days.
Maldonado’s bill now requires subscription services to inform customers of the option to cancel no less than 30 days and no more than 60 days of the billing date, if the contract is longer than 12 months.
For Virginians in a tumultuous financial situation, surprising or inconvenient subscription payments can mean the difference between paying a bill or putting gas in the car, according to Maldonado.
Maldonado is hopeful the bill will pass Gov. Glenn Youngkin‘s desk because it had strong bipartisan support in both chambers.
Ticket service fees and scalping — failed Del. Dan Helmer, D-Fairfax, introduced HB 277 to mandate that any ticket sold must display the total price upfront, including a resale ticket. New York, Tennessee and Connecticut have similar laws, according to a Ticketmaster brief on the topic. Sen. Stella Pekarsky, D-Fairfax, introduced Senate Bill 388, which had similar language in regards to misrepresenting a good or service and the disclosure of fees. It was amended in the House to reflect the language in Helmer’s bill.
Both bills passed their respective chambers with strong bipartisan support but could not pass a conference committee that tried to resolve the differences between the House and Senate amendments.
The House committed to creating a “ticket fee transparency act” that also allowed the attorney general’s office to litigate certain violations. In the end, there was a tied vote in the House and the Senate which ultimately kept the bills from passing after the presiding officers voted. HB 277 draws inspiration from the evergreen discussion around ticket costs for the Taylor Swift Eras tour, Helmer said.
But before that outrage existed, Pearl Jam challenged Ticketmaster in 1994. The band was frustrated by the ticket fees passed on to consumers, in part due to Ticketmaster’s exclusive contracts with stadiums, according to Rolling Stone.
Helmer learned from his staff how drip pricing fees sneakily make an already expensive ticket cost even more.
“I’ve been in the trenches fighting for price transparency for years,” Helmer said.
Helmer is excited to see this discussion taking place on a national level, but surprised the bill could not pass.
“We were disappointed because we’ve got to get rid of these junk fees,” said Stephanie Sedgwick, Helmer’s chief of staff.
Drip pricing and hidden fees are present in purchases such as airline tickets, food delivery and ticket pricing. A 2023 Senate Joint Economic report defined drip pricing as the practice of businesses showing a low base price, but various fees are added to the total throughout the purchase process.
A customer purchases a ticket that originally states the price is $50. As the purchasing process continues, the total increases when various convenience fees or services charges are added. The price may be nearly doubled by the time the checkout process is complete. Ticketmaster has transitioned toward optional all-in pricing to remove some of its added surprise fees. President Joe Biden met with representatives from many entertainment and lifestyle companies in June 2023, including Ticketmaster, DICE, SeatGeek and AirBnB.
Consumers using Ticketmaster can now see a display that explains the new all-in pricing model, if the venue or artist opts in. The tickets display all included fees as part of the total to pay, instead of additional fees tacked on to the end price.
However, fees can still be added to verified resale tickets through Ticketmaster. One example of this is the price of a resale two-day pass for live electronic act Pretty Lights in Hampton. An event pass with a listed price of $191 becomes over $230 during the checkout process.
Lucas Anderton is creative director for the political communication tech firm SBDigital and an avid concert goer. Anderton has traveled regularly to see some of his favorite jam bands like Phish and Goose, and knows tickets are difficult to find. The surprise ticket fees make it even harder, and also diminish transparency for fans.
“I think that we’re seeing fees that are as much as 75, 80% of the ticket value,” Anderton said. “It’s such a turn off.”
Hidden costs associated with rentals like AirBnB also directly relate to a music fan’s negative experience, considering the amount of people who travel for these big events, according to Anderton.
He is looking forward to all-in pricing becoming more common.
“I think that’s No. 1, is when you first click on that seat on the seat map, the seating chart, like the price it shows you is with fees and everything,” Anderton said.
Ongoing federal efforts The Biden administration has addressed drip pricing and junk fee issues since 2022. The White House announced a new strike force in early March this year that will examine “unfair fees,” which could save consumers an estimated $20 billion annually.
The Strike Force on Unfair and Illegal Pricing will also confront the issue of credit card late fees, which could reportedly save consumers $10 billion a year. The Credit Card Accountability Responsibility and Disclosure Act took effect in 2010 and set a precedent where banks could only charge late fees to cover the cost of a late payment.
Companies were allowed to set a $25 fee for the first late payment, and $35 for subsequent late payments, which increased to $30 and $41 due to annual inflation. Late fees are a “major driver” in the credit card company profit model, according to a report from the Consumer Financial Protection Bureau, or CFPB.
The CFPB in early March set the threshold for these late fees at $8. Larger card issuers can charge fees above the threshold if they can prove it will cover actual collection costs.
Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia.
Franklin County names economic development director
Roanoke County‘s assistant director for economic development, Danielle Poe, will start her new job as director of economic development for Franklin County on April 15.
Since joining Roanoke County in 2022, Poe has been responsible for real estate development, business retention and expansion and key community partnerships, Franklin County said in a statement. She succeeds Beth Simms, who left the Franklin County post in October 2023 after more than two years to become Patrick County’s administrator.
“Franklin County has made key public investments that position the county for growth,” Poe said. “I’m excited to put my passion for economic development to work helping the county take advantage of the opportunities ahead.”
Poe previously worked as a business manager for Roanoke Regional Airport and as an economic development specialist for Downtown Roanoke Inc. She also worked in real estate and property management.
“Dani is the experienced leader needed at a critical juncture in Franklin County’s progress,” Franklin County Administrator Christopher Whitlow said. “It was clear during the interview process that she understands the county’s value proposition and knows how to leverage the county’s advantages to create jobs and investment, develop its workforce and continue to enhance livability.”
Poe is the 2024 chair of Leadership Roanoke Valley and graduated from Radford University, where she studied sports and fitness administration and management, according to her LinkedIn page. Next month, Poe will graduate from the University of Oklahoma’s Economic Development Institute program.
Located about 10 miles south of Roanoke, Franklin County was estimated to have 55,549 residents as of 2023, according to the U.S. Census.
Port of Va. is already handling cargo diverted from Baltimore
On Tuesday afternoon, workers at the Port of Virginia’s Virginia International Gateway facility in Portsmouth unloaded cargo that had been scheduled for the Baltimore Harbor before a container ship struck and destroyed the Francis Scott Key Bridge in a fatal accident that has left the shipping channel closed for at least several weeks to come.
“The ship was already in Virginia for a normally scheduled port of call and was headed to [Baltimore] afterward,” Port of Virginia spokesperson Joe Harris said in a statement to Virginia Business. “The accident happened, [and] the [Baltimore] cargo was offloaded here.”
The port expects these diverted volumes of cargo to increase. “It is, however, too early to discuss specific impacts to our operation,” Harris said.
Speaking to press during a bill-signing ceremony Tuesday, Virginia Gov. Glenn Youngkin pledged to assist Maryland during the disaster with everything from additional port capacity to emergency search and rescue services, saying the “entire commonwealth’s capabilities are at the ready.”
If assistance is requested, Virginia emergency resources available to Maryland include the Virginia State Police, the Virginia Department of Emergency Management and the Virginia Department of Fire Programs, according to a spokesperson for the governor.
On Wednesday afternoon, rescue workers recovered the bodies of two of six road construction workers killed in the accident in which the Singapore-flagged container ship Dali collided with the Key Bridge around 1:29 a.m. Tuesday, shortly after the ship lost power and its pilots issued a mayday call. National Transportation Safety Board investigators and other federal officials continued looking into the cause of the crash Wednesday, as the Biden administration pledged federal support to rebuild the bridge, calling on Congress to authorize hundreds of millions in funding likely needed for the bridge’s replacement, an undertaking that could take at least a year.
In the aftermath of the bridge collapse, supply chain experts warned it could have a major ripple effect on East Coast trade for some time to come, though at least one major shipping executive was optimistic that the Port of Baltimore could reopen sometime in May.
It’s unclear, Harris said, how many additional vessels and what volume of cargo the Port of Virginia will ultimately see, especially since no one knows how long the Port of Baltimore will remain closed to all ship traffic. All vessel traffic in and out of Baltimore’s port has been suspended until further notice, Maryland’s transportation secretary announced Tuesday morning.
Ocean carriers will decide how Baltimore-bound imports and exports will be diverted to other ports, Harris said, adding that ships presently in transit with cargo bound for Baltimore will likely unload in the ports of Virginia, Philadelphia, or New York and New Jersey.
“Our effort today is continuing to communicate with the ocean carriers and cargo owners to let them know that we have ample capacity to handle additional cargo and vessels,” he said.
The increased traffic won’t impact the Port of Virginia’s service levels, according to Harris. “This is a modern, 21st century port that has a significant amount of experience in handling surges of import and export cargo.”
Virginia Business Editor Richard Foster contributed to this story.
Editor’s note: An earlier version of this article listed an incorrect summary of cargo diverted to the Port of Virginia and an incorrect estimate for the replacement cost of the Key Bridge. The story has been corrected and updated.
Washington Wizards, Capitals reach deal to stay in D.C.
The Washington Wizards and Capitals NBA and NHL teams are staying put in the District of Columbia and will not be moving to Alexandria, according to announcements from Washington, D.C., and Virginia officials Wednesday. These events put the final nail in the coffin of a controversial $2 billion Alexandria arena proposal touted by Virginia Gov. Glenn Youngkin.
“We’re going to be together for a long time,” Washington, D.C., Mayor Muriel Bowser said at a news conference Wednesday evening, joined by Monumental Sports & Entertainment CEO Ted Leonsis.
Bowser said that she and Leonsis had just signed an agreement to keep the teams in Washington through 2050, in exchange for D.C.’s pledge to pay $515 million over the next three years to upgrade and modernize Capital One Arena in downtown D.C.
According to Leonsis, he and Bowser continued discussions regularly after his and Youngkin’s December 2023 announcement of the proposal to create a $2 billion arena and entertainment district in Alexandria — a nonbinding deal that was opposed by some Virginia Democratic lawmakers and Alexandria residents.
Youngkin, whose efforts to build the arena were blocked by Virginia State Senate Democrats during the General Assembly session, said in a statement Wednesday afternoon that “personal and political agendas drove away a deal with no upfront general fund money and no tax increases, that [would have] created tens of thousands of new jobs and billions in revenue for Virginia.”
He also referred to the possibility of 30,000 new jobs and $12 billion in economic activity that the deal could have brought to the state, which “just went up in smoke,” according to the statement.
“This should have been our deal and our opportunity,” the governor continued. “All the General Assembly had to do was say, ‘Thank you, Monumental, for wanting to come to Virginia and create $12 billion of economic investment. Let’s work it out.'”
The proposed sports arena and entertainment district faced significant pushback from state Sen. Louise Lucas, the powerful chair of the Senate Finance & Appropriations Committee, who prevented the Virginia State Senate from voting on a measure to create a state authority that would control the project’s approximate $1.3 billion in public funding.
Answering a reporter’s question about what had happened with the Virginia negotiations and opposition among state lawmakers, Leonsis didn’t speak specifically about the state Senate’s roadblocks or any other missteps among state officials.
But D.C. officials “did everything right from December on. And when I looked at the other side of the board,” Leonsis said, referring to Virginia, “some of them weren’t scoring as high, and they weren’t together.
“We are an incredibly valuable company,” he added. “Forbes just said we’re worth $6 billion. That would make us one of the 10 most valuable companies in Virginia, one of the 10 most valuable companies in Washington, D.C., [and] we should be treated with that kind of respect. The city [of Washington] treated us that way. And that really was what the game changer for us.”
Leonsis said at the news conference that he would talk about Virginia at a later time, but he complimented Youngkin as “a good man,” who was aware of his ongoing negotiations with Bowser.
At the news conference, held Wednesday evening at Capital One Arena, Leonsis said that in recent months, he and Bowser met nearly weekly on the “main couch in the lobby at the Waldorf, and I would jump up and run to the bar and get some drinks, and we would talk about what’s the vision for the city.”
The option of more space
Another key factor in D.C.’s negotiations with Monumental was the recent closure of a shopping mall near the current arena. Washington, D.C., officials and the mall’s owner offered to let Monumental expand into about 200,000 square feet of that space, Leonsis said. The 12 acres on the Potomac River, where the arena would have been part of 9 million square feet of new multiuse buildings, was part of that proposal’s appeal, he added.
Lucas opposed the amount of public spending on the arena — saying that schools and toll relief should be higher priorities for the state — and tweeted Wednesday afternoon, “As Monumental announces today they are staying in Washington, D.C., we are celebrating in Virginia that we avoided the Monumental Disaster! Thank you to everyone who stood with us in this fight!”
Other Virginia Democrats took Lucas’ side in the battle, and some were put off by the governor’s apparent lack of interest in compromising on their party’s priorities, including a $15/hour minimum wage starting in 2026 and setting up a recreational cannabis retail structure in the state.
Matt Kelly, CEO of Bethesda, Maryland-based developer JBG Smith, which would have developed the entertainment district, released a statement Wednesday, blaming the project’s failure on “partisan politics and, most troubling, the influence of special interests and potential pay-to-play influences within the Virginia legislature.
“The scheming and special interests that plagued this opportunity in the Virginia legislature will no doubt cause future employers and the next Monumental to question whether their opportunity will get a fair hearing,” Kelly’s statement continued.
“This opportunity also brought with it the potential to add tens of thousands of jobs and needed housing units, including 1,000 units of affordable housing preservation in Alexandria which we had pledged as part of the arena proposal. Traffic and transportation investments, including possible Metro funding, are also likely gone. Instead, the existing surface-parked, single-story shopping center on the site will remain through the remaining 20-year term of the Target lease, and development on the remaining land will likely be far less dense. To say we are disappointed is an understatement; we are disgusted with the backroom-dealing and opaque scheming that took place as this played out.”
Last week, JBG Smith pledged to double the number of preserved workforce-priced affordable residential units near the complex from 500 residences to 1,000, an attempt to save the deal, and previously, the governor put forward a $322 million Hampton Roads toll relief proposal, a priority for Lucas.
In February, George Mason University’s Center for Regional Analysis found in a study requested by JBG Smith Properties that the project would include the construction of 5,405 workforce-affordable housing units, more than twice the 2,250 affordable housing units the City of Alexandria aims to have by 2030.
The Democratic-controlled House of Delegates passed the authority legislation in a bipartisan vote during the General Assembly’s regular session, but the bill faced a roadblock in the Senate. Some Alexandria residents also opposed the project over costs, traffic and infrastructure stress.
Big numbers touted
In December 2023, Youngkin and Leonsis, with Mayor Wilson on hand, announced the 9 million-square-foot entertainment campus project as close to a done deal, saying it could create up to 30,000 jobs for Virginia over several decades. With a 2025 groundbreaking, the arena was expected to be completed by 2028 on an accelerated construction schedule, and an economic and fiscal impact report conducted for the city anticipated up to $7.96 billion in annual economic output for the state if the arena was open by 2028.
However, in March, The Washington Post reported that a separate economic analysis commissioned by the Youngkin administration and not released publicly had assumed fans would pay $75 for parking and that a new luxury hotel would book rooms at $731 a night, with the state using parking fees, ticket taxes and other revenue in order to pay off $1.5 billion in debt.
Earlier this month, Bowser said the District’s offer to fast-track a $500 million deal to update the teams’ current arena and keep them in Washington, D.C., was still on the table, after Virginia legislators omitted the authority wording from their budget amendments — a decision Youngkin called a “colossal mistake.”
“As stewards of the city’s economic health and development, city leaders believed the Potomac Yard entertainment district opportunity was worthy of community discussion and [city council] consideration,” Wilson said in a statement Wednesday. “We negotiated a framework for this opportunity in good faith and participated in the process in Richmond in a way that preserved our integrity. We trusted this process and are disappointed in what occurred between the governor and General Assembly.”
The 2024-26 state budget negotiations between state lawmakers and Youngkin remained the final avenue to create the state authority by including it in the finalized budget in April, but Wednesday’s events closed the door entirely on the proposed arena move.