Potomac Yard Arena Funding Likely Out Of Virginia Budget

ALEXANDRIA, VA — The first step to bring a Washington Capitals and Wizards arena to Alexandria's Potomac Yard is in limbo as state lawmakers did not include the arena financing in the negotiated state budget.

Virginia House and Senate lawmakers have been meeting to negotiate differences between the House and Senate versions of the state budget. The House's budget included the plan to create a Virginia Sports and Entertainment Authority and provide over $1.4 billion in bond financing. The Senate version of the budget left out the arena legislation.

State Sen. Louise Lucas (D-Portsmouth), the chair of the Senate Finance and Appropriations Committee, told the Washington Post that the arena deal wouldn't be in the budget compromise lawmakers will present Thursday. Lucas has been a key opponent of the arena project, questioning the public financing support for a private economic development project.

House Speaker Don Scott (D-Portsmouth) told the Post "it’s not final until it’s final." Democrats have also sought priorities like toll relief in the Hampton Roads region and establishing a recreational marijuana sales market. Lucas also added Metro funding in the Senate budget, which Northern Virginia lawmakers have been seeking to support an arena project.

In remarks Thursday afternoon, Virginia Gov. Glenn Youngkin said the Senate was making a "colossal mistake" not including the arena in the state budget. He cited tens of thousands in new jobs as well as new state revenues anticipated from the arena and entertainment district.

"I have shown an absolute repeated willingness to consider many priorities of the General Assembly," said Youngkin. "On the very first day of the session, I was clear that I was open to total relief for the residents of Hampton Roads and particularly Portsmouth and Norfolk. I worked hard with Metro leadership on a business plan that would allow us to support Metro through their short-term cash crunch. Our team has worked tirelessly with Democrat legislators to amend bills throughout the session to find common ground."

Youngkin praised the Democratic House speaker for taking the time to analyze the project and debating it. However, the governor said the Senate "refused to give the single largest economic development deal in Virginia's history any serious meaningful consideration."

Unless the arena project is included in the compromised budget, Youngkin would have to propose it in a budget amendment or separate bill. The Virginia General Assembly is scheduled to adjourn on Saturday and will reconvene on April 17 to consider the governor's budget amendments and vetoes. Youngkin could also seek a special session.

The Coalition to Stop the Arena at Potomac Yard said it supported Virginia General Assembly's budget decision.

"We urge the Governor to heed the bipartisan voices urging him to abandon this deal and not needlessly prolong his efforts into the veto session in April," the coalition said. "There are many more important priorities for the Commonwealth of Virginia."

The arena and entertainment project cannot move forward without Virginia General Assembly action. A Virginia Sports and Entertainment Authority, if approved by the Virginia General Assembly, would issue $1.05 billion in project revenue bonds and $416 million in lease revenue bonds for the arena and entertainment district. The project would also receive a $403 million contribution from Monumental Sports & Entertainment and $106 million from the City of Alexandria to build a performing arts venue in partnership with Monumental Sports & Entertainment and related underground parking.