Tom Sherwood: The Death of the Arena Deal
Political analyst and WAMU's Politics Hour Analyst Tom Sherwood joins Michael to discuss yesterday's breaking news--Monumental's Ted Leonsis announces they've abandoned their efforts to move their arena to Virginia. How did this happen, and what does it mean for the relationship between Governor Youngkin and the Democratic leadership in the General Assembly?
Episode Transcript
Michael Pope
I'm Michael Pope. And this is Pod Virginia, a podcast that isn't hiring Ronna McDaniel to be a contributor. Hey, we've got breaking news. The arena proposal is dead. And we've got the best guest here today to help us understand what happened. You may have read him in the Washington Post and seen him on NBC 4 in the Washington, DC, area. You probably have heard him on WAMU the Politics Hour with Kojo Nnamdi. Coming onto Pod Virginia for his first, of I hope many appearances, Tom Sherwood. Thanks for joining us.
Tom Sherwood
Hello, everybody.
Michael Pope
You have been following this story as it unfolded. It's now dead because the city of Alexandria pulled out of the deal, which totally imploded this week. Tom Sherwood, what happened?
Tom Sherwood
Well, ever since this deal between Ted Leonsis, Monumental Sports, and Governor Youngkin was announced on December 13th. It's been on a downward trajectory. There were immediate complaints from the citizens of Alexandria about what was going to be built and what it was going to cause. What the exposure to Alexandria was. What traffic was going to be trying to get to this new Potomac Yard arena? Meanwhile, it turned out very quickly that Governor Glenn Youngkin, in Richmond, had not done the groundwork, the advanced work, the important political work, to vet this deal with the people in the General Assembly who can make this happen or not. In particular, he didn't reach out in any significant way to Virginia State Senator Louise Lucas, who chairs the Finance Committee. She's from Portsmouth, and she looked at the deal. She looked at the way it was handled. And she said, not on my watch.
Michael Pope
Yeah, Senate Finance and Appropriations Chairwoman Luis Lucas was a hard No from day one. One thing I thought was strange during the General Assembly session was that it kind of seemed like people were living in a state of denial. They felt like Louise Lucas didn't matter or didn't care; no one cared what she had to say about it. And yet, she had the power to totally kill this thing by literally not putting it on the agenda. One thing that's important to think about is that the House actually voted. All the House members are on record in terms of whether or not they support it or oppose it. The Senate never debated it because Louise Lucas didn't put it on the agenda for them to talk about. So they didn't vote on it. They didn't even talk about it. Louise Lucas really killed this from a process point of view. I'm kind of curious, and Tom, I'd love to get your perspective on this. What changed? What developments this week or the following week changed the dynamics? Louise Lucas is in the same position today as she was in January.
Tom Sherwood
Well, even those House members who initially supported this deal, some of them said they think it's a good idea. Let's pursue it. Let's get some details. Let's not kill it at birth. Let's see what's going to happen. So they voted for it. But even some of those members in the House were lukewarm to the idea, as to answer your question. As more details came out about how much money it would cost. What the bonding would be. How Ted Leonsis would be able to have the arena. I have access to the performance place next door, where Alexandria would build just all kinds of things. It just seemed like too much money to commit the state to putting up bonds for more than a billion and a half dollars. The opposition about where it was and how the deal was done was just stuck in people's throats. I think about this politically as I work on the Politics Hour at WAMU. But honestly, everyone, I spoke to people for the arena and against it. So this was a classic example of how Governor Glenn Youngkin, who's a one-term governor and can't run for reelection, failed. Failed to understand the legislature. He thought he could just say this was a good deal, and everybody's gonna support it. He did have a feather in his cap. In fact, Senator Louise Lucas was the loudest person on social media and elsewhere, complaining about the deal. But ever since it was announced, I've heard a lot of people turn against it. I haven't heard anybody say, Oh, I was against it, but now I'm for it.
Michael Pope
That's a good point. It was difficult to find supporters for this thing. If you think about this as a journalist, you will endeavor to get both sides of an issue. But it was very difficult to find people who were in support of it. Even people who voted in favor of it won't say things similar to what you said earlier; I'm in favor of this process moving forward, even if I'm not really totally sold on the merits of the issue, and that sort of thing.
Tom Sherwood
I'm going to use the word that everyone used with me. The arrogance of Glenn Youngkin, who did not recognize last November, caused the General Assembly to become controlled by the Democrats. And when he went out and complained about the Democrats, some people said, Oh, well, Louise Lucas is just holding up this deal so she can get her pet project passed, like medical marijuana, minimum wage, and money for tunnels in the Portsmouth area. She was offended by that. She tweeted about it, and she said, quote, I want those things, yes, I want those things. But I'm not taking bribes and allowing that stadium to be built, unquote. And she was insulted. She seemed to be insulted the whole time. Ted Leonsis never really reached out to her until after the deal was virtually dead. The Governor has never shown any idea that he knows how to wheel and deal in a legislature. The legislators aren't some group of people or board members he can boss around, like the CEO of a corporation. They had their own votes; they had their own issues. And he just seemed to be willfully blind to all of it.
Michael Pope
Totally willfully blind to all of it. I also think he was handicapped a little bit by the fact that this was the first session where Louis Lucas had this new position of power. You didn't really know how she was going to act in that role.
Tom Sherwood
That's a nice way to say it. But the lessons were in November. In November, we knew that she was going to be chair of the Senate Finance Committee, one of the most powerful positions you could have in the Virginia General Assembly. The Governor's office and the Monumental people ignored her.
Michael Pope
Did nothing but insult her and ignore her.
Tom Sherwood
They ignored her. At one point, she was quoted saying, I'm just this little old Black woman in Southside Virginia. No one has to pay any attention to me. She was mocking how they just ignored her. And it's not that this was a great deal for the Commonwealth of Virginia. And she was against it because she was insulted. She was insulted, and she thought it was a bad deal. That's a double whammy for Virginia.
Michael Pope
I'm curious about what happened in DC after Alexandria's announcement. So the chain reaction here started at 4 PM. On Wednesday, the city of Alexandria announced it was ending negotiations for the Potomac Yard entertainment district, and the proposal will not move forward. That's what happened on our side of the Potomac. Tom Sherwood, what happened after that in DC?
Tom Sherwood
I have to laugh a little bit. Alexandria announced they were ending negotiations on something already dead. But I'll leave that on your side of the river. In the District, I went to the press conference, where Ted Leonsis stood with the Mayor and some council members, and I asked Ted Leonsis, when did you and the Mayor come to an agreement on this? Because you've been in Virginia, promoting this in Virginia. And he gave this incredible story. He said that he and the Mayor had been meeting, but he wouldn't say for how long. It sounded like weeks, maybe months. They had been meeting privately at the Waldorf Astoria Hotel in downtown Washington, privately discussing how the city could get the team back in the District. As soon as he finished talking, I asked the first question at the press conference; I said Mr. Leonsis, you had been publicly promoting your position about how you want to go to Alexandria and how good that deal is, and you were trying to persuade people to be for it. Now you're telling us you were meeting privately with the Mayor? All this time working out a deal in Virginia? Did Governor Youngkin know that you were playing both sides of the street? And Mr. Leonsis basically said, Well, he knew I was a businessman, and we hadn't signed anything in Richmond. So, I did not get a clear answer that Governor Youngkin knew this sidecar negotiation with Mayor Bowser was going on. And so it had gone on so far that when the Virginia deal fell apart, they were ready to announce their new deal in DC. It was very odd. I'm just thinking if I were Governor Youngkin after all I put out to get this arena built in Alexandria. Why the hell did Ted Leonsis spend time working on a deal to stay in the District? To me, that sounds like bad politics.
Michael Pope
Was the whole thing a ruse all along? Did Ted, a multimillionaire, use people for his own purposes?
Tom Sherwood
No. He thought he saw an opportunity in Alexandria. He was very upset at the lackadaisical approach the city had to reaching a new deal. He wanted more land than just the arena. He was extremely worried about crime in downtown DC, which has been bad, and it's been bad around the arena. And the Mayor has said she will be doing something about it. But he was just frustrated on a variety of levels. And the Virginia deal came along. And he thought it was a good one. This was not a ruse, where he was saying, Oh, I'll go play footsie with Virginia and get a better deal in the District. It happened, but he did not set out. To do that. It turned out that way. But that was not the plan. Also, basically, he'd been turned down in Maryland. I can't go into the details. But I know that Ted Leonsis, a Monumental sports person, didn't see a path to going to suburban Maryland. Their deal in Virginia was dead. So he only had one choice: either come back to DC or sell. Well, I guess there were two choices. Or sell the team, and of course, at this point, he doesn't want to sell the teams.
Michael Pope
Now we're in the stage of repercussions for the fact that the arena deal is dead. I want to take a look at the statement from the city of Alexandria. And fact-check it. The announcement from the city that came at 4PM on Wednesday has this nugget here; we negotiated a framework for this opportunity in good faith and participated in the process in Richmond in a way that preserved our integrity. Okay, fact check. I'm not really sure that's true. I think they lost a lot of integrity, especially with the lack of transparency. Tom Sherwood, I don't know if you had the same problem getting people to go on the record and getting people to give you documents that they should give you. Regarding the issue with the 30,000 jobs, they're constantly talking about the 30,000 jobs, even in the Governor's statement, talking about the end of this deal. The second sentence refers to 30,000 jobs. Well, they never at any point substantiated that with anything. I tried to get the people in economic development to answer questions. Still, they waited 54 days before they handed over a one-page document. They wouldn't tell you anything about the one-page document or even the date it was produced. There was stonewalling and a lack of transparency. The city has deluded itself into thinking that it preserves its integrity, but I think it lost a lot of integrity in this process.
Tom Sherwood
I think when you're at that level when you're negotiating a massive deal like that, it's understandable from a city's point of view and the Commonwealth's point of view that you don't want to blurt things out early.
Michael Pope
However, the problem is that they want public financing. They kept saying it's a private deal; we can't share that. But if there is public financing, I think they're probably gonna have to share some details.
Tom Sherwood
You're ahead of the game; I'm at the start. Their negotiations in private, up until the time they announced it, made sense. Because you don't want to announce a deal and then have people pot-shotting it. They made a mistake by not telling people like Louise Lucas. To publicly announce it and let it out before they were done would've just created headaches for them. So they got the deal in place. And you're right, once that was announced, and all the glad-handing with the Big 10 at Potomac Yard. And it's going to be a great thing, Hallelujah. They would not give out the details they just mentioned. Exactly how will these jobs work? What will be the tax consequences? These are all the questions that Alexandra's citizens started asking right away. Some of the council members were even willing to go forward with this deal. Mayor Justin Wilson said a couple of times that there are a lot of details to be worked out, even though he was on the stage promoting it. Alexandria didn't preserve its reputation. The people of Alexandria certainly did keep asking for details, and some of the state Delegates and some of the state senators, Adam Ebbin, said I want to know more about this. As powerful as he was in the legislature, Adam Ebbin wasn't getting all the information he thought he needed to have.
Michael Pope
Complete failure. Failure of transparency, in terms of the public, press, and even elected leaders. They needed their votes, yet they weren't willing to be transparent with those people.
Tom Sherwood
It goes back to the fundamental issue, the administration, not just Governor Youngkin himself. No one in the Youngkin administration has the authority or guts to go to the Governor and say, you're acting like a rich, old guy who just gets his way because he has a lot of money. And that's not the ballgame; you're playing on it. Maybe someone in his administration said that to him. I don't know. But he certainly acted like it was his toy, and he was going to play with it. He was inviting everybody else to play with his toy the way he wanted them to play with it. It was politically dense. Dense is the word. He did not play correctly. If he had done everything right, it's possible this deal would have gone through. I go back since December 13th; name one person who had been skeptical of the deal but then decided they were for it. I don't believe one person did that.
Michael Pope
I certainly can't think of anybody. We talked about the repercussions for Alexandria. Clearly, it lost integrity in this process; let's talk about it.
Tom Sherwood
I don't want to agree that Alexandria lost its integrity.
Michael Pope
It has not totally lost its integrity, but in their statement, it just struck me that they use the word integrity in this context. Here's the sentence again, "we (the city) negotiated a framework for this opportunity in good faith and participated in a process in Richmond in a way that preserved our integrity." I'm not sure that's true.
Tom Sherwood
They could have done all the negotiations with the grandest integrity, but I don't want to dwell on this. I wouldn't say the council members and Mayor lacked integrity. I think they didn't have the political skills to make more of this public and get people on their side. I don't know if that's a question of integrity, but if they want to use that word, it's okay with me.
Michael Pope
Let's talk about the ramifications. I'm curious to get your read on the ramifications for the Governor. What are the ramifications for Louise Lucas? What are the ramifications for the city of Alexandria? It's an election year in Alexandria. The Mayor and all six members of the City Council are on the ballot.
Tom Sherwood
But the Mayor isn't running.
Michael Pope
Yes, the Mayor isn't running. It's an open seat. There are two or maybe three candidates, one of which is Vice Mayor Amy Jackson. She's already come out against the proposal. I thought it was interesting that the other leading candidate to be the Mayor of Alexandria is Councilwoman Alyia Gaskins. Interestingly, the same day, about two hours before the city made this announcement, they were pulling out of the negotiations; Alyia Gaskins released a statement saying at this point, I cannot answer the question with a simple yes or no. In advance of the city's decision to pull out of the negotiations, one candidate was against it, and the other couldn't answer the question. Is that a problem for this Democratic primary?
Tom Sherwood
I think if you're going to waffle, you should be in a Waffle House, serving waffles; she should not waffle on major issues like this. It sounds like the other candidate, not Amy, but the other candidate, didn't take a position; that's called waffling. And that's not a good way to run a campaign, in my view. I don't know all the details, but that sounds like waffling to me. Again, you should be in a Waffle House when you're eating waffles. But you asked the question for the Governor. This is another bad thing for him. Let's not forget Virginia lost the fight over the FBI headquarters while he was Governor. Well, you can blame him or not because a lot of that predated him. But he lost that fight to Maryland; they got the FBI headquarters. Now, the Virginia/DC fight over the Wizards and Caps. He's lost that. In sports terminology, he's 0-2; he's not doing well. Louise Lucas is now well known, unlike before, she wasn't that well known. However, she is now known in the metropolitan Washington area as a strong person. She's a big winner in this.
Michael Pope
But there's a lot more to that story. We're still in the process of the Governor making announcements on the bills that he wants to sign, veto, or amend. And she's got a lot of legislation on the table, including very important bills, such as skill games. She is one of the leading proponents of having these machines in convenience stores and truck stops. Some people call them skill games; others call them gambling machines. The Governor might not be happy with Louise Lucas and might put a veto on that.
Tom Sherwood
This is another example of how the Governor hasn't tried to reach across the aisle in any way to get Democrats to support his deal. He's just complained about them. Louise Lucas's is on the public record, saying if the Governor vetoes every bill, she's for those you mentioned and others you didn't. She says, Well, I won't like that. But I'll just reintroduce them again in January during the next session of the legislature. And he'll still be there. And if he's still mad about the arena, he might veto them again. But in 2026, he'll be gone. So she's taking the long view on this. While she had short-term losses, he vetoed her bills. In the long term, she showed the entire General Assembly that she was going to be involved. You can't leave her out. Whoever the next Governor is, Democrat or Republican, will not treat Louise Lucas shabbily. She wins, even if she loses some of her legislation. The city of Alexandria is back to the drawing board about what to do. It needs more development than residential property taxes. So that's a big issue. And then DC wins because they have a whole big plan, which hasn't even been that publicly discussed. It's not going to be pretty up the arena. Several blocks around the arena in downtown Washington are going to be redeveloped. Ted Leonsis wanted more land, and he's going to get space for a practice facility and more space he may own himself for his business. It's going to be an entire entertainment district in downtown DC, with the arena as the anchor. There's a Shakespeare Theater right across the street. There are a couple of other theaters a few blocks away. It's going to be a whole new entertainment district. The Mayor today, with Ted Leonsis, said there's going to be more focus on crime. The fear of crime is off the charts. So the city's going to address that and several other things to make the arena better than it's been.
Michael Pope
Turning your attention back to Alexandria for a second. Alexandria doesn't have this particular entertainment district where you subsidize a billionaire. However, that doesn't preclude the city from putting an entertainment district here anyway. They still have the power to do that, even without subsidizing the rich guy.
Tom Sherwood
It depends on what that will be. I shop at that Target. Not very often, but I've been there. I've driven along the Potomac there. And I've looked at the land, and it's a tremendous space. Just as Ted Leonsis said at the announcement on December 13th, this is a tremendous opportunity. What is it, 70 acres total, or something like that? I've forgotten how many acres are left with the Virginia Tech now being there. Amazon is up the street in Arlington, which can be a tremendous development. What we learned from all of this is that no matter if you're the Governor, chair of a big committee, or House Speaker, legislatures and elected officials have to work together to get things done, or they just blow up.
Michael Pope
That is definitely a lesson I think everybody should learn. One of the things that's happened over and over again is these people trash-talking their opponent in public. You had the Governor, at one point, say Louise Lucas wants a pot shop on every street corner and a casino in every convenience store. Is that a way to win over friends and allies?
Tom Sherwood
That is the most fundamental mistake in Politics 101. Louise Lucas tweeted out after the announcement that we avoided a monumental disaster. And now the question is, Can Governor Youngkin get his budget passed through the veto session with the arena off the table now? Is the budget impasse everyone's talked about going to happen? Or is the budget going to limp to a conclusion in April? What do I personally think? I'm a fan of sports; I live in the District of Columbia. I like the fact the teams are in the city. I think the football team can come back to RFK if a deal can be worked out, which is good for the city and not just for the team. Overall, I want the Washington metropolitan region to be successful. And we've got all kinds of issues going on. If Ted Leonsis had been successful, I would have been in Alexandria for the opening of the arena. Because I'm interested as a political reporter and the politics of this and not taking any personal point of view.
Michael Pope
Alright, one last question about the politics. We talked about the ramifications for the Governor, Louise Lucas, for the electeds, and even the mayoral and city council races in Alexandria. One more ramification I want to ask you about. Incumbent mayor of Alexandria, Justin Wilson, who's not running for reelection, has had his two terms. He is going to step off of the public stage. He tells me he's not going to run for Congress. His time in elected office is probably over for now. What do we think about him? He was such a strong cheerleader for this. It does feel like he's ending his term on a sour note. What does this mean for Justin Wilson's legacy?
Tom Sherwood
For his legacy, he went out on a limb for this arena, and he didn't get it. So that's not a good thing. And should there be an open congressional, there's no open congressional seat now. Congressman Don Beyer is running for reelection. If Don Beyer had decided not to run again, maybe that's something Justin Wilson would have looked at. But I think Justin Wilson did his job as Mayor, and he will defend his behavior in trying to get a major economic development in Potomac Yard. It didn't work. So we'll see what's next for him. He may not be back in politics for a while. We'll see what happens; it depends on what happens with Don Beyer. In politics, the record keeps spinning.
Michael Pope
The record keeps spinning—you got that right. You have been listening to a voice that's probably familiar to you because you've heard it on WAMU, the NPR station in Washington, DC. He's been a regular for 15 years on the Politics Hour with Kojo Nnamdi, and he's joining us for the first time on Pod Virginia. Tom Sherwood, thanks for joining us.
Tom Sherwood
Thank you for having me, and best wishes to everyone.
