How Ted Leonsis, Muriel Bowser made most of second chance to keep Wizards, Capitals in D.C.

The Mayor and The Owner took The Mulligan.

An $815 million mulligan.

The District of Columbia, to be sure, could spend $515 million of taxpayer money on more important things. But just because sports are a distraction from real life doesn’t mean they have no value. They matter, greatly. To our mental health. To our pride in where we come from, and what (we hope) we represent. To the memories of a night at a game, or at a Zach Bryan or Bad Bunny concert, create for families and friends. Those things aren’t everything, but they’re not nothing, either — especially coming out of COVID and in a time when so many of us immediately share our memories for the world to see.

In the end, Washington D.C. Mayor Muriel Bowser and Monumental Sports & Entertainment CEO Ted Leonsis were able, with each other’s help, to save face. After appearing to have lost two of the city’s most important pro sports franchises, Bowser kept the teams and the downtown economic engine of a busy Capital One Arena in place.

And Leonsis was able to extricate himself from an increasingly disastrous dalliance with Virginia, after proclaiming with great fanfare in early December that he was moving the Wizards and Capitals and his whole operation to the Potomac Yard site in Alexandria, in a $2 billion arena/entertainment district project partnered with Virginia Gov. Glenn Youngkin.

The die, apparently, was not cast. Nor was it as “Monumental (an) Opportunity” as Leonsis claimed.

So, how did D.C. change the calculus? I mean, besides the $515 million?

“It’s like saying ‘How do you fall in love?’” Leonsis said Monday morning.

“Very infrequently is it love at first sight. It’s an accumulation of things. What I find is that the mayor and city council did the work. And they must have done a psychological profile on me. I’d like to be loved.

“And the mayor was nice, at a time where Virginia, or parts of Virginia, was not being nice and was not doing the work. They never were drilling down on our plans, our financials. And that’s what I meant when I said this became about politics, not business.”

There could be books written about the missteps in the Commonwealth on this one. How do you announce a $2 billion deal without having secured the yes vote of one of the most important players in the process — the incoming chairwoman of the Virginia Legislature’s Senate Finance and Appropriations Committee? How do you allow such a huge project to come to the Legislature without knowing whether it would pass or how to get recalcitrant members from no to yes?

Didn’t any of y’all see Hamilton?

The new deal aligns the initial $500 million the city offered Leonsis in December to renovate Capital One, in what at the time seemed like a way-too-little-too-late package, along with an additional $15 million to open up a city-owned alleyway connecting the arena to the Gallery Place Mall. Leonsis will commit $300 million toward the renovation, adding to the $200 million or so he’s already put into sprucing up the nearly 27-year-old building.

On Tuesday, the Washington D.C. City Council passed the bill authorizing the overall spending plan, but specific details between the city and Monumental will be worked out in the coming weeks.

Monumental will, essentially, gain control of the 200,000 square feet of mall space, allowing it move assorted physical items that currently take up space in the back of the house of Capital One Arena (COA) into Gallery Place. That will open up room in the back of the arena to expand and enhance the existing locker rooms for the Wizards and Capitals, along with the weight rooms and the visiting team locker rooms.

And the mall space could, potentially, serve as a site for a new Wizards practice facility, a much-needed improvement for the rebuilding franchise. (Leonsis points to how the Capitals built their practice facility on the top floor of a parking garage next to Ballston Common in Arlington as a potential vertical solution for a Wizards practice at Gallery Place.)

“One thing we can say about Ted, and I’ve said throughout, is that he treats that place like his house, like his home,” Bowser said via phone last Friday. “He wants it to be nice. He’s invested in it. He’s concerned about safety and cleanliness, like anyone would be about their home.”

Serendipity provided the first tentative step toward bringing the Wizards and Capitals back to D.C. — a chance meeting between Bowser and Leonsis in January, a few weeks after Leonsis announced he was moving across the river.

“We were at the Waldorf (Astoria),” Bowser said. “I was there for a meeting. He was there for another conference. I was meeting with someone unrelated. I looked up, and there he was. He was walking across the lobby. And I said to the person I was meeting with, ‘I hate to do this, but I have to excuse myself.’”

Bowser had been beyond disappointed that Leonsis had decided to leave the city. But she wasn’t angry with him personally. Leonsis, though, didn’t know what reaction he’d get from the mayor. It was important to him that it wasn’t an acrimonious one.

It wasn’t.

“We hugged,” Leonsis said. “Said ‘Hey, what’s going on?’ We sat down on a couch, and we chatted. Then, when we would set up the other meetings, I said ‘Let’s keep going back there. We’ll make it our place. Let’s see how long before people notice.’ We were hiding in plain sight.”

The initial conversation was just 15 or 20 minutes. But Leonsis and Bowser agreed to have future meetings and to talk directly to each other.

“Nobody as a buffer, nobody translating for either of us,” Bowser said.

Their discussions, first conceptual, began to take real form over the winter weeks as Bowser and the city brought changes online that Leonsis had sought before starting up with Virginia. A police and social services “hub” opened in Chinatown in February. Later that month, the city unveiled a $400 million “Downtown Action Plan,” which proposes investing significantly in both the downtown and “Golden Triangle” Business Improvement Districts (BIDs). In early March, the City Council passed a sweeping crime bill that set up “Drug Free Zones” throughout downtown — including at the COA site.

For Leonsis, who had decried both small drug deals that took place around COA and the presence of buskers playing in front of the building on game nights, the policy shifts made the District a more intriguing offramp as the Virginia deal stumbled through the state Legislature.

“When the mayor published the downtown D.C. paper, she sent it me,” Leonsis said. “And I do the work. And I read every word of it. I sent it to all of my people and said, ‘We weren’t involved with this. You should read it. There’s some good work in here. You should read it.’ And when the crime bill was passed, we read it. This matters to us. This is a marked difference in sentiment.

“And then the mayor said, ‘I now understand the concept and sentiment about the buskers. That it’s not about live music. It’s not about open air drug markets.’ It’s similar to all the kids running and jumping over the Metro, and the lawlessness that that represents to businesspeople, and tourists that are standing in line and buying their fare cards to get in.”

(I’ll never get the preoccupation with the buskers. Ever. Ever.)

Said Bowser: “My discussions with Ted were more about strategy and vision for the future. It really wasn’t about business terms at all. In those informal conversations, I appreciated what was kind of missing from our (initial) offer. And that was, what’s the vision he needs to see, to have his company and his teams in downtown Washington. We obviously had a lot of that work underway, but it culminated in the last several months, I would say. It took shape, I should say. It is important for both of us that we do what we say we’re going to do. I am, not just in this instance, but people know I mean what I say, and if I say I’m going to do something, I do it.”

Bowser insists she wasn’t whistling past the graveyard as she lobbied Leonsis on a potential deal. She knew it was important “to build a pathway back for Ted and Monumental. We knew there were some things that were important to them, and we went to work on those things.”

Bowser’s political antennae were raised, she says now, because Leonsis never signed an exclusive agreement with Virginia.

“I always believed we had a shot, because nothing was signed, and (the proposed Virginia deal) was shaky,” Bowser said. “And the more I learned, the more I realized how shaky it was. They really had nothing signed. … You asked questions about it, and nobody knew the details.

“I come to this discussion because I was on the (D.C. City) Council for eight years. So I’ve been in the Legislature. I chaired the economic development committee, so I dealt with a chief executive, did economic development deals. I know how it works. I just knew the kind of anatomy of this process seemed a little weak. That’s to one side. On our side, we had unanimous (Council) support. I’m biased. … We had the most interesting project. Anybody can go build a box. But can you transform or corner in the most important city in the world, to an incredible destination? That’s what takes vision and purpose. And so, that’s how I saw our city, period.

“There’s no place like us. We’re iconic.”

Leonsis didn’t sign anything with Virginia, he says now, because he was abiding by what Virginia lawmakers told him was the process for getting a deal of this magnitude done. He didn’t meet with Lucas face-to-face until mid-March. By then, the die was cast — in the opposite direction. Lucas stripped the arena proposal out of the 2024 state budget; in essence, not allowing it to even receive a vote in the Legislature, delivering a catastrophic blow to the plan.

“Do I regret I didn’t reach out to Louise sooner?” Leonsis said. “I don’t.

“There were a ton of meetings with the mayor of Alexandria, the city council, the governor, the head of economic development. They said, ‘This is the process. We have to, basically, develop a white paper. And there’s MEI (the state’s Major Employment and Investment Commission). We go and present.’ It was a closed session. I was told, ‘You are not invited. You can’t even see the (proposed) documents.’… A few days later, we get a phone call — MEI passed it, which means we can say in the light of day we reached a framework, a deal in principal. And now we get to work. We followed the direction. Later, I found out that Louise was very unhappy with the MEI process, that she felt she was going to play a major role in it. But the MEI process was before she was installed.”

Even as the project stalled, Leonsis says he was told it was still salvageable.

“My handshake agreement with the governor was, after MEI approved it, he said there’s never been a deal that MEI approved that hasn’t passed,” Leonsis said. “He said ‘I’m not going to make you sign an exclusive, but I would like fidelity with you. I’ll return the favor. When I see it’s getting harder, if you talk to other people, I would understand.’

“So when she didn’t put it in the budget, and I was having a conversation with them, he said, to be blunt, he was more concerned with Maryland than D.C., just because of the budgets. Maryland has the most successful Stadium Authority in the country.

The COA renovation will likely take up to four years, the summer months being the only time the arena can essentially be shut down for the amount of time needed to make the kinds of improvements Leonsis wants: wider corridors, bigger and better restrooms — and, of course, moving more seats into the lower bowl, where they can be sold at premium prices. Madison Square Garden and Wells Fargo Center have had similar facelifts to great effect in the last decade (though the 76ers, owned by a Mr. J. Harris, proprietor, are trying to move from South Philly to a new proposed arena near that city’s Chinatown area).

A reimagined COA and its surrounding footprint will have some of what Bowser wants for the city too. Greater access to locally owned nearby parking lots for COA employees and staff, and a dedicated rideshare space, should cut vehicular traffic around the building on event nights significantly. Potentially, side streets could be closed altogether to cars, allowing for more foot traffic and a plaza-like feel for big events.

“What is important to us is that the building communicate better with the street and surrounding experiences,” Bowser said. “I think, for us, we want to see it more open, more air and light. We want the pedestrian experience to be better. I think we have a mutual interest in it being more profitable. It’s a very profitable urban arena. … We expect, regardless of what happens with the building, we expect to use the public space in downtown for gatherings more. We can do that with or without this renovation.”

There remains as well the future of the Entertainment and Sports Arena, in Congress Heights, where the Mystics and the G League Capital City Go-Go currently play and practice. Public high school graduations will continue to occur there. But, as part of the deal between the city and Monumental, control of the building and its schedule will now revert from D.C. Events, which has run the building since its opening in 2018, to Monumental.

The Mystics will also continue to play most of their home schedule at the 4,000-seat ESA, but under the new agreement, Monumental can move up to four regular-season games, along with postseason games, from ESA to Capital One.

“And we would only do that if Caitlin (Clark) comes to town, if (the Las) Vegas (Aces) come to town, we’d do it,” Leonsis said. “And that what was so great about the spirit of partnership. It was based on rational behavior for the team and fan.”

OK. Speaking of rational, one thing I can’t get past is the idea that Leonsis didn’t, and doesn’t, understand why many people in the District and Maryland were so passionately opposed to having to go to Alexandria to watch the Wizards and Capitals. He’s not originally from D.C., but he went to Georgetown, and he’s lived in the area for most of his adult life. Surely, he has to know now that a small move physically would have been a gigantic move emotionally for many of his current patrons.

How does he not get that?

“I’ll take that (criticism) but kindly disagree,” Leonsis said. “I don’t need to litigate it. The only business magazine about Washington, the Washington Business Journal, is in Arlington. Washington National, Reagan Airport, is in Virginia. And the Caps were birthed and played their first 25 years in Maryland. And the Commanders play in Maryland.

“I get it. I took the Metro, I drove it (to Potomac Yard), and it was 4 1/2 miles away. I said, ‘Let’s drive to RFK. Let’s pretend we’re doing it from ESA.’ ESA is much farther away than Potomac Yard. And I’m a co-founder of the Greater Washington Partnership, where we talk about regional growth and share prosperity. We say, ‘When one wins, we all win.’ So, I was taken aback. But I learn. No blood, no foul, I guess. When people get emotional, it falls on deaf ears.”

OK. Agree to disagree. Even though Leonsis, too, deals in irrational emotion.

“When the deal closes,” he says now, “I’m going to reach out to the Waldorf, and buy the couch.”

Related reading

Aldridge: Ted Leonsis and Muriel Bowser have a chance to save face
Robbins, Aldridge, Standig: Capitals, Wizards to remain at Capital One Arena

(Photo of Muriel Bowser and Ted Leonsis: Craig Hudson / The Washington Post via Getty Images)