Va. Gov. Youngkin arrived like a GOP star, but arena failure clouds legacy

Va. Gov. Youngkin arrived like a GOP star, but arena failure clouds legacy

RICHMOND — No Virginia governor has come into office with a deeper dealmaking background than Glenn Youngkin, who as former co-chief executive of the Carlyle Group made a fortune acquiring and merging companies around the globe.

But as the Republican chief executive of a purple state, Youngkin has struggled to translate that business acumen into political success — or even economic development success, with the demise Wednesday of his much-touted plan to bring the Washington Wizards and Capitals to Alexandria.

While Youngkin and his group of financial experts had negotiated with team owner Ted Leonsis to cut what the governor called “the single largest economic development deal in Virginia’s history,” the governor was never able to work the same magic with members of the General Assembly who had to sign off on the $2 billion project.

The plan’s failure wipes out a significant legacy-making opportunity for a novice politician who burst onto the scene in 2021 and drew national attention as a fresh Republican face. In his first two years in office, Youngkin enjoyed state coffers overflowing with federal pandemic relief funds and a friendly GOP-controlled House of Delegates. But as the clock winds down on his four-year term, the governor has lost the legislature to Democrats and seen his priorities slip away.

“He’s a total lame duck right now,” said Robert Holsworth, a Richmond political analyst who has studied Virginia governors for decades. “He has shown tremendous political inexperience.”

In an interview Thursday with The Washington Post, Youngkin defended his legacy as one of bipartisan accomplishment — such as passing tax cuts each of the previous two years and landing the country’s only Lego manufacturing facility — but expressed frustration with the Democratic-controlled state Senate for blocking the arena.

“I so fundamentally believe that this is a giant mistake that we didn’t have to make. The Senate didn’t have to do this,” he said. Led by Finance and Appropriations Committee Chairwoman L. Louise Lucas (D-Portsmouth), the Senate blocked a bill that would have authorized the arena and stripped language from the state budget. Though some House Democrats initially voted for the arena, the project was unpopular in Alexandria and never built a strong constituency in the General Assembly, where even some Republicans did not support it.

Youngkin said he was disappointed but not surprised when Leonsis called Wednesday to say he was going to stay in the District instead. “I suspected that he was worried,” Youngkin said. “He had options — and listen, all companies have options. … I always knew he could go someplace else if we didn’t say yes and do the work.”

Youngkin had warned lawmakers that failure to approve the arena deal could harm the state’s vaunted reputation as a good place to do business. Leonsis said as much on Wednesday in an interview with The Post: “My experience was that I had a better experience on the business side in D.C. than I just did in Virginia, which was really, really surprising and eye-opening.”

Those words sting in a Virginia that boasts of being twice named by CNBC as the best state for business under Youngkin’s Democratic predecessor, Ralph Northam. It finished at No. 2 last year.

“The last governor who made us number one for business two years in a row was probably a lot more collaborative on these projects,” House Speaker Don L. Scott Jr. (D-Portsmouth) said in an interview. Though Scott has developed an unlikely camaraderie with Youngkin — sharing a weekly morning Bible study during the legislative session — he faulted the governor for not doing enough to build support among lawmakers.

“I think leadership matters and style matters, and we did not have the leadership and style that it takes to get a project like that done with so much at stake,” Scott said.

Youngkin had a different view of Leonsis’s comment. “I think he was clearly identifying that the Senate didn’t do the work,” he said. Youngkin cited nothing he would have done differently and said the proof of the administration’s “good work” was that the House of Delegates initially passed arena legislation.

Now, Youngkin said, Virginia has to pick up the pieces. “I firmly believe that we’ve got a lot of repair work to do as a state,” he said, vowing to continue making the case to businesses that they should locate here.

What remains to be seen is how much the project’s failure damaged Youngkin’s own political stature. Presidential whispers began as soon as he was elected, but that bloom began to fade in 2022 when Youngkin campaigned around the country for 15 Republican gubernatorial candidates and only five of them won. Last year, he mounted a costly all-out effort to win GOP control of the General Assembly only to see Democrats hold on to the Senate and flip the House.

Amid the national attention and appearances on Fox News and other right-wing media, Youngkin wobbled on the home front. His stoking of culture wars pleased the GOP base but sometimes fizzled as policy, such as abortive efforts to create a tip line for parents to complain about teachers and principals and a rewrite of state history standards that was widely criticized as racially insensitive and inaccurate.

He has presided over a resurgence of job growth as the nation emerged from the pandemic shutdowns, and with state revenue overflowing, Youngkin won bipartisan support for a total of $5 billion in tax cuts over his first two years in office. He also worked across the aisle to secure increased funding for mental health services and teacher pay.

“For all this and more, the Governor can hold his head high,” Lt. Gov. Winsome Earle-Sears, a fellow Republican, said Thursday in a written statement lauding Youngkin’s legacy.

Despite his success in the private sector, Youngkin as governor has had some noteworthy misses in the economic development realm. He failed to persuade the Biden administration to locate the new headquarters for the FBI in Virginia, with Maryland winning even though the agency itself favored a site in Springfield. And when Ford Motor Co. expressed interest in locating a major battery plant in Southside Virginia to supply electric vehicles, Youngkin himself blocked the deal, citing concern that the operation was a front for a Chinese manufacturer.

The plant located in Michigan instead; the Virginia site, in a region desperate for jobs, remains unused.

But Youngkin has announced deals for the massive, $1 billion Lego plant in Chesterfield County as well as headquarters relocations for Boeing and Raytheon. Asked if he sees a difference between public and private dealmaking, or whether he’s learned any lessons, Youngkin said that “it requires a General Assembly that wants to work with us.”

His responsibility, he said, lies in presenting good opportunities. And Youngkin said he believes his administration worked “tirelessly” to educate lawmakers and engage with them about the arena.

But Holsworth, the political analyst, said he saw a significant difference in the way Youngkin approaches big initiatives compared with previous governors. When Republican George Allen wanted to impose new education standards in the 1990s and had a Democratic legislature, he said, the governor appointed prominent Virginia educators to key administration roles and mounted a campaign around the state to build support from lawmakers and local officials — all before any votes were taken.

Similarly, in the 2000s, Democrat Mark R. Warner logged miles around the state and made endless PowerPoint presentations to persuade business groups and a GOP legislature that Virginia had to raise taxes to preserve its high bond rating.

Youngkin made no such broad effort to pave the way for the arena, Holsworth said, or for a proposed overhaul of the state tax system that the governor rolled out in December. Instead, Youngkin began touring the state after the General Assembly adjourned March 9, campaigning to handpicked Republican crowds against what he dismisses as the “backward budget” passed by lawmakers and condemning the Senate for not supporting the arena. At the same time, he is rolling out scores of vetoes of Democratic legislation — including Thursday, when he vetoed bills to create a legal cannabis market and increase the minimum wage, two of Democrats’ top priorities.

“It’s just not a very keen understanding of the political dynamics of Virginia,” Holsworth said.

Now Youngkin must shake off the arena loss and find common ground with the very legislators who killed it to get a state spending plan passed by the time the fiscal year ends June 30. Otherwise, Virginia could face an unprecedented government shutdown.

Youngkin said he is optimistic that he can work with Democratic leaders, saying he never considered the arena a bargaining chip for the budget. “I need them to engage with me once again, but there is a common sense budget that we can deliver together that drives Virginia forward,” he said.

As long as that budget, he added, contains no tax increases.

And that, Democratic leaders have said, is a non-starter.

Jonathan O’Connell in Washington contributed to this report.