McDonnell called Villanueva to concede the race, Eyewitness News learned.
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With 100,000 provisional ballots left to count, Villanueva has a lead of about 126,000 votes in the count issued Monday, putting him with 52.6 percent of the vote.
The stunning result marks the first time in more than a century that an incumbent Los Angeles County sheriff has lost a re-election bid.
Villanueva had already declared victory, but this is the first official acknowledgement from the incumbent.
"Today, I contacted Alex Villanueva to offer my best wishes for his administration as the 33rd elected Sheriff of Los Angeles County," McDonnell said. "We are in the process of arranging an orderly transition and a series of briefings to assist the new administration and it is my hope that the Sheriff-elect will come to his new position with an open-mind."
Villanueva then made his first public appearance for West Hollywood Democrats following the concession call from McDonnell.
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"He's a good person, but surrounded himself with some bad advice and that made him less effective than he could have been. Had he been effective, I wouldn't be here today," Villanueva said.
While he may have been outraised by McDonnell eight to one, he is the first Democrat elected in 138 years. It's a stunning upset even for an election that propelled so many California Democrats into office.
"It's a pretty good feeling and not so much for myself individually, but for a lot of people who have left the department in frustration," he said.
Villanueva, who is Puerto Rican, served with the sheriff's department for 30 years before retiring as a lieutenant. He sees his lack of executive leadership experience as an advantage.
"My experience is not with the entrenched bureaucracy or the status quo. I can actually see things through the lens of someone who has experienced the shortcomings of the organization, know where the problems are, know how to address them and I don't have a dog in the fight in trying to preserve a failing status quo," he said.
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During the campaign, Villanueva attacked McDonnell for allowing ICE agents into county jails - something that resonated with voters.
Villanueva also discussed some of the changes he's already working on.
"We're going to have a new command staff. We're going to have a whole new look of the department, physically. Come January, you're going to see a whole new look for the sheriff's department in terms of uniforms the deputies will use on patrol," he said. "Our recruitment efforts, you're going to see how we're going to change our course of action. We're going to start recruiting locally instead of nationally."
McDonnell is expected to hold a press conference where he'll reflect on his time in office at the Hall of Justice in downtown Los Angeles Tuesday morning.
Villanueva will be sworn in on Dec. 3.