Monumental Sports & Entertainment and Washington, D.C., Mayor Muriel Bowser announced that they will formally propose legislation to fund the renovation of Capital One Arena, the home of the Washington Wizards and Capitals. The news comes nearly seven months after a frantic day in March when plans for a proposed new arena in the D.C. suburb of Alexandria, Va., were scuttled, forcing Monumental to sign a term sheet with the city to revamp their existing home.
D.C.’s city council will officially vote on what is a sale-leaseback agreement, where Monumental would sell Capital One to the city for $87.5 million before leasing the venue from the city for 25 years through the year 2050. That purchase price by the city is part of a $515 million taxpayer-funding package going toward the $800 million renovation of the arena and redevelopment of Gallery Place, a retail and commercial space adjacent to the arena. (The council unanimously approved the funding in April.)
Monumental is committing the remaining $285 million and is responsible for cost overruns. It will also pay $1.5 million per year in rent with periodic escalations for the duration of the lease.
The proposed renovation will include new concourses, increased training space for the teams and redesigned pathways for fan movement in concert with public transportation authorities. The full project is scheduled to be completed by the 2027-28 NHL and NBA seasons.
“Our vision for a wholly re-imagined sports and entertainment destination will be ambitious, reflective of our community, and designed to ‘wow’ our most ardent supporters as well as casual fans,” Monumental founder Ted Leonsis said in a statement.
“We know that when our Downtown does well, our city does well,” Mayor Bowser said. “This catalytic investment is an investment in our residents and businesses in all eight wards.”
In March, a handshake deal between Leonsis and Virginia governor Glenn Youngkin for a $2.2 billion mixed-use district in Alexandria, including a new arena for the Capitals and Wizards, fell apart after the town ended negotiations with Monumental. Additionally, Youngkin, a Republican governor, could not gather support from the state’s General Assembly after Democrats gained control of both the state house and senate in the last election.
The proposed new lease extension gives Monumental five four-year options that could extend the agreement into 2070, though the company would have to give the city notice at least a year before the current term expires. It also has a non-relocation covenant where Monumental cannot move the teams until June 30, 2045, though a year prior to that date D.C. would have exclusive negotiation rights with the company to extend the lease.
(This article has been corrected in the second paragraph to reflect that it is a sale-leaseback arrangement.)
