D.C. To Purchase Capital One Arena For $88M, Lease Back To Monumental
The terms of the $515M deal between Washington, D.C., and the owner of its professional basketball and hockey teams to stay downtown have come into focus.
Mayor Muriel Bowser introduced legislation over the weekend that would clear the way for the District to purchase Capital One Arena in Chinatown from Monumental Sports & Entertainment, then lease it back to the sports group through at least 2050.
The agreement includes four five-year term extensions that could take the lease as far as 2070.
“We’re keeping Washington’s teams where they belong — here in the Sports Capital, and we’re doubling down on having a world-class destination and entertainment district in the center of DC,” Bowser said in a statement. “We know that when our Downtown does well, our city does well. This catalytic investment is an investment in our residents and businesses in all eight wards.”
D.C. inked the $515M deal with Monumental to keep the Washington Capitals and Wizards downtown through 2050 in the spring. It was a shocking reversal from months earlier, when the teams' owner, Ted Leonsis, announced the teams would move across the river to a new $2B sports and entertainment district in Potomac Yard, Virginia.
The bill outlines the trajectory of the District’s investment. Upon passage by the D.C. Council, $87.5M would be allocated to purchase the arena in addition to another $84.3M for the start of construction. Another $84.3M will then be available upon execution of the agreement. By October 2025, $171.8M will be available, with the final $171.3M available by October 2026.
Monumental’s rent would start at $1.5M in 2025 and increase with extensions, reaching $3.3M during the final renewal term. The arena would be exempt from property and leasehold taxes.
Monumental will reinvest its sale proceeds in the project, the announcement said. In total, the company anticipates spending at least $285M of its own funding on the revamp and will be responsible for anything over budget. Monumental’s contribution would bring the total revamp to $800M in construction costs.
D.C. Council Chairman Phil Mendelson said the council will move “expeditiously” on a public hearing and that the legislation should be finalized by the end of the year.
Monday’s releases provide additional details on the renovation, which is expected to be ready in time for the 2027-2028 season.
The project includes a 200K SF expansion into the Gallery Place mixed-use development next door, which will house back-of-house operations. That property, which includes a Regal Cinemas and several stories of retail and office space, was acquired by MRP Realty and Global Fund Investments in May for 17% of its assessed value.
The arena's main entrance on F Street would be expanded. It would get wider concourses and more elevators and escalators, 65% more concession space and 30% more restrooms. Food and beverage options will be revamped to cater to the “widest array of tastes and showcasing varied cuisines,” the release said.
Athlete spaces will grow by more than 60%, including a new player’s lounge and dining space and an expanded family lounge. The Capitals will get a new film room in their locker area and the Wizards will get a new on-site training facility. Monumental is also pursuing LEED certification for the development.
“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,” Leonsis said in a statement. “We want to capture the magic that comes from providing the most entertaining experience — which every guest deserves.”
The city estimates that the project would generate an economic impact of over $1B, create 4,900 new construction jobs and $21M in tax revenue over the three-year construction period.
The agreement also includes a non-relocation covenant in which Monumental cannot consider relocating until June 2045. For the year leading up to that date, D.C. would have exclusive negotiation rights.
CORRECTION, OCT. 21, 4 P.M. ET: A previous version of this article misstated the arena renovation bill’s sponsor and investment timeline. It has been updated.
