Capitals, Wizards To Stay In D.C. After Move To Virginia Collapses
The plan to move D.C.'s NHL and NBA teams to Virginia is dead, and the teams’ owner has agreed to remain downtown for another 25 years.
Monumental Sports & Entertainment CEO Ted Leonsis joined D.C. Mayor Muriel Bowser at Capital One Arena Wednesday evening to sign a term sheet to stay in the District through 2050. The deal includes $515M from the city for an arena modernization and would allow Monumental to expand its businesses into 200K SF in the adjacent Gallery Place building.
The deal would also see Monumental take over managing the Mystics’ Southeast D.C. home, use some District-owned building parking for Monumental employees and plan a new practice facility for the Wizards downtown. The city would keep a minimum number of police officers downtown, The Washington Post reported.
“I’ve taken the high road,” Monumental CEO Ted Leonsis said at a press conference at Capital One Arena.
“We now have 200K SF that we can expand to. It’s not 12 acres, but it’s enough,” he added. “And that was one of the most important things for me — can we expand, can we do it? And we feel comfortable that we can do it.”
The announcement came hours after the city of Alexandria, which had planned to host a new $2B entertainment district anchored by an arena for the teams, said it wouldn't move forward with the plan.
“We negotiated a framework for this opportunity in good faith and participated in the process in Richmond in a way that preserved our integrity,” the release says. “We trusted this process and are disappointed in what occurred between the Governor and General Assembly.”
The Virginia plan, announced to great fanfare in December, with Gov. Glenn Youngkin and Wilson joining Leonsis and developer JBG Smith, would have moved the Capitals and Wizards from Capital One Arena to a newly built district next to the Potomac Yard Metro station.
The reversal is a huge win for D.C.’s Chinatown neighborhood, which was forced to confront the possibility of losing the teams as it was already struggling with crime, waning foot traffic and retail closures.
“The investment for us — while not insignificant by any means — what it will do for these square blocks and what it will do to Washington, D.C., is good for the team, but it’s also good for the businesses that surround the arena,” Bowser said at the press conference.
As reasons bolstering his decision to renegotiate with D.C., Leonsis cited the D.C. Action Plan, which proposes the city invest $401M in reimagining downtown, and the Secure D.C. bill the city council passed this month.
“The amount of work that has been done since December is extraordinary,” he said.
In December, a day before Leonsis announced the move, D.C. Mayor Muriel Bowser announced she had offered $500M to renovate Capital One Arena. Monumental had requested $600M from the city for an $800M renovation, The Washington Post reported at the time.
Bowser had maintained as recently as March 8 that the $500M offer was still on the table.
“I will consider it water under the bridge, lessons learned,” Bowser said Wednesday when reflecting on the process.
JBG Smith, the developer that owns the 12-acre Potomac Yard site that was set to house the arena district, has been doubling down on that part of Northern Virginia. It is building a $1B campus for Virginia Tech next to the Potomac Yard site, with the first building expected to open in 2025. The developer is also behind Amazon’s HQ2 campus 2 miles north and much of the surrounding retail in the National Landing neighborhood.
The plan Youngkin proposed would have financed the development through $1.5B in taxpayer-backed bonds that would be repaid with revenue from the arena.
But the bill to create an authority to issue those bonds was held up in the Senate Finance and Appropriations Committee by Chair L. Louise Lucas and ultimately wasn't included in the state's budget at the end of the legislative session this month. Youngkin decried the move as a “colossal mistake.”
“While we had made great strides in advancing the project’s transportation plan, overall design and financing structure, the opportunity was derailed largely due to partisan politics and, most troubling, the influence of special interests and potential pay-to-play influences within the Virginia legislature,” JBG Smith CEO Matt Kelly said in a statement Wednesday.
The company blamed the Virginia plan's failure on efforts to combine the arena with a casino in Tysons and said the situation “will no doubt cause future employers and the next Monumental to question whether their opportunity will get a fair hearing” in the state.
“Virginians deserve better,” Youngkin said in a statement Wednesday afternoon, following the news that Alexandria wouldn’t move forward with the district. “A one-of-a-kind project bringing world-class athletes and entertainment, creating 30,000 jobs and $12 billion in economic activity just went up in smoke.”
The plan to move the teams hit another hiccup on March 18 when D.C. Attorney General Brian Schwalb sent a letter to Monumental arguing the teams were obligated under their lease to remain at Capital One Arena through 2047.
In the hours before Wednesday’s announcement, Leonsis posted a string of comments on X, formerly Twitter, touting the attendance at Capitals and Wizards games and concerts at Capital One Arena.
While he said at Wednesday's press conference that he didn’t want to get into the weeds with the Virginia situation, Leonsis criticized the disconnect between Northern Virginia and Richmond.
“D.C did everything right from December on,” Leonsis said. “Every move they made, we would put on the board and say, ‘This is impressive. This is important. We need this,’ and they were together.”
UPDATE, MARCH 27, 9 P.M. ET: This story has been updated with additional details and comments from Wednesday evening's D.C. press conference.
CORRECTION, APRIL 2, 10:45 A.M. ET: The Bowser administration and Monumental Sports signed a nonbinding term sheet to renovate Capital One Arena. A previous version of this story misstated the agreement the parties signed. This story has been updated.
