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The Washington Capitals‘ proposed move from D.C. to Alexandria, Va., just became a lot more complicated.
Virginia Governor Glenn Youngkin and Ted Leonsis of Monumental Sports & Entertainment, owner of the Capitals and the NBA’s Washington Wizards, announced in December a deal to build a new arena and move the teams across the Potomac River to Alexandria, Virginia.
However, in a letter addressed to Monumental’s general counsel Abby Blomstrom on March 22, D.C. Attorney General Brian Schwalb maintained that the Capitals — and the Wizards, who currently share Capital One Arena — are contractually obligated to remain in the District until 2047. Schwalb cited a 2007 bond agreement for renovations that extended the teams’ lease for 20 more years beyond the initial timeframe through 2027.
Schwalb also said that the agreement includes terms that state if Monumental ever intended to relocate the Capitals and Wizards, Monumental was required to: notify D.C. of its intent; negotiate exclusively with D.C. for six months; refrain from negotiating with any third parties during that six-month period; if it intended to enter a new agreement with a third party following the six-month negotiation period, it would need to provide D.C. with written notice and the terms of the agreement; and allow D.C. 90 days to make a competing offer.
Monumental’s Proposed $2 Billion Relocation Plan Hits a Road Block in Virginia State Legislature
Schwalb’s letter comes as Monumental’s proposed plan for a new arena in Alexandria has stalled in the Virginia legislature. The plan calls for the creation of a $2 billion development in the Potomac Yard section of Alexandria that would include an arena, practice facility and corporate headquarters for Monumental, plus a separate performing arts venue, all just miles from Capital One Arena, where the teams currently play in Washington.
Under the terms of the deal, Monumental and the City of Alexandria would put in money up front, but about $1.5 billion would be financed through bonds issued by a governmental entity this year’s legislation would create. However, Virginia Democratic Senator L. Louise Lucas, chair of the Finance and Appropriations Committee, kept the arena deal out of the state budget, complicating a potential path forward.
“Why are we discussing an arena at Potomac Yard with the same organization that is breaking their agreement and commitments to Washington DC? ” Lucas wrote on social media. “Does anyone believe they wouldn’t do exactly the same thing to us?”
Will the Capitals Stay, or Will They Go?
In his letter, Schwalb said D.C. Mayor Muriel Bowser’s $500 million offer to renovate Capital One Arena still stands. In an op-ed piece published in the Washington Post last month, Bowser urged Monumental to consider the offer and warned that the city would enforce the lease terms if necessary.
“The District very much prefers not to pursue any potential claims against MSE,” Schwalb wrote in his letter. “It remains committed to maintaining and growing its partnership with MSE and to keeping the Wizards and Capitals at the Arena until the end of the existing lease term in 2047, if not beyond. It is in that spirit that the District urges MSE to re-engage with District officials around a mutually beneficial arrangement that advances the long term interests of both the District and MSE.”
The bottom line? Monumental’s proposed relocation plan isn’t dead in the water, but it just got a lot more complicated. For now, the Attorney General’s letter will likely send them back to the negotiating table.
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