WTOP NEWS: There has been another development in the ongoing saga regarding the possible relocation of the Capitals and Wizards arena from D.C. to Alexandria, Virginia: According to a letter from the D.C. Office of the Attorney General, the teams are contractually obligated to remain in the District until 2047.
In the letter, dated Tuesday, to Monumental Sports & Entertainment’s general counsel Abby Blomstrom, D.C. Attorney General Brian Schwalb cited legislation from July 2007 in which D.C. provided $50 million through municipal bonds for arena renovations with the caveat that the lease would be extended an additional 20 years beyond its initial 2027 time frame.
Monumental has stated previously it can legally end its lease at Capital One Arena early, citing amendments to the original agreement.
Schwalb countered this, stating the legislation doesn’t include any amendments that would allow the company to “extinguish or revoke the lease extensions upon prepayment of the outstanding bond debt.”
He further posited that Monumental had already broken additional contractual obligations by negotiating with Virginia.
The attorney general said the agreement includes terms that state that if the company ever intended to relocate the Capitals and the 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.
The letter does state that D.C. Mayor Muriel Bowser’s $500 million offer to renovate Capital One Arena is still on the table.
Bowser’s office told WTOP it has no comment on the D.C. attorney general’s letter at this time. However, in an op-ed piece in The Washington Post last month, the mayor said the city would enforce the terms of the lease if necessary.
Schwalb’s letter echoed this sentiment.
“The District very much prefers not to pursue any potential claims against MSE,” Schwalb wrote in the 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 reengage with District officials around a mutually beneficial arrangement that advances the long term interests of both the District and MSE.”
In response to the letter, a Monumental spokesperson told WTOP, “We fundamentally disagree with the Attorney General’s opinions, which are contradicted by the DC General Counsel as recently as 2019 when the city ratified the Ground Lease,” referring to an amendment made to the lease.
This is just the latest snag Monumental has faced as the company’s $2 billion plan for a new arena in Alexandria has stalled in the Virginia legislature. Democratic Sen. L. Louise Lucas, chair of the Finance and Appropriations Committee, excluded funding for the arena in the state’s budget.
“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?”
Virginia Gov. Glenn Youngkin and Ted Leonsis, owner of the Capitals and Wizards, announced in December a handshake deal to build a new arena and move the teams to the Potomac Yard neighborhood of Alexandria.
