Mar 22, 2024 - News

Capitals and Wizards can’t leave D.C. until 2047, AG says

Capital One Arena sign

Photo: Jonathan Newton/The Washington Post via Getty Images

The Wizards and Capitals can't contractually leave Capital One Arena until 2047, the D.C. attorney general told the teams' owner in a letter this week.

Why it matters: It's the latest blow to Monumental Sports & Entertainment's effort to move the teams to Alexandria, which has stalled in the Democratic-controlled Virginia legislature.

Driving the news: "I am advising you that the District does not agree with your legal conclusion that [Monumental's] proposed arena move to Virginia does not violate or beach its legal obligations to the District," Attorney General Brian Schwalb wrote to Monumental's general counsel. Journalist Tom Sherwood broke news of the letter, which Schwalb's office provided to Axios.

  • The AG argues that Monumental can't get out of the lease by prepaying its outstanding bond debt.
  • Schwalb also says that $50 million in publicly financed improvements to the arena in 2007 hinged on a commitment to "extend the original ground lease for an additional 20 years … through 2047."

Zoom in: Schwalb says Monumental has also "broken other promises to the District" by "negotiating a preliminary agreement with Virginia."

  • As Axios reported in December, the owner of the teams, Ted Leonsis, worked behind the scenes with Virginia Gov. Glenn Youngkin last year to hammer out the Alexandria deal.
  • Schwalb writes that a separate 2017 agreement with the city requires Monumental to notify D.C. of its intent to leave town and "negotiate exclusively and in good faith with the District for a period of six months."

Schwalb urges Leonsis to meet with D.C. leaders.

  • Mayor Muriel Bowser confirmed to Axios this week that the District's $500 million offer to modernize Capital One Arena remains on the table.

The other side: A spokesperson for Monumental referred Axios to previous comments that dispute the relocation would break its lease.

  • "We would not have started negotiations with the city or Virginia over the last two years without sound legal counsel," Monica Dixon, Monumental's president of external affairs, said in February.

Catch up fast: Leonsis and Youngkin unveiled a handshake deal in mid-December to build a new arena district in the Potomac Yard neighborhood.

  • But a key Virginia lawmaker, Sen. Louise Lucas, has been a "hell no" on the plan, spearheading concerns over taxpayers helping to fund the arena's $2 billion financing.
  • The state legislature excluded the arena deal from the budget, putting it on life support.
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