WASHINGTON — After months of negotiations with the parent company that owns the NBA’s Washington Wizards, NHL’s Washington Capitals and WNBA’s Washington Mystics, the mayor of the District of Columbia has introduced a bill that, if passed by the city council, would sell Capital One Arena to the District for $87.5 million and set the stage for arena renovations to be completed for the Wizards’ and Capitals’ 2027-28 seasons.
In April, the city council unanimously voted to commit $515 million to the renovation project. Ted Leonsis, the Wizards’ and Capitals’ principal owner and the CEO of Monumental Sports and Entertainment, said Monumental has pledged to contribute “a minimum of $285 million” to the renovation of the arena and accept responsibility for any cost overruns.
Back-of-house renovations — in spots that would not inconvenience players or fans — would start as soon as the mayor’s proposal is approved by the city council. After the Wizards and Capitals complete their 2024-25 seasons, renovations would begin on the players’ spaces on the arena’s ground floor.
“This will be the largest investment made in an existing arena in the country,” Leonsis said Monday. “It’s going to be messy. It’s going to be long and hard — three years of deconstruction and then construction. But we’re up for that task.”
Assuming the city council approves the deal, Monumental would sell the arena to the city and then immediately lease the arena from the city in what is known as a “sale/leaseback” arrangement. Monumental currently manages the venue and would continue to do so.
Monumental has pledged to invest the $87.5 million it would receive from the arena sale directly into the renovation project, on top of the $285 million it has already pledged, sources said.
The amended lease would run through June 2050, and Monumental would hold five four-year extension options that could potentially extend the lease through 2070. The lease contains a non-relocation agreement that would prevent Monumental from considering the teams’ relocation until June 30, 2045. From June 30, 2044, through June 30, 2045, the city will have an exclusive right to negotiate with Monumental to extend the lease. After June 30, 2045, Monumental would be allowed to negotiate with other cities.
In the first year of the new lease, Monumental would pay $1.5 million in rent. If Monumental exercises all of its renewal options, the annual rent would reach $3.3 million during the last renewal term.
Monumental officials said the renovated arena will improve fans’ game-day and game-night experiences. With contributions from the architectural and design firm Gensler, the plan is to widen the arena’s concourses, reduce wait times for food and beverages and build 30 percent more restrooms.
“Gensler has worked with us … for quite a long time, and they know this building inside and out,” said Monica Dixon, Monumental’s chief administrative officer and vice president for external affairs. “And so, the time it took to provide a plan from Gensler was like nanoseconds, and that was something that we took into account. This is going to be really fast. We’re going to cram a lot in a short amount of time, so we want experienced people who know our building, know this city.”
An initial phase of the renovation — slated for the summer of 2025 — would increase the players’ spaces by 60 percent, Monumental officials said. Locker rooms and athletic training areas would be expanded, and the size of the lounge for players’ families would double.
Leonsis originally sought to move the Wizards and Capitals to Alexandria, Va., but those plans fell through after the proposal encountered obstacles within the Virginia Senate.
In March, Washington Mayor Muriel Bowser and Leonsis signed a term sheet designed to keep the Wizards and Capitals in D.C. In a letter to the mayor, Leonsis noted that Monumental has pledged to contribute “a minimum of $285 million” to the renovation of the arena and responsibility for cost overruns.
The Alexandria site was slated to include a state-of-the-art practice facility for the Wizards. Now that negotiations between Monumental and city officials for the renovation project have been completed, both sides expect to ramp up their efforts to identify a location for a new Wizards practice facility.
Gallery Place has been ruled out as the site for the practice facility, because it doesn’t have a large enough footprint and because it would have cost too much, Monumental officials said. But Dixon said a new facility will be located within the District.
