The attorney general for the District of Columbia contends that the NBA’s Washington Wizards and NHL’s Washington Capitals are obligated to play their games in the downtown arena through 2047, the city’s latest salvo to keep them from leaving and one that the teams’ ownership believes won’t hold up legally.
In a letter Brian Schwalb wrote this week to Monumental Sports and Entertainment that was obtained by The Associated Press on Friday, Schwalb cited a 2007 bond agreement for renovations that extended the teams’ lease for 20 more years beyond the initial timeframe through 2027.
The letter comes as Monumental’s $2 billion plan for a new arena across the Potomac River in Alexandria has stalled in the Virginia legislature.
Schwalb said D.C. Mayor Muriel Bowser’s $500 million offer to renovate Capital One Arena still stands. Bowser in an op-ed piece in the Washington Post last month urged Monumental to consider that and said 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 a letter dated Tuesday to Monumental general counsel Abby Blomstrom in response to one she sent to the city last month. “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.”
Monica Dixon, a top executive at Monumental, laid out the company’s case Feb. 12 when asked about the lease ramifications.
“We wouldn’t have started negotiations with the city or Virginia over the last two years without sound, legal counsel, and we feel confident in it,” Dixon said at the time. “If this is something that results in litigation, we oughta let that process play out — I hope it won’t — but we do feel confident about the lease we signed and the amendments.”
A Monumental spokesperson said Friday, “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.”
That agreement five years ago ratified another made in 2007 that allows Monumental to pre-pay bonds and revoke the extension with 120 days notice.
Earlier this month, Virginia Democratic Sen. L. Louise Lucas used her perch as chair of the Finance and Appropriations Committee to keep the arena deal struck by Republican Gov. Glenn Youngkin and Ted Leonsis, the head of Monumental, out of the state budget. That development doesn’t necessarily mean the end of the road for the plan, but it complicates the 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?”