Wizards, Capitals' proposed move not permitted for at least another 24 years, DC attorney general argues

In December, Washington Wizards owner Ted Leonsis and Virginia Gov. Glenn Youngkin announced plans to move the Wizards out of Washington, D.C., in favor of a multibillion-dollar sports and entertainment complex located across the Potomac River.

A new arena for the Wizards and the Washington Capitals, the city's NHL franchise, could be constructed in the Potomac Yard area in nearby Alexandria, Virginia. The project would be funded by a public-private partnership and would likely break ground in 2025, according to Youngkin’s office. The project's tentative completion date is late 2028.

But the District of Columbia attorney general recently presented a potential roadblock. Brian Schwalb wrote a letter to Monumental Sports and Entertainment, the Wizards and Capitals' parent organization, arguing the sports franchises have to remain in the downtown arena through at least 2047.

Schwalb asserted in the letter, obtained by The Associated Press Friday, that there is a 2007 bond agreement for renovations that extended the teams’ lease for 20 more years beyond the initial time frame through 2027.

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The proposed move of the Capitals and Wizards to nearby Virginia has stoked concern in a pair of fragile Washington neighborhoods. (AP Photo/Alex Brandon)

Aside from the potential bond agreement issues, the $2 billion plan for the new arena and entertainment district also faces challenges in the Virginia Legislature.

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 Youngkin and Leonsis out of the state budget. That development doesn’t necessarily mean the end of the plan, but it complicates things.

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"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?"

An exterior shot of Capitol One Arena June 24, 2022, in Washington, D.C. (Stephen Gosling/NBAE via Getty Images)

D.C. Mayor Muriel Bowser previously suggested the city would be willing to contribute an estimated $500 million toward arena renovation, and Schwalb said that offer still stands.

In an op-ed piece in The Washington Post last month, Bowser 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 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."

Muriel Bowser, mayor of the District of Columbia, during an interview in Washington, D.C. Oct. 13, 2023.  (Ting Shen/Bloomberg via Getty Images)

"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," a Monumental spokesperson said.

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.

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Earlier this month, Democratic Virginia Sen. L. Louise Lucas, who chairs the Finance and Appropriations Committee, excluded the arena deal from the state budget. That development doesn’t necessarily mean the end of the road for the plan, but it complicates the path forward.

Editor's note: Monumental Sports & Entertainment first unveiled plans to relocate to Virginia in Dec. 2023. Separately, the ground lease agreement from five years ago ratified another agreement that was made in 2007. This story has been updated to reflect those statements.

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The Associated Press contributed to this report.