The District of Columbia agreed to make $515 million of improvements to the city’s home arena for its pro basketball and hockey teams, a deal struck after the teams’ owner dropped a plan for a new arena in Northern Virginia.
Ted Leonsis, owner of the NBA's Washington Wizards and NHL's Washington Capitals, said late Wednesday the teams will remain at Capital One Arena through 2050 after the financial deal was reached with D.C. Mayor Muriel Bowser and D.C. Council Chairman Phil Mendelson. The city also agreed to improve security in the Chinatown neighborhood where the arena is located and make other facility upgrades that Leonsis requested.
The decision to remain in Washington comes after the city of Alexandria disclosed Wednesday it had ended negotiations around the proposal.
The planned relocation had drawn a strong rebuke from a number of different corners since Leonsis and Virginia Gov. Glenn Youngkin announced their nonbinding agreement to move the teams to the Potomac Yard site in December.
That included from some Alexandria-area residents concerned with the scope of the project, from D.C. officials and businesses located around the current arena that didn't want to see the teams leave, and most importantly from Virginia state legislators including Democratic Sen. L. Louise Lucas, chair of the Senate Finance and Appropriations Committee who never docketed a Senate bill to set up the sports and entertainment authority necessary to oversee the arena project, citing its price and financing model that would be paid in part by public bonds.
The Virginia arena would have anchored a $2.2 billion mixed-use development at JBG Smith’s Potomac Yard site just south of Reagan National Airport, and Leonsis and Youngkin had said the teams could begin playing there as soon as 2028.
Washington’s retention of the two teams by promising arena improvements comes as many cities are exploring new or renovated sports facilities. The Los Angeles Clippers basketball team is expected to occupy the new Intuit Dome later this year. In the National Football League, the Buffalo Bills in New York and the Tennessee Titans in Nashville are both constructing new stadiums.
Capital One Arena opened in 1997, originally known as MCI Center, and helped create a revival of Washington’s Chinatown and Penn Quarter neighborhoods. The arena was praised by architecture and urban planning experts for how it fits in the city’s existing street network and was designed to not overwhelm the local neighborhood with an outsize building.
“In deciding to build the $200 million structure on a key site in the heart of the old downtown, [team] owner Abe Pollin and District authorities did the entire region a good turn,” Washington Post architecture critic Benjamin Forgey wrote in a review of the arena in November 1997.
“The big building is not what you would call a triumph of civic architecture, but it is an unusually attractive, welcoming sports arena,” Forgey wrote. The architects “found ways to reduce the visual impact of the building's true size and to fit it into its varied urban context.”
Planned Improvements
Since the onset of the pandemic, however, the neighborhood has declined economically, and crime has become an issue around the arena. Businesses in the Chinatown district worried that the neighborhood would decline further if the Wizards and Capitals left for Virginia.
As part of the city’s agreement with Leonsis, D.C. will improve sightlines for fans in the arena’s seating bowl, add more dining and hospitality options and make improvements to an alley that connects the arena to the Gallery Place shopping center. Leonsis will also take control of the management of Gallery Place. D.C. officials also agreed to assign 17 dedicated police officers to the arena on game day.
The city also plans to develop a new practice facility for the Washington Wizards located near the arena. Additionally, the deal calls for Leonsis to assume management of the home arena of the WNBA’s Washington Mystics in Southeast D.C.
D.C. officials rushed out legislation in December to provide $500 million to renovate Capital One Arena after rumors began swirling of the two teams’ potential move to Virginia. The legislation was a last-ditch effort to satisfy Leonsis after he asked the city for $600 million of public funding as part of an $800 million overhaul of the arena, the Washington Post reported in November.
Bowser said in a statement Thursday it never took the offer off the table, and with its $515 million investment — to be paid over three years — is ready to help "transform and expand the Capital One Arena into a state-of-the-art urban arena."
The new funding will still need to be approved by the Council, though it is expected to face little resistance after the original $500 million offer was unanimously approved in December.
In a statement issued Wednesday, JBG Smith CEO Matt Kelly said that following the collapse of the Virginia-area plan, his company will now pursue other development opportunities on the Potomac Yard site.
"The scheming and special interests that plagued this opportunity in the Virginia legislature will no doubt cause future employers ... to question whether their opportunity will get a fair hearing," Kelly said in a statement. "To say we are disappointed is an understatement."