The Washington Wizards and Washington Capitals appear set to leave their longtime home in the district for a new arena at JBG Smith’s Potomac Yard project in Virginia.

The teams’ owner, Ted Leonsis, and Virginia Gov. Glenn Youngkin announced Wednesday a nonbinding agreement for an arena in the Potomac Yard area of Alexandria as part of a public-private partnership. The facility could open as soon as 2028. The NBA’s Wizards and the NHL’s Capitals have occupied Capital One Arena in downtown Washington, D.C., since it opened in 1997.

The Virginia arena would be an anchor for a proposed $2 billion, 9 million-square-foot mixed-use commercial development at JBG Smith’s Potomac Yard. It’s the latest trend of professional sports facilities being built outside a central business district anchoring commercial space with offices, retail and residential uses, such as the Atlanta Braves’ Battery.

"This is what downtowns compete against — Leonsis wants the extra land because he wants to create an entertainment district," Rich Bradley, former executive director of the DowntownDC Business Improvement District, told CoStar News. "From a physical point of view, Alexandria is not that far away from downtown Washington. It's as close to downtown D.C. as Georgetown is."

The new arena is earmarked for a 12-acre site wedged between Potomac Avenue and two railroad lines, directly south of the $1 billion Virginia Tech Innovation Campus that is scheduled to open next year.

One of the main objections to the move since rumors began has been accessibility. While the current arena in downtown Washington is accessible by way of multiple Metro stations and central for fans coming in from the Maryland and Virginia suburbs, Potomac Yard is served by one Metro stop, the new Potomac Yard Metro station, and sits off few thoroughfares that already suffer from heavy traffic, including Route 1.

There is also limited space for additional transit options because the site is up against the Potomac River to the east and Reagan International Airport to the north.

The tentative agreement between Leonsis’ Monumental Sports & Entertainment and Virginia still requires additional approvals from local jurisdictions. The deal calls for JBG Smith to sell property for the arena to a Virginia stadium authority. Monumental Sports & Entertainment would lease the facility from the state.

D.C. officials rushed out legislation late Tuesday that provides $500 million to renovate Capital One Arena after rumors began swirling Monday of the two teams’ potential move to Virginia.

The legislation, approved unanimously by the D.C. Council and backed by Mayor Muriel Bowser, appears to be 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.

“This proposal represents our best and final offer,” Bowser said in a statement late Tuesday night, referring to the $500 million proposal.

Capital One Arena is viewed as outdated and not capable of being expanded for the current needs of pro sports franchises, like on-site practice facilities and outdoor gathering areas. Monumental Sports & Entertainment owns Capital One Arena.

In contrast, Potomac Yard has a parcel that is large enough for the type of facility coveted by the owners of pro sports franchises. In addition to hosting basketball and hockey games, the new arena is slated to include a large outdoor plaza, television studios and a performing arts venue.

Potomac Yard is located in the Alexandria portion of JBG Smith’s larger National Landing development. National Landing also spreads north into Arlington in the Crystal City and Pentagon City neighborhoods. Amazon’s East Coast headquarters is located in several buildings within the Crystal City and Pentagon City segments of National Landing.

Capital One Arena since its opening has been credited as the catalyst behind the revival of Chinatown and other nearby neighborhoods.

The late former Wizards and Capitals owner Abe Pollin was heralded for years in Washington, despite fielding mediocre teams for decades, in recognition of him moving the teams to the roughly $200 million arena he built and paid for at age 73.

Pollin and his partners moved the teams from their former stadium, the US Airways Arena that sat about 10 miles east of Washington in Landover, Maryland, in part because the suburban location was difficult to get to.

"We did all kinds of studies, but it was pretty obvious that downtown was the best of all locations” for the new stadium, Raymond A. "Chip" Mason, the former CEO of Legg Mason who was Pollin's financial adviser on the project, told the Washington Post in 1997 when Capital One Arena, then known as the MCI Center, opened its doors.

"I don't want to sound corny," Pollin said in a Post interview that year, but "this is the nation's capital. It's been good to me all my life. And I decided to do it. Not everything is dollars and cents."

In the years following the arena’s arrival, Chinatown and the neighboring Penn Quarter area emerged as trendy nightlife districts, and new apartment buildings and offices sprouted around the stadium.

The decision by Leonsis to now move the teams from Capital One Arena back to the suburbs will most likely expedite the deterioration of an already struggling downtown and leave Washingtonians with the feeling that Pollin's efforts will be unraveled.

However, Monumental Sports & Entertainment is considering a renovation of Capital One Arena to serve as the home for the WNBA’s Washington Mystics, which is also owned by Leonsis, and as an entertainment venue, the company said in a Wednesday news release.

“We are working to build a lasting legacy over multiple generations," Leonsis said in the release. "Our business needs have changed dramatically since our current arena opened in 1997."