D.C. Attorney General Brian Schwalb threw a wrench into billionaire sports owner Ted Leonsis’ already-shaky plans to move his two pro franchises—the Capitals and Wizards—across the river to Alexandria.
In a letter addressed to Monumental Sports and Entertainment Executive Vice President and General Counsel Abby Blomstrom, Schwalb says that Leonsis is contractually obligated to keep the teams in D.C., playing at the Capital One Arena, through 2047. WCP contributor Tom Sherwood was first to break the news on the Politics Hour Friday afternoon.
A Monumental spokesperson says in an emailed statement that the company “fundamentally disagree[s] 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.”
Leonsis and Virginia Gov. Glenn Youngkin agreed in a handshake deal to relocate the teams to Potomac Yard in Alexandria to a $2 billion, yet-to-be-built arena. But the agreement requires approval from the Virginia legislature, which has not included funding for the project in the state’s budget bill. It’s uncertain whether Youngkin will be able to overcome lawmakers’ opposition.
Schwalb, in his letter, adds a not-so-thinly veiled threat.
“To be clear, the District very much prefers not to pursue any potential claims against MSE. 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,” he writes.
Schwalb says $50 million in public financing that was allocated for improvements to Capital One Arena extended Monumental’s ground lease through 2047. And Monumental can’t wiggle out of the agreement by simply repaying the outstanding bond debt for those funds, the AG argues.
“The July 2007 legislation did not authorize [the DC Arena LP] to extinguish or revoke the lease extensions upon prepayment of the outstanding bond debt at some unknown time in the future,” Schwalb’s letter says. “Nor did any DCALP representative or District official suggest such a possibility during the legislative process. On the contrary, they all agreed on the public record that, in exchange for the $50 million in public financing, DCALP would exercise the two 10-year lease extensions—full stop.”
Schwalb’s letter also argues that Monumental’s negotiation with Virginia violated a 2017 with D.C. regarding the Entertainment and Sports Arena, home of the Washington Mystics. After the deal in Virginia began to tank in the state legislature, Leonsis reportedly met with Maryland Gov. Wes Moore to discuss plans for a new arena there.
Yet, Schwalb says that the $500 million in public funds that Mayor Muriel Bowser and Council Chair Phil Mendelson offered to Monumental to renovate Capital One remains on the table. The question, in light of Schwalb’s arguments, is whether or not it should be.
This story has been updated with comment from Monumental.