The Attorney General for the District of Columbia believes that Monumental Sports can not move the Washington Capitals hockey team and Washington Wizards basketball team from their current arena in the District to a new one in Virginia.
A bond agreement from 2007 could prevent the move, the DC Attorney General Brian Schwalb stated in a letter today, even if Monumental Sports or other sources paid off the bonds early.
If Schwalb were to actually sue Monumental Sports in court and his arguments were upheld, it would be much more unlikely that the two professional teams could move to a new arena in the Potomac Yard neighborhood of Alexandria.
After several paragraphs encouraging team leadership to refocus on its commitment to stay in the District, Schwalb wrote:
"In July 2007, the District enacted legislation that gave DC Arena LP (DCALP) $50 million to renovate the Arena. Those funds were raised through municipal bonds. The Council expressly conditioned that public financing on DCALP's commitment to extend the original ground lease for an additional 20 years, thereby ensuring the District and its taxpayers that the Wizards and the Capitals would continue to play their home games at the Arena through 2047. The July 2007 legislation did not authorize DCALP to extinguish or revoke the lease extensions upon prepayment of the outstanding bond debt at some unknown time in the future."
Monumental Sports, however, disputes this, saying that an amendment in 2019 does allow them to both pre-pay any bonds and also revoke their right to the ground lease.
"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," according to a Monumental Sports spokesperson.
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In December, local and state officials announced plans to build a new professional sports arena at Potomac Yard. In addition to the new Monumental Sports arena for the Caps and the Wizards, the newly-developed neighborhood plans included restaurants, public spaces, a performing arts venue, retail, hotels and more. In addition, Monumental Sports would move its global headquarters to the new neighborhood, Alexandria would build an events venue and more.
However, earlier this month Virginia lawmakers did not include funding for the arena or its governing structure in the budget it passed and sent to Gov. Glenn Youngkin, putting a major hurdle in the way of developing the proposed arena in Potomac Yard. That news was a victory for those who oppose the arena.
Gov. Yongkin said he would either introduce new legislation for the arena, specifically, or include it as an amendment to the budget that was passed.
