MURIEL BOWSER
MAYOR
November 25, 2024
The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
John A. Wilson Building
1350 Pennsylvania Ave. NW, Suite 504
Washington, DC 20004
Dear Chairman Mendelson:
I am pleased to introduce the “Downtown Arena Revitalization Emergency Declaration Resolution of
2024” and the “Downtown Arena Revitalization Emergency Act of 2024” for your approval of the
development and financing agreement for the redevelopment of the Capital One Arena, approval of the
purchase and sale agreement for the Capital One Arena, and approval of a lease agreement.
The renovation and modernization of the Capital One Arena represents a major commitment and
investment by both the District and MSE in Downtown DC. The total direct public and private investment
in construction is $800 million; our economic impact study estimates the total economic activity of this
project will be over $1 billion. The project is expected to result in 4,900 construction jobs and $21 million
in new tax revenue over the three-year construction period.
The surrounding neighborhood will also benefit directly from a modernized building exterior, new
entrances, and improved public realm that are worthy of the vision set for the future of Downtown DC.
Monumental Sports and Entertainment has been working closely with the Gallery Place/Chinatown Task
Force and will increasingly engage local businesses, institutions and residents to ensure a beautiful,
vibrant and lasting exterior and streetscape and this project is an investment in the continued vibrancy of
Downtown and growth of the DC economy.
In March of this year, the DC Council and I shared the stage with Mr. Leonsis and Monumental Sports
and Entertainment announcing that we had reached an agreement and had a plan that would allow the
teams to expand as they needed to in Washington, DC. Subsequently, the DC Council voted unanimously
to fund $515 million for the renovation and modernization of the Capital One Arena. MSE and we are
now ready to execute the agreements before you and I urge the DC Council to pass the “Downtown Arena
Revitalization Act of 2024” this Council period so that we may continue to focus on the bright future of
the District of Columbia!
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A PROPOSED RESOLUTION
~~
Chairman Phil Mendelson
at the request
of the Mayor
IN THE COUNIL OF THE DISTRICT
OF COLUMBIA
To declare the existence of an emergency with respect to the need to approve the development
and financing agreement for the redevelopment
of the downtown arena; approve an
agreement for the disposition
by lease of certain real property owned by the District
government for the use and operation
of the downtown arena; approve a purchase and
sale agreement for the downtown arena; authorize the granting
of certain easements
related
to the downtown arena property; authorize airspace leases associated with the
downtown arena; continue and provide for property tax abatements and deed transfer and
recordation tax exemptions for the downtown arena; and authorize the issuance
of rules to
provide for additional signage on the downtown arena.
RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
resolution may
be cited as the "Downtown Arena Revitalization Emergency Declaration
Resolution
of 2024".
Sec.
2. (a) The Mayor and DC Arena L.P. (DCALP) are proposing to enter into
agreements whereby the District will acquire the existing Capital One Arena building, lease the
arena building and underlying land to DCALP, and provide funds to support the renovation
of the
arena in order for it to remain a world-class sports and entertainment space.
(b) Under the agreements, DCALP will fully renovate the inside and outside
of the arena
to improve the fan experience and will contribute $372.5 million to the renovation project. The
agreements will ensure that DCALP will keep the Wizards and Capitals
in the District through at
least 2050.
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(c) Together, the District and DCALP are committing approximately $800 million in 34
project investment to revitalize the a rena and surrounding environs. The renovated arena will 35
help revitalize the Chinatown/Gallery Place neighborhood, create quality new jobs for District 36
residents, and strengthen a commitment to community and fan engagement. 37
(d) In order for the District and DCALP to move forward with the project, the Council 38
must approve the agreements and enact conforming legislation . 39
(e) Emergency legislation is necessary to allow for the commencement of work on the 40
project on an expedited basis. 41
Sec. 3. The Council determines that the circumstances enumerated in section 2 constitute 42
emergency circumstances making it necessary that the that the Downtown Arena Revitalization 43
Emergency Act of 2024 be adopted after a single reading. 44
Sec. 4. This resolution shall take effect immediately. 45 MONUMENTALSPORTS.COM
Dear Mayor Bowser:
Monumental Sports and Entertainment (MSE) agrees to the terms contained within the
attached Amended and Restated Ground Lease, Development and Financing Agreement,
and Purchase and Sale Agreement and requests that you transmit the bill and documents
to the DC Council for their approval of our partnership agreements.
With DC Council approval, MSE will be in Washington, DC through 2050, with five renewal
options of four years each, for a potential additional twenty years beyond 2050, if
exercised. An evolution of the deal since the Term Sheet is that the District and MSE have
determined that it is most beneficial for the District to own the Capital One Arena building
and lease it back to MSE. Under this structure, MSE will continue to operate and maintain
the building consistent with its operations over the last 27 years. Finally, the Development
and Financing Agreement provides the conditions under which the District will provide the
public funding for the renovation of the Capital One Arena.
The $800 million combined public and private investment for this transformational project
will modernize both the Capital One Arena and portions of the area directly adjoining the
arena known as Gallery Place. Of that total, the District is providing $515 million (including
the purchase price for the building, which will be invested in the project) and MSE has
committed to a minimum of $285 million and taken on responsibility for any cost overruns.
As part of this project, MSE will meet the city’s requirements for 35% Certified Business
Enterprises (CBE’s) participation, and we are setting an ambitious goal to go beyond
requirements to achieve 50% CBE engagement. We also have reached a Memorandum of
Understanding with the building trades and will enter into a Project Labor Agreement. MSE
will begin construction immediately upon passage by the Council.
Last but not least, Monumental Sports is committed to the health and vibrancy of this
arena, neighborhood, and city and even prior to completing these documents, I announced
the most ambitious charitable effort the company has ever undertaken- District of
Play. This multi-million-dollar investment is designed to break down the barriers that
prevent kids in D.C. from playing sports by providing safe play spaces, empowering players
and engaging parents, coaches and the community. Monumental’s plan is to transform
access and opportunity in youth sports as Capital One Arena undergoes its own
transformation.
Thank you for your partnership and I look forward to working with you and the DC Council
to accelerate DC’s Comeback and secure DC as the media, sports and entertainment
capital!
Sincerely,
Ted Leonsis