Monumental Moment: Wizards and Capitals Leaving DC for Potomac Yard
Teams will move to a planned $2B entertainment district in Alexandria, Va.
By Keith Loria December 13, 2023 11:33 am
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Monumental Sports & Entertainment has agreed to move the Washington Wizards and Washington Capitals from Washington, D.C.’s Capital One Arena to a new, publicly funded arena in Alexandria, Va.
Virginia Gov. Glenn Youngkin, Monumental chairman and CEO Ted Leonsis and Alexandria officials made the announcement Wednesday morning in Potomac Yard, the planned site for a $2 billion entertainment district that will be developed by JBG Smith.
“The opportunity to expand to this 70-acre site in Virginia, neighboring industry-leading innovators, and a great academic partner, would enable us to further our creativity and achieve next-generation, leading work, all while keeping our fans and the community at the forefront of everything we do,” Leonsis said at the press conference.
The move is a blow to D.C., whose commercial corridors are already struggling in the wake of the pandemic and a decreased office population. The Capital One Arena, built in the ‘90s, was designed to boost economic activity in the Chinatown area, which was largely successful.
But Virginia offered a deal that was too good for Monumental to pass up.
The development plan calls for the arena to be constructed on a currently unoccupied 12-acre site situated between the recently delivered Potomac Yard Metro station and the first phase of the Virginia Tech’s Innovation Center.
Along with the arena, the 9 million-square-foot complex would include a global corporate headquarters for Monumental Sports & Entertainment, a Monumental Sports Network media studio, the Wizards practice facility, a performing arts venue, and an expanded esports facility.
The arena, Phase 1, and future phases of development are estimated to generate a combined $12 billion in economic impact for Alexandria and create approximately 30,000 jobs over the next several decades, according to Youngkin.
“This is the most visionary sports and entertainment development in the world, bringing together entertainment, sports, and technology in the most advanced innovation corridor in the United States — a once-in-a-generation and historic development for the Commonwealth, sports fans, and all Virginians,” Youngkin said at the conference. “Virginia is undoubtedly the best place to live, work, raise a family, and now watch basketball or hockey.”
The deal still needs to be approved by the governor and the Alexandria City Council, but all were in attendance at the press conference and no one expects any hurdles.
In the upcoming General Assembly session, legislators will be asked to approve the creation of a Virginia Sports and Entertainment Authority.
The $2 billion investment will be supported through bonds issued by the to-be-created authority, plus a $403 million investment by Monumental Sports & Entertainment. The bonds will be repaid through annual rent paid for the arena through a 40-year lease, plus parking revenues, naming rights and taxes.
The City of Alexandria will also contribute $56 million toward the construction of the performing arts venue in partnership with Monumental and $50 million toward underground parking development, according to the governor’s office.
“The arrival of this powerful entertainment and technology anchor to National Landing is a dramatic game changer that will enhance resident, employer, and visitor quality of life in the neighborhood for decades to come,” Matt Kelly, JBG Smith’s CEO, said in a statement.
Capital One Area opened in 1997 and Monumental’s ground lease is set to expire in 2027. Monumental owns the arena, but leases the land from the District. The two teams are expected to continue playing there until the new arena is ready in 2027.
Keith Loria can be reached at Kloria@commercialobserver.com.
