Monumental, Youngkin announce deal to move Caps, Wizards to Virginia

“Virginia will not only be the best place to watch hockey to watch basketball, but it will be the best place to innovate and press the envelope in what we can do together,” Youngkin said.

As envisioned, Monumental’s facility would anchor a 12-acre mixed-use development in the heart of that area, part of a tentative agreement still subject to multiple state and local approvals. If Monumental ultimately moves to Virginia, it would mark a major economic development win for Youngkin and deal a blow to D.C.’s struggling downtown. The transition could also ease the path for Leonsis to take the company public, a possibility he has openly discussed.

As news of the pending announcement began to trickle out Tuesday, D.C. leaders made an 11th-hour attempt to retain the teams at Capital One Arena. The facility, built in 1997, is one of the older arenas in the NHL and NBA, and Leonsis has for years complained about the surrounding area and the city’s lack of investment in the building.

D.C. Mayor Muriel E. Bowser (D) and Council chair Phil Mendelson (D) late on Tuesday night announced a bill that, if passed, would offer Monumental $500 million in public financing toward the rehabilitation of Capital One Arena as well as an extension of its ground lease until the end of 2052. The company had asked for $600 million.

Monumental’s arrangement with Virginia does not prohibit it from continuing to negotiate with D.C. But Bowser said in a statement that the bill represented D.C.’s “best and final offer.”

“The proposed Monumental Campus represents a transformative step forward for our fans, our company, and the entire DMV region,” Leonsis said in a statement. “I have always believed there is a higher calling in sports — to unify our community, build a lasting legacy over multiple generations, and lift all our neighbors towards a shared sense of prosperity. Today, we deepen that commitment as we enter a phase of rapid expansion in service to our fans, employees, and partners.”

The $2 billion project has the potential to transform a swath of land adjacent to residential Alexandria long eyed for redevelopment. Renderings provided by Monumental show a 20,000–seat arena, practice facilities for the Wizards and Capitals, expanded esports facilities, a “fan plaza” and a performing arts venue in addition to Monumental’s global corporate headquarters and a Monumental Sports Network studio.

Under the deal, Bethesda-based developer JBG Smith would sell the Potomac Yard land it owns to a Virginia stadium authority, which would lease the property to Monumental. Two people briefed on the proposal said the authority would lease Monumental the complex for 35 years, not including construction. The new complex would be next to a recently opened Metro station, which is serviced by the Blue and Yellow Lines, and just south of the graduate “innovation campus” that Virginia Tech is set to open next year.

Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership, said the Potomac Yard area would become “a world-class entertainment district” active for 18 hours a day, 365 days a year.

The announcement Wednesday “is very much the first step in a lengthy process,” she said in an interview. “But I think it was important for the four partners to be able to share the vision and the framework for the agreement at this stage versus waiting and also wanting to be able to engage with the community.”

Local officials are eager to transform the former rail yard once floated as the potential site for a football stadium into something more. After Amazon’s decision to move to nearby Arlington County, boosters have pitched Potomac Yard as part of a tech-centric district they call “National Landing,” in hopes of luring companies and retailers — and tax revenue — to the area.

(Amazon founder Jeff Bezos owns The Washington Post, and the newspaper’s interim CEO, Patty Stonesifer, sits on the company’s board.)

More than 7 million square feet of new construction has been greenlighted for development in the neighborhood, but much of the land west of the Monumental complex is taken up by a strip-mall shopping center and a large parking area.

JBG Smith, which is also the developer for Virginia Tech and for Amazon’s second headquarters in nearby Arlington County, owns much of that land. Last year, it delayed plans to build two apartment buildings on the site where Monumental’s complex would be.

Monumental cannot move the Wizards and Capitals to Virginia until 2027 under the terms of its lease. The company in a news release said it plans to relocate the teams in 2028.

Leonsis has for several years complained about having a mortgage with unfavorable terms on Capital One Arena, which in 2016 he estimated cost him $36 million annually. He called it “the worst building deal in professional sports” and suggested that he could leave the city when he paid off the mortgage.

District leaders on Tuesday expressed concern about what the departure would mean for D.C. as the city is facing severe budgetary constraints and working to revitalize a struggling downtown. In addition to the request for arena renovation financing, city leaders face appeals from the Washington Nationals baseball team for upgrades and competition to host the next Commanders football stadium.

If the Wizards and Capitals move, Monumental could seek to transform Capital One into a “unique, flexible” arena that could host between 10,000 and 20,000 fans, with the WNBA Mystics team it also owns relocating there from its current home in Congress Heights as early as 2028, Monumental said in the release.

A Monumental official, speaking on the condition of anonymity to describe internal deliberations, said the company would like to host more live entertainment at the arena, but that the current team’s schedules eat up most weekend nights.

A senior JBG Smith executive said he couldn’t disclose the price at which JBG Smith would sell the arena tract of land to the Virginia stadium authority. He said JBG Smith would own and develop the adjacent tracts, which total 55 acres, according to the company.

The executive considered the potential addition of Monumental a “critically important next chapter in the overall revitalization and development growth” of National Landing. The Alexandria Economic Development Partnership said the deal would create about 30,000 jobs — though it is unclear how many of those are indirect or temporary, a common criticism that watchdog groups often make of such projections — and result in an economic impact of $12 billion in the coming decades. It is unclear how that was calculated, though AEDP officials indicated that millions could go toward affordable housing, rental assistance and other costs.

The tentative agreement, which was approved by a group of Virginia lawmakers in a closed-door session Monday, still requires approval from the full General Assembly and local officials, who Landrum expects will spend all of 2024 vetting the details.

It is unclear how much of a hurdle that will be in the General Assembly and in Alexandria City Council, though the proposal has already generated significant concerns from neighbors with questions about potential flooding and traffic impacts. “I have a feeling that this can be a big nuisance near us in a place it seems not to be a perfect fit. It is just odd,” said Rafael Lima, a homeowner who lives on the southern end of Potomac Yard and was active in lobbying the city over the new Metro station.

Two people familiar with Virginia’s proposal said it includes about $200 million for transportation improvements to support the new arena, and conversations are underway about expanding capacity at the Potomac Yard Metro station, potentially including adding a ramp that would connect the station directly to the proposed arena.

Youngkin has pitched several House and Senate Democrats on the project, according to two people familiar with his efforts, who spoke on the condition of anonymity to share private conversations.

That outreach — notable for a governor who has not had warm relationships with many Democrats and does not regularly lobby legislators of either party — started immediately after Republicans lost control of the House of Delegates and failed to flip the Senate in the Nov. 7 General Assembly elections, the two people said.

With Democrats leading both chambers, Youngkin will need them to pass legislation creating a sports authority to oversee financing of the project and approve the additional transportation funds.

Several prominent Democratic state lawmakers declined to comment on the project Tuesday, saying they wanted to wait until Youngkin formally unveils it. But the few who spoke signaled they were not yet on board.

“I’ve been told this deal will use no state $$ & no impact on debt capacity of the City of Alex or Virginia. Obviously this is a trust but verify situation, needs to be a true win-win to earn my support,” Del. Marcus Simon (D-Fairfax) wrote on X, formerly Twitter.

State Sen. L. Louise Lucas (D-Portsmouth), incoming chairwoman of the powerful Senate Finance and Appropriations Committee, framed the project as a bargaining chip for regional or Democratic priorities.

“While some people want sports stadiums … I want tolls to disappear from Hampton Roads *and* I want recreational sale of marijuana,” she tweeted. “Guess we will have to find compromises this session.”

Laura Vozzella, Meagan Flynn, Michael Brice-Saddler, Jonathan O’Connell and Laris Karklis contributed to this report.