.png "D.C. plans to buy Capital One Arena for $87.5M, promising exciting renovations! Discover how this affects sports fans and the local economy!")
D.C. Mayor Muriel Bowser has proposed a plan for the city to buy Capital One Arena from Monumental Sports & Entertainment for $87.5 million. The city would then lease it back to the company, which owns the Washington Wizards, Capitals, and Mystics, through 2050.
This idea came from a deal made in March between Monumental’s CEO, Ted Leonsis, and Bowser to keep the NBA and NHL teams in D.C. The arena will be renovated using $515 million in public funds between 2025 and 2027.
As part of the lease, a nearby alley next to Sixth Street NW, which is near the arena and Gallery Place (a property bought by a partnership earlier this year), will also be included. Monumental is expected to invest $372.5 million into the arena renovations, including the $87.5 million from the city’s purchase. Monumental will cover any extra costs that go over budget.
The plan, which still needs approval from the D.C. Council, would make the arena and alley exempt from certain taxes, including real estate, leasehold, deed, and transfer taxes. Monumental will make an initial payment and then pay between $1.5 million and $2.3 million annually for the lease, with options to extend the lease for up to 20 more years.
If D.C. ever raises sales tax just for the arena, rent would be reduced accordingly. In a letter to the council, Bowser said the arena project is expected to generate over $1 billion in economic activity, create 4,900 construction jobs, and bring in $21 million in new tax revenue.
Leonsis also shared that Monumental has agreed with trade unions and will start construction as soon as the council approves the deal. This agreement came after Monumental’s plans to build a new arena in Virginia fell through.
The renovation will make the arena more spacious, adding about 200,000 square feet, for a total of 1.2 million square feet. There will also be a focus on using new technology to improve fan experience, such as better concessions. Monumental wants to make every event at the arena feel special and memorable for fans.
Monumental has also started signing deals with “founding partners” to support the modernization of the arena, with United Airlines being the first to sign on. The renovations are expected to take about three years to complete.
The arena, originally called the MCI Center, was built in 1997 by the former owner of the Wizards and Capitals, Abe Pollin, who privately financed the $200 million project. The District helped by paying for land and Metro station improvements. Leonsis gradually bought into Pollin’s sports holdings starting in 1999, eventually taking full ownership after Pollin’s death in 2009.
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