Monumental Sports & Entertainment founder and chairman Ted Leonsis is again going against the grain as he and the District of Columbia remake Capital One Arena.
Seven months after Leonsis and the parent company of the NBA’s Wizards, NHL’s Capitals, and WNBA’s Mystics struck a surprise renovation deal with the District and abandoned a proposed $2 billion arena and mixed-use development in Virginia, D.C. mayor Muriel Bowser and the council there are now advancing legislation to purchase Capital One Arena and lease it back to Monumental.
The $87.5 million deal will see Capital One Arena, which was privately owned as part of the Monumental portfolio, become publicly owned. Monumental will then lease the building back from the District, paying a minimum of $1.5 million until at least 2050, and it will retain venue operating rights. If lease extensions potentially going to 2070 are all exercised, Monumental’s annual lease payments will reach $3.3 million.
The deal, however, differs from many other arenas around the country where teams increasingly prefer to have full ownership of the venue, even if it was originally built with taxpayer funds.
The arena purchase price will be part of the District’s broader $515 million contribution toward the renovation of Capital One Arena. Leonsis and Monumental are committed to spending at least $285 million toward the project, which will dramatically remake the 27-year-old venue.
Monumental is fully behind the arena sale-and-leaseback plan, and the legislation codifies several months of negotiations following the original renovation deal struck in the spring. The Capital One Arena renovations are due for completion in 2028.
“This structure creates the most efficiency for the use of the public funds and have that go directly into the building,” Monica Dixon, Monumental chief administrative officer and president of external affairs, tells Front Office Sports. “It’s really about creating that efficiency and having the best operation possible of this public-private partnership.”
Bigger Vision
While the overall footprint of the remade Capital One Arena remains far smaller than the expansive project contemplated in the ultimately scuttled deal in Alexandria, Va., there are still plans to stretch beyond the current venue walls.
The overall D.C.-Monumental deal also includes an expansion of more than 200,000 square feet to the arena footprint into the neighboring Gallery Place, allowing Leonsis to get at least a portion of the additional space that was fundamental to the Virginia plan.
