The Washington Capitals and Washington Wizards will not be moving out of Washington DC if the city’s attorney general, Brian Schwalb, has anything to do with it.
After Virginia lawmakers nixed a proposed $2 billion sports and entertainment district in Arlington’s Potomac Yard, Schwalb has penned a stern letter to Monumental Sports & Entertainment outlining that the city believes the two teams cannot legally be moved out of the district until 2047 under current contract terms.
MSE has previously indicated their faith that their current deal allows them to pay off the bond on Capital One Arena’s lease early and move the teams if they so wish. Doing so would allow a 2027 move to Alexandria or even potentially a site in Maryland which Ted Leonsis recently discussed with Governor Wes Moore.
Schwalb and the DC city government disagree with that assertion. In his letter, Schwalb cites discussions from 2007 when the city publicly financed $50 million in updates and improvements to the arena. He asserts that those funds were granted expressly with the terms of the 2047 lease agreement baked in.
Here is Schwalb’s exact wording provided by DC News Now’s Ben Dennis:
The Council expressly conditioned that public financing on DCALP’s commitment to extend the original ground lease for an additional 20 years, thereby ensuring the District and its taxpayers that the Wizards and the Capitals would continue to play their home games at the Arena through 2047. The July 2007 legislation did not authorize DCALP to extinguish or revoke the lease extensions upon prepayment of the outstanding bond debt at some unknown time in the future. Nor did any DCALP representative or District official suggest such a possibility during the legislative process.
Schwalb also claims that MSE’s entire preliminary negotiation period with Virginia broke previous promises they had made with DC. According to his letter, if MSE intended to move the teams, they were supposed to first notify DC of their intent, negotiate with DC for a period of six months, refrain from talks with anyone else during those six months, give DC the material terms of the agreement with the future landing spot of the teams, and give DC 90 days to make a competing offer.
Schwalb says that MSE has “violated these contractual provisions.” In his next paragraph following that statement, Schwalb makes it clear that if MSE continues to explore a move of their teams out of DC, the city will have no choice but to pursue legal claims against the company. However, he expressly states his desire to avoid that route and mentions that the $500 million offer in public financing from the city’s government remains on the table.
Much of the letter focuses on Schwalb’s urging of MSE to meet with DC officials so that they can come to a mutually beneficial agreement that suits both MSE and the city. After the proposed move completely stalled out in the Virginia state senate and a move to Maryland was deemed highly unlikely, MSE may be more willing to come back to the table.
MSE originally asked for $600 million from DC. Mayor Muriel Bowser called the half-billion the city’s best and final offer. The new negotiations could be centered around seeing if that could change.
