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120 day deadline for two sides to reach lease agreement passed in July, negotiations are continuing
WASHINGTON — It was celebrated as the deal that would keep the Washington Capitals and Wizards from leaving the District. Now, WUSA9 has discovered months after the agreement was announced, DC Government and Monumental Sports and Entertainment owner Ted Leonsis have missed a deadline to get the contract finalized.
When Leonsis and DC Mayor Muriel Bowser held a press conference March 27th to announce the agreement for $515 million in city funded renovations to Capital One Arena in return for the Capitals and Wizards abandoning plans for a move to Northern Virginia, it was based on what’s called a “term sheet.”
The term sheet laid out the general framework of the deal. But it is non-binding.
And according to the term sheet, D.C. and Monumental had 120 days to reach agreement on signed lease agreement. That deadline passed in July.
The term sheet also says the deadline may be extended by 30 days if the two sides are negotiating in good faith.
If that 30-day extension also closes without an agreement the term sheet states: “The District agrees that all issues related to relocating the teams from the arena...may be submitted by Monumental Sports and Entertainment for sixty day arbitration.”
It is unclear whether Monumental plans to take the negotiations to arbitration if a deal is not reached. Arbitration is a process where a dispute over terms is decided by a third party.
A Monumental spokesperson downplayed the extended negotiations.
“Monumental Sports & Entertainment and District Officials have been working through the requisite paperwork around the agreement reached in March,” the spokesperson wrote in a statement to WUSA9. “All parties are moving forward in the spirit of collaboration on the final details.”
In a separate statement, the Office of the Deputy Mayor for Planning and Economic Development wrote WUSA9: “As outlined in the term sheet, the District and Monumental Sports and Entertainment are negotiating several agreements. Once finalized, those documents will be transmitted to the Council of the District of Columbia for approval.”
It is unclear what the spokesperson meant when referring to “several agreements” but the 14-page term sheet lays out a number of issues which have to be ironed out. They include:
- Police presence during events
- Luxury suites for DC Government and the DC Council
- How many Mystics games can be moved to Capital One every year from the city owned Entertainment and Sports Arena in Southeast
The two sides also must determine where Leonsis will build a new practice facility for the Wizards.
According to the term sheet within 30 days of the agreement being signed, Monumental will determine if “it is economically and operationally viable” to build the new Wizards practice facility within Gallery Place with owner approval.
If it is not, DC and MSE have an 18-month window to identify an alternative location owned or controlled by DC, including but not limited to the RFK site
If no DC controlled site is viable or available, MSE will have no restrictions, other than staying in DC, about where the new practice facility can go.
If this agreement is to move forward, the agreement must be signed by September when DC Council returns from recess.
Payments to Monumental are supposed to start at the beginning of the fiscal year in October according to the following schedule:
- $171.667 Mil 10/30/2024
- $171.667 Mil 10/30/2025
- $172.666 Mil 10/30/2026
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