Washington, D.C., Council approves arena deal

The Washington, D.C., City Council has given the green light to funding for the city's baseball stadium, while also laying out hiring goals for the $515-million renovation to Capital One arena, home to the city's professional hockey and basketball teams.

"By modernizing this key venue, we will not only attract more events and visitors but also stimulate local businesses and create a vibrant atmosphere in the area," said D.C. Mayor Muriel Bowser. "Our agreement stipulates that at least 40% of contracts will be awarded to certified business enterprises, with an ambitious goal of reaching 50%."

Capital One arena hosts the National Hockey League's, Washington Capitals and the National Basketball Association's Washington Wizards.

This week's approval by the City Council officially provides a multi-pronged solution to keep the two teams playing in D.C.'s Chinatown neighborhood as the city will buy the arena from its current owner, Monumental Sports & Entertainment for $87.5 million.

The city will lease the arena to Monumental, who has agreed to kick in at least $285 million for the renovation project. The plan also calls for revitalizing the adjacent Gallery Place shopping mall that suffered a knockout blow during the pandemic.

The deal hit headwinds in November over the city's labor requirements regarding the hiring of local firms and labor union regulations. The construction project is expected to last three years and create nearly 5,000 jobs.

The city will issue new debt to pay for its end of the bargain which has already been approved by the Office of the Chief Financial Officer.

The teams are required to play their games in Washington through 2050. An attempt to move the teams to a built-from-scratch $2 billion public private partnership arena complex in Alexandria, Virginia failed earlier this year.

The City Council also wrapped up plans to create a dedicated funding stream for maintaining Nationals Park, home to Major League Baseball's Washington Nationals. The deal, which has been in the works since last year will siphon off extra money not being used for debt service.

Nationals Park was built in 2008 for a total cost of $783.5 million which included $535 million in municipal bonds. According to the OCFO revenues have exceeded debt service payments since 2016.

The city has also been trying to get control of the currently vacant RFK stadium site adjacent to the Capitol Hill neighborhood. An eventual renovation could coax the National Football League's Washington Commanders out of their current home in Landover, Maryland.

The Commanders, formerly known as the Redskins, played at RFK stadium from 1961 ? 1996. RFK sits on federal land and is currently controlled by the National Park Service. The feds are leasing the stadium to the district for free.

Moving the site to district control requires an act of Congress. The ball moved forward in November as legislation to transfer ownership passed the U.S. Senate Energy and Natural Resources Committee by a 17-2 vote.

The deal was also approved in the House which lands it on the Senate floor during the current lame duck session.

Washington is proposing the renovation of the 174-acre site that would include an ambitious mixed-use commercial and residential plan that is forbidden under the current lease arrangement.