After a whirlwind year for Washington, D.C.’s Capital One Arena, officials have gone from nearly losing both the city’s pro basketball and hockey teams less than a year ago, to attempting to buy their home arena outright. 

District Mayor Muriel Bowser submitted legislation to the D.C. Council to acquire the arena for $87.5 million, as part of the city’s commitment toward spending $515 million to renovate the arena and part of the surrounding area over the next several years. NBC4 first reported the news of the legislation on Sunday. 

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Under the bill, D.C. would buy the arena from Monumental Sports & Entertainment, which also owns the Wizards and Capitals, and then lease it back to Monumental for $1.5 million per year. The lease would run until 2050 with five four-year extension options. If all of those renewal options are greenlighted, rent will increase to $3.3 million during the final renewal term. D.C. already owns the land on which the arena is built. 

Monumental said that it would also spend $285 million toward the improvements, along with the $87.5 million arena sale proceeds, making the renovation budget a cool $800 million in public and private funds.

“We know that when our downtown does well, our city does well,” Bowser said in a statement Monday. “This catalytic investment is an investment in our residents and businesses in all eight wards.”

Bowser’s plan to buy the arena extends a stunning reversal in good fortune since Monumental founder and Chairman Ted Leonsis and Virginia Gov. Glenn Youngkin announced in December that the teams would move across the Potomac, once the company’s ground lease in D.C. expired in 2027. Yet Virginia’s General Assembly ultimately opted not to approve the plan, which would’ve cost some $1.5 billion in taxpayer funds toward the construction of a 9 million-square-foot entertainment district in Alexandria’s Potomac Yard neighborhood. 

Bowser and Leonsis quickly negotiated the $515 million deal in the aftermath. The deal will include 200,000 square feet of “newly programmed space” at the arena and at the adjacent Gallery Place building, a new practice facility for the Wizards, safety and logistics upgrades, expedited permitting processes, improvements to the alley joining the arena to the rest of the Gallery Place neighborhood, and other terms. 

Bowser’s team and Monumental on Monday said that the improvements were expected to be finished in time for the 2027-2028 sports season.

“The delivery of a brand-new arena marks the next significant investment Monumental Sports is making in the revitalization of Downtown D.C., and we will build a best-in-class experience for fans, a world-class destination facility for athletes, and continue to serve as a downtown anchor for economic vitality,” Leonsis said in a statement. “Our vision for a wholly reimagined sports and entertainment destination will be ambitious, reflective of our community, and designed to ‘wow’ our most ardent supporters as well as casual fans.”

Nick Trombola can be reached at ntrombola@commercialobserver.com.