MURIEL BOWSER
MAYOR
October 18, 2024
The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
John A. Wilson Building
1350 Pennsylvania Ave. NW, Suite 504
Washington, DC 20004
Dear Chairman Mendelson:
I am pleased to introduce the "Downtown Arena Revitalization Act of 2024" for your approval of the
development and financing agreement for the redevelopment of the Capital One Arena, approval of the
purchase and sale agreement for the Capital One Arena, and approval of a lease agreement.
The renovation and modernization of the Capital One Arena represents a major commitment and investment
by both the District and Monumental Sports and Entertainment (MSE) in Downtown DC. The total direct
public and private investment in construction is $800 million; om economic impact study estimates the total
economic activity of this project will be over $1 billion. The project is expected to result in 4,900
construction jobs and $21 mill ion in new tax revenue over the three-year construction period.
The surrounding neighborhood will also benefit directly from a modernized building exterior, new
entrances, and improved public realm that are worthy of the vision set for the future of Downtown DC.
MSE has been working closely with the Gallery Place/Chinatown Task Force and will increasingly engage
local businesses, institutions and residents to ensure a beautiful, vibrant and lasting exterior and streetscape
and this project is an investment in the continued vibrancy of D0wntown and growth of the DC economy.
In March of this year, the DC Council and I shared' the"stage with Mr. Leonsis and Monumental Sports and
Entertainment announcing that we had reached an,a greement and had a plan that would allow the teams to
expand as needed in Washington, DC. Subsequently, the DC Council voted unanimously to fund $515
million for the renovation and modernization ofthe Capital One Arena. MSE and we are now ready to
execute the agreements before you and I urge the DC Council to pass the "Downtown Arena Revital1zation
Act of 2024" this Council period so that we may continue to focus on the bright future of the District of
Columbia!
Enclosures
 Dear Mayor Bowser:
Monumental Sports and Entertainment (MSE) agrees to the terms contained within the
attached Amended and Restated Ground Lease, Development and Financing Agreement,
and Purchase and Sale Agreement and requests that you transmit the bill and documents
to the DC Council for their approval of our partnership agreements.
With DC Council approval, MSE will be in Washington, DC through 2050, with five renewal
options of four years each, for a potential additional twenty years beyond 2050, if
exercised. An evolution of the deal since the Term Sheet is that the District and MSE have
determined that it is most beneficial for the District to own the Capital One Arena building
and lease it back to MSE. Under this structure, MSE will continue to operate and maintain
the building consistent with its operations over the last 27 years. Finally, the Development
and Financing Agreement provides the conditions under which the District will provide the
public funding for the renovation of the Capital One Arena.
The $800 million combined public and private investment for this transformational project
will modernize both the Capital One Arena and portions of the area directly adjoining the
arena known as Gallery Place. Of that total, the District is providing $515 million (including
the purchase price for the building, which will be invested in the project) and MSE has
committed to a minimum of $285 million and taken on responsibility for any cost overruns.
As part of this project, MSE will meet the city’s requirements for 35% Certified Business
Enterprises (CBE’s) participation, and we are setting an ambitious goal to go beyond
requirements to achieve 50% CBE engagement. We also have reached a Memorandum of
Understanding with the building trades and will enter into a Project Labor Agreement. MSE
will begin construction immediately upon passage by the Council.
Last but not least, Monumental Sports is committed to the health and vibrancy of this
arena, neighborhood, and city and even prior to completing these documents, I announced
the most ambitious charitable effort the company has ever undertaken- District of
Play. This multi-million-dollar investment is designed to break down the barriers that
prevent kids in D.C. from playing sports by providing safe play spaces, empowering players
and engaging parents, coaches and the community. Monumental’s plan is to transform
access and opportunity in youth sports as Capital One Arena undergoes its own
transformation.
Thank you for your partnership and I look forward to working with you and the DC Council
to accelerate DC’s Comeback and secure DC as the media, sports and entertainment
capital!
Sincerely,
Ted Leonsis
MONUMENTALSPORTS.COM
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#P~
Chairman Phil Mendelson
at the request of the Mayor
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6 A BILL
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10 IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
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15 To approve the development and financing agreement for the redevelopment of the downtown
16 arena; approve an agreement for the disposition by lease of certain real prop~rty owned
17 by the District government for the redevelopment and operation of the downtown arena;
18 approve a purchase and sale agreement for the downtown arena; authorize the granting of
19 certain easements related to the downtown arena property; authorize airspace leases
20 associated with the downtown arena; continue and provide for property tax abatements
21 and deed transfer and recordation tax exemptions for the downtown arena; and authorize
22 the issuance of rules to provide for additional signage on the downtown arena.
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24 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
25 act may be cited as the "Downtown Arena Revitalization Act of2024".
26 Sec. 2. Approval of development and financing agreement, amended and restated lease,
27 and purchase and sale agreement for the downtown arena.
28 (a) Notwithstanding the provisions of the Procurement Practices Reform Act of 2010,
29 effective April 8, 2011 (D.C. Law 18-371; D.C. Official Code§ 2-351.01 et seq.), An Act
30 Authorizing the sale of certain real estate in the District of Columbia no longer required for
31 public purposes, approved August 5, 1939 (53 Stat. 1211; D.C. Official Code§ 10-801 et seq.),
32 the Verizon Center Sales Tax Revenue Bond Approval Act of 2007, effective July 12, 2007
33 (D.C. Law 17-12; 54 DCR 5151), the Public-Private Partnership Act of 2014, effective March
34 11, 2015 (D.C. Law 20-228; D.C. Official Code§ 2-271.01 et seq.), and any other law, and, as
35 applicable, pursuant to section 451 of the District of Columbia Home Rule Act, approved
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36 December 24, 1973 (87 Stat. 803; D.C. Official Code § 1-204.51), the Council approves and the
37 Mayor may enter into and effectuate the provisions of the:
38 (1) Development and Financing Agreement between District of Columbia and DC
39 Arena L.P., regarding the downtown arena (“Development and Financing Agreement”),
40 submitted by the Mayor to the Council on October 18, 2024;
41 (2) Amended and Restated Lease by and between the District of Columbia and
42 DC Arena L.P., regarding the downtown arena (“Amended and Restated Lease”), submitted by
43 the Mayor to the Council on October 18, 2024; and
44 (3) Agreement for the Purchase and Sale of Real Property (Improvements Only)
45 between District of Columbia and DC Arena L.P., regarding the downtown arena (“Purchase and
46 Sale Agreement”), submitted by the Mayor to the Council on October 18, 2024.
47 (b) Notwithstanding any other provision of law, the Mayor may take such actions as are
48 appropriate to implement the Development and Financing Agreement, Amended and Restated
49 Lease, and Purchase and Sale Agreement.
50 (c) Notwithstanding the lead-in text of subsection (a) of this section and the dollar value
51 of government assistance received pursuant to the Development and Financing Agreement, the
52 following statutory provisions shall apply to the Development and Financing Agreement:
53 (1) Sections 2, 4(a), (b), (c), (e)(1), (1C), (2), (3), (4), and (5), and 4a of the First
54 Source Employment Agreement Act of 1984 (“First Source Act”), effective June 29, 1984 (D.C.
55 Law 5-93; D.C. Official Code §§ 2-219.01, 2-219.03(a), (b), (c), (e)(1), (1C), (2), (3), (4), and
56 (5), and 2-219.03a); and
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57 (2) Section 5 of the Amendments to An Act To Provide for Voluntary
58 Apprenticeship in the District of Columbia Act of 1978, effective March 6, 1979 (D.C. Law 2-
59 156; D.C. Official Code § 32-1431).
60 Sec. 3. Authority to grant easements over the downtown arena property.
61 Notwithstanding the provisions of An Act Authorizing the sale of certain real estate in the
62 District of Columbia no longer required for public purposes, approved August 5, 1939 (53 Stat.
63 1211; D.C. Official Code § 10-801 et seq.), and any other law, the Mayor may grant easements
64 over Lot 47 in Square 455 and/or Lot 884 in Square 454 to the owner of property located in
65 Square 454 or 455, to the Washington Metropolitan Area Transit Authority, to the lessee of Lot
66 47 in Square 455, or to such other persons as the Mayor determines appropriate to effectuate a
67 purpose of the Development and Financing Agreement, Amended and Restated Lease, or
68 Purchase and Sale Agreement.
69 Sec. 4. Airspace lease for the downtown arena; exemption from taxation.
70 (a) Notwithstanding the provisions of the District of Columbia Public Space Rental Act,
71 approved October 17, 1968 (82 Stat. 1156; D.C. Official Code § 10-1101.01 et seq.), sections
72 4(2) (but only to the extent shown on plans the Mayor has approved pursuant to the Development
73 and Financing Agreement), (3), (4), (5), and (6), 5(1), (2), (3) (but only to the extent the Mayor
74 has otherwise approved plans pursuant to the Development and Financing Agreement), (4), and
75 (5) (but only with respect to the requirement to submit a scale model), 7 (but only with respect to
76 zoning laws and regulations), and 10 of the District of Columbia Public Space Utilization Act,
77 approved October 17, 1968 (82 Stat. 1166; D.C. Code §§ 10-1121.03(2) (but only to the extent
78 shown on plans the Mayor has approved pursuant to the Development and Financing
79 Agreement), (3), (4), (5), and (6), 10-1121.04(1), (2), (3) (but only to the extent the Mayor has
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80 otherwise approved plans pursuant to the Development and Financing Agreement), (4) and (5)
81 (but only with respect to the requirement to submit a scale model), 10-1121.06 (but only with
82 respect to zoning laws and regulations), and 10-1121.09), and any other law, the Mayor may
83 lease the airspace adjacent to Lot 47 in Square 455 and Lot 884 in Square 454, to DC Arena L.P.,
84 or its designee, on such terms as the Mayor deems appropriate, at no other rent or fee, for so long
85 as the lease for the real property approved by section 2(a) of the Downtown Sports Arena
86 Revitalization Act of 2024, as may be amended from time to time, remains in effect; provided,
87 that if construction within such airspace is not subject to the approval of the National Capital
88 Planning Commission pursuant to section 5 of An Act providing for a comprehensive
89 development of the park and playground system of the National Capital, approved July 19, 1952
90 (66 Stat. 781; D.C. Official Code § 2-1004), then, notwithstanding the foregoing, section 5(2)
91 and, in its entirety, section 7 of the District of Columbia Public Space Utilization Act, approved
92 October 17, 1968 (82 Stat. 1166; D.C. Code §§ 10-1121.04(2) and 10-1121.06), shall apply to a
93 lease entered into by the Mayor under this subsection.
94 (b) Section 8 of the District of Columbia Public Space Utilization Act, effective October
95 17, 1968 (82 Stat. 1167; D.C. Official Code § 10-1121.07), is amended as follows:
96 (1) Paragraph (1) is amended by striking the phrase “; or” and inserting a
97 semicolon in its place.
98 (2) Paragraph (2) is amended by striking the period at the end and inserting the
99 phrase “; or” in its place.
100 (3) A new paragraph (3) is added to read as follows:
101 “(3) Leased pursuant to section 4(a) of the Downtown Arena Revitalization Act of
102 2024.”.
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103 Sec. 5. Continued exemption of the downtown arena from real property and possessory
104 interest taxes; downtown arena deed transfer and recordation tax exemptions for transfers with
105 the District government.
106 (a) Section 47-1002 of the District of Columbia Official Code is amended as follows:
107 (1) Paragraph (32)(B) is amended by striking the phrase “; and” and inserting a
108 semicolon in its place.
109 (2) Paragraph (33)(C)(iii) is amended by striking the period at the end and
110 inserting the phrase “; and” in its place.
111 (3) New paragraphs (34) and (35) are added to read as follows:
112 “(34) The real property (and any improvements thereon) described as Lot 47 in
113 Square 455 so long as the Land Disposition Agreement—Ground Lease, by and among the
114 District of Columbia Redevelopment Land Agency, the District of Columbia, and DC Arena,
115 L.P., dated as of December 29, 1995, and recorded with the Recorder of Deeds on January 5,
116 1996, as instrument number 9600001285, as may be amended from time to time, remains in
117 effect; and
118 “(35) The real property (and any improvements thereon) described as Lot 47 in
119 Square 455 and Lot 884 in Square 454 (and any adjacent air space leased pursuant section 4(a) of
120 the Downtown Sports Arena Revitalization Act of 2024), so long as the lease for such real
121 property approved by section 2(a) of the Downtown Sports Arena Revitalization Act of 2024, as
122 may be amended from time to time, remains in effect.”.
123 (b) Section 47-1005.01 of the District of Columbia Official Code is amended by adding a
124 new subsection (c-2) to read as follows:
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125 “(c-2) This section shall not apply to the real property (and any improvements thereon)
126 described as Lot 47 in Square 455 so long as the Land Disposition Agreement—Ground Lease,
127 by and among the District of Columbia Redevelopment Land Agency, the District of Columbia,
128 and DC Arena, L.P., dated as of December 29, 1995, and recorded with the Recorder of Deeds
129 on January 5, 1996, as instrument number 9600001285, as may be amended from time to time,
130 nor shall it apply to the real property (and any improvements thereon) described as Lot 47 in
131 Square 455 or Lot 884 in Square 454 (or to any adjacent air space leased pursuant section 4(a) of
132 the Downtown Sports Arena Revitalization Act of 2024) so long as the lease approved by section
133 2(a) of the Downtown Sports Arena Revitalization Act of 2024, as may be amended from time to
134 time, remains in effect.”.
135 (c) Section 47-902 of the District of Columbia Official Code is amended by adding a new
136 paragraph (29) to read as follows:
137 “(29) Transfers with respect to the real property (and any improvements thereon)
138 described as Lot 47 in Square 455 and Lot 884 in Square 454 (and any adjacent air space leased
139 pursuant section 4(a) of the Downtown Sports Arena Revitalization Act of 2024), to the extent
140 such transfer is a transfer between the District and DC Arena L.P., or its designee, pursuant to
141 the lease or purchase and sale agreement approved by sections 2(a) of the Downtown Sports
142 Arena Revitalization Act of 2024, as may be amended from time to time, or a lease authorized by
143 section 4(a) of the Downtown Sports Arena Revitalization Act of 2024.”.
144 (d) Section 302 of the District of Columbia Deed Recordation Tax Act, approved March
145 2, 1962 (76 Stat. 11; D.C. Official Code 42-1102), is amended as follows:
146 (1) Paragraph (35) is amended by striking the phrase “; and” and inserting a
147 semicolon in its place.
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148 (2) Paragraph (36)(B) is amended by striking the period at the end and inserting
149 the phrase “; and” in its place.
150 (3) A new paragraph (37) is added to read as follows:
151 “(37) Deed with respect to the real property (and any improvements thereon)
152 described as Lot 47 in Square 455 or Lot 884 in Square 454 (and any adjacent air space leased
153 pursuant section 4(a) of the Downtown Sports Arena Revitalization Act of 2024), to the extent
154 such deed conveys an interest between the District and DC Arena L.P., or its designee, pursuant
155 to the lease or purchase and sale agreement approved by section 2(a) of the Downtown Sports
156 Arena Revitalization Act of 2024, as may be amended from time to time, or a lease authorized by
157 section 4(a) of the Downtown Sports Arena Revitalization Act of 2024.”.
158 (e)(1) Section 3 of the Arena Tax Amendment Act of 1994, effective September 28, 1994
159 (D.C. Law 10-189; 41 DCR 5357), as amended by section 30 of the Technical Amendments Act
160 of 2006, effective March 2, 2007 (D.C. Law 16-191; 53 DCR 6794), and section 7021 of the
161 Verizon Center Recordation Tax Clarification Amendment Act of 2008, effective August 16,
162 2008 (D.C. Law 17-219; 55 DCR 7670), is repealed.
163 (2) This subsection shall apply as of the effective date of the Downtown Sports
164 Arena Modernization and Downtown Revitalization Act of 2024.
165 Sec. 6. Authority to amend signage regulations.
166 Section 101.19.16 of Appendix N of Title 12A of the District of Columbia Municipal
167 Regulations is amended by striking the phrase “, upon review and active approval by the
168 Council” and inserting the phrase “. The amendments to the rules may include, but need not be
169 limited to, provisions authorizing additional outdoor signs, visuals, digital displays, and static
170 canvas displays placed on the Verizon Center. Rules proposed to be issued under this section
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171 shall be submitted to Council for a 45-day period of review. If the Council does not approve or
172 disapprove the proposed rules, by resolution, within the 45-day period, the rules shall be deemed
173 approved.” in its place.
174 Sec. 7. Fiscal impact statement.
175 The Council adopts the fiscal impact statement in the committee report as the fiscal
176 impact statement required by section 4a of the General Legislative Procedures Act of 1975,
177 approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a).
178 Sec. 8. Effective date.
179 This act shall take effect following approval by the Mayor (or in the event of veto by the
180 Mayor, action by the Council