DC Council votes to spend $515 million to modernize Capital One Arena

The D.C. Council voted unanimously Tuesday to spend $515 million over the next three years to help the owner of the Washington Wizards and Capitals. Ted Leonsis modernizes and expands Capital One Arena After an agreement reached last week by Leonsis and Mayor Muriel E. Bowser to keep teams playing on city grounds, the company entered into some of the surrounding areas.

The vote is the first step toward a renewal project that city leaders hope will transform the Gallery Place and Chinatown neighborhoods into an entertainment district that could boost the city's struggling economy. Council Member Vincent C. Gray (D-Ward 7) was absent for the vote.

This also It comes a day before Bowser (D) is expected to submit his budget for FY 2025 to the Council. Lawmakers, who are preparing for cuts to reduce the potential budget deficit, have emphasized that money for the arena renovation will come from the district's capital budget, not the cash-strapped operating budget.

“We are grateful to the Council for passing legislation that creates a true partnership between the District and Monumental Sports to revitalize the city in an integrated way for our fans and community,” Monumental said in a statement on social media after Tuesday's vote. Builds partnerships.” “Our shared vision for a transformational entertainment district that is a destination for neighbors and visitors will ensure the vibrancy of the city for years to come.”

The council's move to allocate funds for the arena's renovation and expansion is separate from a non-binding 14-page term sheet detailing more specific elements of Bowser and Lyonnais' agreement, which was signed by the deputy commissioner for planning and economics. It was the focus of a council breakfast meeting Tuesday with the mayor. Vikas Nina Albert.

The terms of the tentative agreement, a copy of which was obtained by The Washington Post on Monday afternoon, are intended to address Leonsis' concerns about public safety around the arena as well as his desire to grow the footprint of his company, Monumental Sports. Goes to significant lengths. & Entertainment. But some of its provisions raised initial concerns from lawmakers who wanted to ensure the district got an adequate return on its investment.

Under the temporary agreement, which That could change as DC and Monumental continue to negotiate, Lyons will be able to use $15 million in public funds that were added to the city's original $500 million proposal from December to improve the alley between Capital One Arena and Gallery Place Was. The term sheet details perks for Lyonesse ranging from security enhancements to parking incentives, and also includes a clause that would exempt his company from any future taxes aimed at supporting other professional sports franchises .

Council member Kenyon R. McDuffie (I-At Large) told Albert that he was concerned that some of the provisions in the term sheet might require the city to bear additional costs, questioning whether the district had received strong negotiations during Lyonnais's original plan. Should be in position. Moving the capitals and mages to Northern Virginia led to separation.

“We're going to create a process that allows us to ask some questions to work through those details, recognizing that we want the memorial to be here, but we're also involved in everything in the process and the kitchen. Don't want to leave the sink,” McDuffie said.

In response, Albert insisted that the terms were non-binding. DC and Monumental are expected to begin working toward a final term sheet in the next 45 days; According to the tentative terms, any agreement would be subject to approval from the NBA and NHL.

He called the document a “guidepost” for the city that would help with Monumental's expansion while executing a shared vision to create an entertainment district – strengthening area businesses and tax revenue for the city in the process. Some components of the deal are likely to come back to council for approval, he said — including any significant amendments to the land lease with monuments or conditions that would require legislative changes.

Council Member Charles Allen (D-Ward 6), speaking on a proposal to exempt Monumental from any tax that would support other pro sports franchises, questioned whether it would insulate a large business from a future hypothetical tax. It was the right move to do. “Let's say, for fun, someone is interested in another stadium, and they use the ballpark tax financing mechanism. “Are we saying Monumental won’t have to pay this?” Alan asked.

He noted that Capital One Arena patrons already have to pay additional sales taxes to help pay off the bonds used to upgrade the arena in 2007: “Right, Monumental specifically pays a lot of taxes. is sensitive to its patrons paying,” Albert said, reiterating that the terms have not been fully worked out. “That's why we're keen to find out.”

Under the agreement, if possible, Monumental will aim to build a new practice facility for the Wizards in the Gallery Place office tower – a neighboring retail center that has been half-empty for months. If that doesn't work out, the company could explore building practice facilities at other D.C. locations, including the RFK Stadium complex.

Albert said Monumental plans to begin construction on improvements to the arena in the summer of 2025, during the offseason for the Capitals and Wizards, and over the next two summers to prevent interruptions in gameplay for either team. The work has to continue. And in another benefit for Monumental, under the term sheet, the DC will expedite permitting approvals during the company's renovation projects and appoint a government point person to handle its needs.

Transforming the area into an entertainment district could lead to new restrictions on vending, noise and loitering. The agreement between the city and Lyonesse calls for the creation of one, following the council's vote to create a controversial “loitering anti-drug-free zone” as part of a major public safety bill this year. Drug-free zone around the arena. The DC will also be required to make a public safety plan before each event at the arena and also dedicate 17 officers for patrolling for two hours before and after the event.

Council Member Zachary Parker (D-Ward 5) asked about the potential impact of this provision on the city's already stressed police department and how the drug-free zone would work if it were temporary under current law. Albert said details were yet to be worked out, but speaking to reporters he said expectations for police staff were in line with events held at National Park and Audi Field.

In exchange for some of the District's offerings, Monumental would be required to do community projects like building a new playground and basketball courts or a hockey rink, while preserving jobs for DC residents on the renovation project and doing something to help locals. Must submit to contract requirements. Small businesses.

Council Member Brooke Pinto (D-Ward 2) argued that although some lawmakers were wary of the city's negotiating position, the investment would ultimately benefit the city as a whole. “I don't want anyone to know that this is not a traditional kind of win-lose environment,” she said. “Making this investment as a district is really beneficial to us, not only for the return on investment that we're going to get in tax revenue, but also for the experiences that we're creating for residents and businesses.”

Allen later argued that the city should have moved forward more quickly and cohesively with plans to modernize the arena, noting that lawmakers were given copies of the term sheet less than 24 hours before Tuesday's vote. Had gone. He agreed with McDuffie that there would likely be more costs to the city related to the project, citing a temporary provision to expedite Monumental's application for a clean-energy financing program that would complement the $515 million investment.

“It's a program that has a limit on what's available each year. So now every dollar we're sending to Monumental for the grounds is a dollar we're not investing in affordable housing elsewhere,” Allen said.

The council advanced Tuesday's appropriations bill on an emergency basis without any formal opportunity for public comment. Facing questions at a Monday news briefing about the transparency of the process for investing $515 million of taxpayers' money, Chairman Phil Mendelson (D) defended the process: He said residents can provide their input via email or phone. Got an opportunity to inform. The calls have been coming to his office since December, when he and Bowser first pitched Lyonesse a half-billion-dollar public financing package.

He said residents can also provide public comment on the capital budget this spring.

The legislation set off a tumultuous legislative meeting, which was interrupted at various points by three separate protests over unrelated issues. Protesters from the Save Chinatown Solidarity Network came to protest the appropriation for the memorial, saying that if the District had half a billion dollars to help a billionaire sports team owner upgrade the arena, the city should pay the remaining several hundred thousand Chinese More needs to be done to invest in people. Chinatown residents and the few remaining businesses that support them.

Another group of protesters disrupted the meeting to protest a bill that would expand the District's use of project labor agreements – agreements made with labor organizations that establish the terms and conditions of employment for a specific construction project. Are – apply them to contracts worth at least $50 million. Versus $75 million.

Half an hour later, protesters calling on the Council to support a ceasefire in Gaza were escorted out of the chamber into the hallway where they shouted, “Blood is on your hands!” and “Cease fire now!” So loudly that the MPs stayed put for several minutes.

He tried to continue while the chanting could still be heard in the hall.

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