YES VIRGINIA: An illustration shows a proposed arena and performing arts center at Potomac Yard in Alexandria, Virginia, sitting next to Reagan National Airport. (Courtesy Monumental Sports)

Officials feel DMV can accommodate two large arenas

Monumental Sports & Entertainment chairman and CEO Ted Leonsis announced Wednesday that the company has reached a framework of an agreement to develop a new big league arena tied to a massive entertainment district in Alexandria, Virginia.

The NBA’s Washington Wizards and NHL’s Washington Capitals, pending legislative approval and completion of documents for a public-private partnership, would relocate across the Potomac River from Capital One Arena, their home since 1997. Monumental Sports owns both teams and the arena in Washington, D.C.

The agreement for Virginia is between Monumental Sports, the Commonwealth of Virginia, the city of Alexandria and JGM Smith, the developer in charge of forming the entertainment district.

The total development, valued at $2 billion, is proposed for Potomac Yard, one of three neighboring communities that make up National Landing. The waterfront property sits next to Reagan National Airport in Alexandria, a city of 155,000 residents. It’s a scant 4.5 miles southwest of Capital One Arena, just over the border from the District of Columbia. There were no details shared on project financing during the announcement.

Monumental Sports officials hope to break ground for the arena in 2025 and open it in 2028. They’ve talked to Gensler about the Virginia project after the sports architect designed upgrades to Capital One Arena, said Jim Van Stone, Monumental Sports’ president of business operations, in an interview with VenuesNow. Gensler has a sports practice in D.C.

“The great thing is a lot of their key sports principals live in the market, so they experience events and know what it’s like to be a Caps and Wizards fan, so there’s a great competitive opportunity with that (partnership),” Van Stone said.

The group’s plan is for Capital One Arena to remain open as the future home of the WNBA’s Washington Mystics. Since 2019, the Mystics have played at the smaller Entertainment and Sports Arena in D.C.

In Virginia, the entertainment district, spanning 9 million square feet, would encompass three hotels, retail shops, restaurants, residential units, a conference center and other community spaces. The project would extend to a performing arts venue, shown in an illustration shaped like an old airport hangar; an esports facility; a new studio for Monumental Sports Network; and a practice facility for the Wizards.

Van Stone said the vision is to have a big chunk of the entertainment district under construction at the same time as the arena and performing arts venue. In that respect, it’s modeled after The Battery Atlanta, the mixed-used development tied to Truist Park, the Atlanta Braves’ stadium, a project that inspired Monumental Sports to develop its own version for its teams.

“They did a fantastic job, and for us, the vision of us mirroring that from an arena setting standpoint, is a great opportunity for us and the marketplace and our fans,” Van Stone said. “We’re optimistic that many of those things are going to be built simultaneously and be up and running in that 2028-29 season.”

Van Stone said the process for finding the right site to build a new arena started a few years ago, covering multiple jurisdictions in the District of Columbia, Virginia and Maryland, which is known as the DMV.

For Leonsis, driving the move to Virginia in part was his dissatisfaction with the mortgage he pays the District for the ground lease on Capital One Arena, which he feels is the worst deal in sports, the Washington Post reported.

Monumental Sports would most likely strike a more favorable deal with public officials in Virginia, including a sports authority, which would be formed to oversee the development.

Leonsis has a fondness for Virginia, which he mentioned during the press conference at Potomac Yard, even if it’s at the northeast tip of the state. It’s not far from where America Online, a pioneer in internet technology and where Leonsis served as a senior executive, was headquartered from 1996 to 2007. He was taken aback the first time he saw Potomac Yard as a potential arena site.

“We saw 70 acres and the ability to start with a clean slate and imagine what would an arena 30 years from now need to serve and to build a digital-first experience; it’s a romantic, but also pragmatic vision that we have, that we can’t do anywhere else,” Leonsis said. “This place, for people, is one of a kind. I got goosebumps, looking out at all the expansion capabilities, on water, with the airport across the street, and a brand new Metro (commuter rail) stop.”

Monumental Sports officials believe there would still be a viable market for Capital One Arena to book 100 to 125 events a year, between WNBA games, concerts, NCAA events and the city’s convention industry.

“It can be a great resource for the (Walter E, Washington) convention center, which is a few blocks away, if there’s a need for for a 10,000 to 20,000 seat facility,” Van Stone said. “We look at this new campus (in Virginia) as an expansion for Monumental. It’s not replacing Capital One Arena.”

Van Stone said the overall market of 8 million people within the DMV that Monumental Sports currently draws from for events is big enough to support a pair of large indoor venues. In that case, he said it’s similar to Chicago, New York and Los Angeles, all of which have multiple arenas with 17,000-plus seats.

To gain some context, for the year 2023, Cap One Arena ranked 27th among the top 200 arenas with 692,351 tickets sold for concerts and other special events, according to Pollstar data.

The building jumps to 11th overall in gross ticket sales with $860 million. Theoretically, many concerts would gravitate to a new arena in Alexandria, capitalizing on the entertainment district as a whole, leaving fewer shows to D.C. proper.

“There’s a lot of content out there,” Van Stone said. “There’s only a handful of us that have more than one big league in an arena and the challenge is competing dates in terms of NBA and NHL games. We feel bullish about it.”

Editor’s Note: This story has been updated.