Tom Sherwood
https://wjla.com/news/local/monumental-sports-washington-dc-attorney-general-brian-schwalb-ted-leonsis-claim-arena-agreement-virginia-potomac-yard-legal-gov-youngkin-capitals-wizardsFrom the letter:
https://wjla.com/resources/pdf/144d3807-0d49-40e0-a073-273cac3dc06b-03182024OAGLettertoMSE.pdf“Your letter recognizes that, among its contributions to MSE over the years, the District publicly financed extensive improvements to the Arena in 2007, just 10 years after the Arena opened. In July 2007, the District enacted legislation that gave DC Arena LP (DCALP) $50 million to renovate the Arena. Those funds were raised through municipal bonds. The Council expressly conditioned that public financing on DCALP’s commitment to extend the original ground lease for an additional 20 years, thereby ensuring the District and its taxpayers that the Wizards and the Capitals would continue to play their home games at the Arena through 2047. The July 2007 legislation did not authorize DCALP to extinguish or revoke the lease extensions upon prepayment of the outstanding bond debt at some unknown time in the future. Nor did any DCALP representative or District official suggest such a possibility during the legislative process. On the contrary, they all agreed on the public record that, in exchange for the $50 million in public financing, DCALP would exercise the two 10-year lease extensions—full stop. And that made sense: allowing DCALP to terminate the lease extensions would have permitted it to retract the consideration it provided for the $50 million in taxpayer-backed financing it requested and received. That consideration included not only the lease extensions themselves, but also, as your letter acknowledges, the promise of excess sales tax revenues that would revert to the District for the additional 20 years of the lease, from 2028 through 2047.
“Notwithstanding the plain language and clear intent of the July 2007 legislation, provisions in subsequent agreements executed in December 2007 purport to allow DCALP to revoke the lease extensions at any time by paying the District the money needed to satisfy the outstanding bond debt. Because those provisions illegally exceeded what the 2007 legislation authorized, they are ultra vires, void ab initio, and unenforceable. Under the valid and enforceable terms of the 2007 legislation and agreements, MSE is obligated to keep the Wizards and Capitals at the Arena through 2041.
“Additionally, in negotiating a preliminary agreement with Virginia, MSE has broken other promises to the District. MSE's October 12, 2017 agreement with the District for the Entertainment and Sports Arena (ESA) in Congress Heights provides that, if MSE intends to relocate the Wizards or Capitals from Capital One Arena, MSE must (1) notify the District of its intent, (2) negotiate exclusively and in good faith with the District for a period of six months, (3) refrain from negotiating with anyone else during that exclusive negotiation period, (4) following the exclusive negotiation period, if it intends to enter into any agreement with a third party to move the teams outside the District, give the District written notice of the material terms of the agreement, and (5) give the District 90 days to make a competing offer. MSE's negotiations with Virginia violated these contractual provisions.”
