Mayor Muriel Bowser operates heavy-duty machinery to begin the demolition of two buildings at St. Elizabeths, making way for a new state-of-the art sports and entertainment venue on Feb. 18. (Astrid Riecken/TWP)

Before finalizing the details on $55 million agreement to build a basketball and entertainment arena, D.C Mayor Muriel E. Bowser was behind the controls of an excavator Thursday destroying two vacant buildings to make way for the project.

The next day Bowser submitted an agreement between the District, its quasi-independent sports agency and the owners of the Washington Wizards to the D.C. Council. If approved, the 5,000-seat arena would open in 2018 for Wizards practices, home games of the Washington Mystics and other entertainment on the east campus of the former St. Elizabeths hospital, where Bowser performed her ceremonial demolition.

Wizards officials want a new state-of-the-art practice facility to compete with other teams for the NBA’s best players, and the agreement allows the team to spend up to $3 million on equipment and furniture to outfit the facility.

Competing clubs, such as the Chicago Bulls and Philadelphia 76ers, have opened new  facilities with features including expansive weight rooms, film rooms resembling small theaters, lap pools and cryotherapeutic chambers that allow players to expose their bodies to subzero temperatures with the aim of reducing inflammation.

Bowser had earlier unveiled the broad outlines of the project. Taxpayers will pay about 92 percent of the total cost, via $23 million from the District and $27 million from Events DC, the sports and convention agency funded by a percentage of hotel occupancy taxes. The arena would be publicly owned and operated by Events D.C.

Monumental Sports & Entertainment, the owner of the Wizards and Mystics, would put up $4.46 million, about 8 percent of the cost, equated to the rent the company would pay over a 19-year lease.

The mayor’s willingness to pay for so much of the cost of the facility, which borders the Congress Heights neighborhood of Southeast, raised concerns among some D.C. Council members when they looked at the outline of the deal in December, particularly since taxpayers will be on the hook for any construction cost overruns. The development agreement specifies that Events DC will pay for any unforeseen excess costs — although if the total cost of the project balloons above 120 percent of the projected $55 million, or $66 million, Events DC reserves the right to confer with the D.C. government about how best to mitigate those costs.

The D.C. government’s costs are capped at $23 million, according to the agreement and Bowser economic development officials.

[D.C. to pay cost overruns for Wizards facility]

Demonstrating economic progress in neighborhoods east of the Anacostia River has taken on added importance for the mayor since Walmart pulled out of two leases to open stores there, potentially setting back two mixed-use development projects years.

But deep divisions over who benefits from development in the city persist, as evidenced by a pair of protesters from the activist group Empower DC who crashed the mayor’s press conference Thursday carrying a sign warning of “displacement” of longtime residents. The two were pulled away by D.C. police before Bowser dropped the excavator’s claw onto a concrete pavilion roof. After three forceful strikes with the help of a construction worker guiding her hands, the claw broke through, sending chunks of pavement raining down on to the side walk.


Schyla Moore from Empower DC is pulled away by D.C. police before the demolition of two buildings at St. Elizabeths. Moore says the development doesn’t benefit people in poverty who are increasingly pushed out of the city. (Photo by Astrid Riecken For The Washington Post)

Other projects in the area could prove more controversial. Tenants of four apartment buildings across the street from the project have complained for months of substandard treatment by their landlord, who plans to demolish the project, and have won the backing of D.C. Attorney General Karl A. Racine. Nearby, the District is in the early stages of trying to develop the housing complex Barry Farm, which could mean the relocation of hundreds of public housing residents.

[Why a law meant to protect the poor from gentrification doesn’t really work]

Bower and her staff market the project as “bigger than basketball,” and council members have largely praised the plans. Events DC estimates that the facility will bring 380,000 residents and visitors there along with hundreds of jobs to build and operate the venue.

“With this new development, we are delivering on a promise to revitalize Congress Heights, create quality affordable housing, generate hundreds of jobs, and put more District residents on a pathway to the middle class,” Bowser said in a press release.

Events DC has also set aggressive goals for hiring of D.C. residents and companies based in the city. The development agreement requires that the agency “shall use commercially reasonable efforts” to ensure that 51 percent of the jobs at the site be filled by D.C. residents and that at least 35 percent of maintenance and operational contracts be given to small, or minority-owned District businesses. That includes janitorial work, food service and security.

Staff writer Aaron C. Davis contributed to this report.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz