Potomac Yard developer blames Tysons talk for failure of pro sports arena deal

The deal to bring the Washington Capitals and Wizards to Alexandria’s Potomac Yard is officially dead, and the developer says suggestions that an arena could be built in Tysons instead were the final nail in the coffin.

Alexandria City officials revealed yesterday (Wednesday) that they had ended negotiations with developer JBG Smith, Wizards and Capitals owner Monumental Sports & Entertainment, and other stakeholders for a stadium in the proposed Potomac Yard Entertainment District. About an hour later, Monumental owner Ted Leonsis and D.C. Mayor Muriel Bowser announced that the two professional sports teams will stay at Capital One Arena in Chinatown after all.

After joining Leonsis and city leaders in December to tout the Wizards and Capitals’ planned move across the Potomac River, Virginia Gov. Glenn Youngkin lamented that “personal and political agendas” at the state level torpedoed a significant economic opportunity, while the city expressed disappointment in how discussions between Youngkin and the General Assembly unfolded.

However, JBG Smith CEO Matt Kelly pointed to a different culprit, claiming that “special interests” seeking to combine a sports arena with a casino in Tysons had “complicated and ultimately blocked” the Potomac Yard negotiations.

Despite our best efforts, this project was unable to get a fair hearing on its merits with the Virginia Senate. It is now clear that our efforts may have been complicated and ultimately blocked, in part, by special interests seeking to move the Monumental arena to Tysons Corner and to combine it with a casino. The Washington Post and other outlets have reported on this scheme and the hundreds of thousands of dollars, enormous sums in Virginia politics, of political contributions associated with it — a large portion of which were directed to key senate leaders. When one follows the money, the implications are deeply troubling for Virginia and for the future of transparency in economic development pursuits, especially those that seek certainty through the now damaged MEI legislative process.

The Washington Post reported on Sunday (March 24) that Senate Majority Leader Scott Surovell (D-34), hopeful Fairfax County casino developer Comstock CEO Christopher Clemente and political consultant Ben Tribbett, who counts both Surovell and Comstock as clients, had raised the idea of moving the Wizards and Capitals to Tysons instead of Alexandria with Monumental executives.

According to the Post, Leonsis and the other Monumental executives quickly rejected the proposal, which also didn’t appeal to Youngkin.

State Sen. Dave Marsden (D-37), who patroned the ultimately postponed bill to make Fairfax County — specifically a site in Tysons along Metro’s Silver Line — eligible for a casino, says he was never involved in “any serious talk” about combining the casino with a Monumental arena. The idea was “casually talked about” during the General Assembly’s session, which ended on March 9, but he never viewed it as a legitimate possibility.

“I think that was a last-minute thing people threw out there,” he told FFXnow.

When asked about JBG Smith’s statement, Tribbett pointed to a tweet by another one of his clients, State Sen. Louise Lucas (D-18), who emerged as a significant opponent to the Potomac Yard arena and used her position as chair of the Senate Appropriations Committee to keep a critical financing mechanism out of the General Assembly’s state budget proposal.

“This is a freakin legendary smackdown so now the incompetent losers behind the effort are out telling lies and conspiracy theories instead of just admitting they got their asses kicked by an 80 year old (affectionately called) ghansta legislator,” Lucas tweeted yesterday after news spread that the Potomac Yard arena negotiations were dead.

This is a freakin legendary smackdown so now the incompetent losers behind the effort are out telling lies and conspiracy theories instead of just admitting they got their asses kicked by an 80 year old (affectionately called) ghansta legislator.

— L. Louise Lucas (@SenLouiseLucas) March 28, 2024

Surovell says the Tysons pitch “had nothing to do with the failure of the project,” describing it as just one alternative he suggested “to try to get around the idea of avoiding using taxpayer-backed debt to finance the arena construction.”

Rather, he says JBG Smith is “simply deflecting blame from their failure to engage in a good faith negotiation,” particularly when it came to a labor agreement — which he identifies as the real barrier to a successful Potomac Yard deal.

“We made clear from the beginning that if taxpayer dollars and credit was going to be used to massively enhance the value of the shopping center and other assets JBG owned and was managing, that they needed to agree on terms to pay workers fair wages, benefits, and allow them to collectively organize on their properties,” Surovell told FFXnow. “Apparently that was non-negotiable along with other aspects of this arena deal such as taxpayer back bonds. We are a coequal branch and not a rubber stamp.”

Labor unions that would’ve represented arena construction and concession workers came out in opposition to the Potomac Yard plans in February. According to Surovell, JBG Smith had failed to reach a project labor agreement with the Northern Virginia AFL-CIO (NoVA Labor), cutting off negotiations a month ago.

In a statement, NoVA Labor thanked Democratic leaders in the General Assembly and the Alexandria City Council for backing them in their fight to ensure the arena project would use union workers.

This should send a message that any major development projects in which the Commonwealth or the city is a party must require good jobs for workers.

— NoVALabor (@va_labor) March 28, 2024

“When the proposal to build the arena and entertainment district was announced, the elected leaders of the General Assembly and of the City of Alexandria made it clear that they would not support a project that did not have the support of labor,” the union said. “Unless the project included guarantees of good jobs, the project could not go through…This should send a message that any major development projects in which the Commonwealth or the city is a party must require good jobs for workers.”

While the Potomac Yard arena saga has ended, the prospect of a casino in Fairfax County remains undecided. The Virginia Senate’s finance committee voted on Feb. 6 to hold Marsden’s bill for consideration in 2025.

An informal poll conducted earlier this week by FFXnow suggests opposition to a casino remains strong, with the largest portion of respondents saying that they also had no interest in the Wizards and Capitals moving to Fairfax County.