Potomac Yard arena faces new hurdle as unions voice opposition

The move to Alexandria for the Washington Wizards and Capitals hit another roadblock Tuesday with the announcement that an influential group of labor unions will oppose the project.

The American Federation of Labor and Congress of Industrial Organizations, which features 56 member unions, said the proposed arena and its campus are designed to take advantage of workers with low-paying jobs.

“Construction and hospitality jobs in the campus’ privately-owned entertainment district will be low-wage jobs because the developer would not accept any labor agreements,” Virginia Diamond, president of the AFL-CIO’s Northern Virginia chapter, said in a statement. “Taxpayers should not make a massive investment in a project that is only going to create more low-wage jobs for local workers.”

Union leaders said developer JBG Smith has not worked with them to protect workers on the project. They outlined concerns about wage theft and the exploitation of immigrant workers.

“This is a bad deal for workers, plain and simple,” said Paul Schwalb of UNITE HERE Local 25, a union for entertainment workers. “JBG Smith wants to line their pockets on the back of Virginia workers. No thank you.”

The proposal to build an arena in Potomac Yard calls for a $400 million upfront investment from Ted Leonsis’ Monumental Sports and Entertainment, which owns the Wizards and Capitals. State officials would issue at least $1.4 billion in public bonds to finance the rest of the project.

Under the current plans, officials would pay off the bonds through a naming rights deal, sales tax and income tax on arena workers. 

State Sen. L. Louise Lucas has been the preeminent opponent of the arena in the Virginia Senate. She refused to hear arena legislation in the Senate’s Finance and Appropriations Committee earlier this month, noting that Republican Gov. Glenn Youngkin’s proposal was “not ready for prime time.”

“The #GlennDome financing is based on ticket sales to the new arena. Looking at the projections that appears to include Wizards playoff games,” Lucas, a Democrat, wrote on X on Tuesday. “Wizards?  Playoffs?  I was still at the Shipyard the last time they were relevant in that discussion and they were called the Bullets.”

Stadium opponents, like the Coalition to Stop the Arena at Potomac Yard, have rallied behind Lucas in recent weeks. The group has taken trips to Richmond, hoping to tap the brakes on stadium development. In a statement on Tuesday, the group commended the unions on their opposition.

“[Workers] said ‘no’ to an arena where good, union jobs are not protected. They said ‘no’ to a deal that does not protect immigrant workers from wage theft and exploitation. And they said ‘no’ to a bad deal for the District, Virginia and Alexandria that would enrich JBG Smith, one of the most anti-union companies in America,” the coalition wrote in a statement. “Governor Youngkin and leaders in the Virginia General Assembly and the City of Alexandria should use today’s announcement to acknowledge what is already obvious to citizens and workers: It’s time to call off this Monumental Mistake.”

Union opposition is another hurdle for the planned arena. Multiple state and local lawmakers have said they would only support the proposal if local unions were on board. 

On Tuesday, the governor said union leaders would not stop the arena.

“My administration and the partners in this project have worked in good faith over the last few months to give union workers a substantial role in this project. Today, labor leadership backtracked on that progress and announced their opposition to a project that creates 30,000 jobs, including 12,000 construction-trade jobs,” Youngkin said in a statement. “Virginia is a right-to-work state and unreasonable demands from union leaders will not derail this project. I will continue to work with the General Assembly to complete this opportunity and bring $12 billion in economic contributions that will fund shared priorities in Virginia.”

A bill to create a Virginia stadium authority passed through the House of Delegates earlier this month. The proposal has not yet passed the Senate, where it faces opposition from leading Democrats. If the Senate does not pass the legislation, the governor could negotiate a stadium authority through budget proposals.