Va. unions oppose Alexandria arena, but governor sticks by it

The AFL-CIO’s Virginia member unions announced Tuesday that they oppose the proposed Alexandria arena for the Washington Capitols and Wizards teams and a surrounding entertainment district. The $2 billion deal has been promoted by Gov. Glenn Youngkin and some City of Alexandria officials, while receiving significant pushback from key Democratic state lawmakers and some Alexandria residents.

In a letter sent Tuesday to state senators who are considering a bill that would create a state authority to own and run the arena, the president of the Northern Virginia Labor Federation said the region’s AFL-CIO member unions “have decided to oppose the Potomac Yard Stadium Authority project” because the developers of the proposed project, JBG Smith Properties and financial adviser JPMorgan Chase, “declined to negotiate a LPA [labor peace agreement] or a PLA [project labor agreement]. We also do not have a signed PLA for the arena portion.”

A labor peace agreement, the letter from Northern Virginia AFL-CIO President Virginia Diamond states, “would ensure a fair process for hotel workers to freely decide whether they want to unionize. We also asked the developers to sign a project labor agreement … for construction workers that would support small minority- and women-owned businesses, promote local hiring from disadvantaged communities and provide career paths through apprenticeship training.

“We have consistently stated that given the huge public investment in the project, there must be a guarantee of good jobs for workers on the entire campus. We insisted that the wealth generated by the project must benefit all — not just those at the top.”

Diamond’s letter goes on to suggest that without the labor agreements, “there is likely to be wage theft, exploitation of immigrants and poverty wages among hospitality and construction workers.”

JBG Smith, the Bethesda, Maryland-based developer of the project, said in a statement Tuesday it was “disappointed and surprised” by the unions’ statement about the arena, which JBG Smith maintained would “create tens of thousands of good-paying jobs, most of which would be union jobs, and offer some of the strongest labor and worker protections of any project in Virginia’s history, especially during the construction phase.”

The company also said in its statement that it does not “own or operate hotels and will do nothing to stand in the way of any efforts by the eventual owner or operator of hotels in this project to enjoy productive conversations with organized labor. JBG Smith condemns wage fraud and theft practices of any kind, and we have a specific policy requiring the general contractor and subcontractors to thoroughly investigate and work with the relevant authorities and with JBG Smith on any allegations of wage fraud or theft.”

Diamond also wrote that Monumental Sports & Entertainment, the teams’ owners group, has union workers at its current arena in Washington, D.C., many of whom would move to the Alexandria campus if approved, “but we cannot leave our most vulnerable community members behind. Their work has dignity and they deserve to have their lives improved by this project. They deserve good wages, health care and retirement benefits, job safety and workplace rights so they can afford to live and work in our community.”

However, Youngkin said in a statement Tuesday evening that his 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.”

Virginia, Youngkin continued, “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.”

Monumental and JBG Smith also released a statement together Tuesday following the unions’ announcement: “As we have said from the outset, Monumental Sports & Entertainment and JBG Smith are committed to ensuring the development of a new sports and entertainment district that creates good-paying jobs, including quality union jobs. During near daily negotiations over the course of several months, this development partnership gave labor nearly everything it asked for including strong wages, benefits and training commitments, as well as efforts to prevent wage theft and misclassification. Our discussions went farther to specifically promote local hiring and opportunity for small, women-, minority- and veteran-owned businesses.”

Alexandria officials also released a statement Tuesday in response to the unions’ letter, emphasizing the city’s history of working with unions: “The City of Alexandria believes that pursuing the entertainment district, and the economic development opportunities it creates, is critical to the immediate and long-term growth of our community. We also believe successful pursuit of this opportunity includes recognition of the strength of a positive labor relationship and ensures this opportunity creates good-paying jobs, including quality union jobs.”

The city’s statement continues to say that it has reached three collective bargaining agreements with unionized city employees, as well as “our history of support for good jobs, higher wages, better benefits and safer workplaces throughout our community.

“We will continue to work with our partners to reach an agreement that benefits workers and achieves the intended goals of this project — including significant city return on investment to support city resources and services; reducing the tax burden on our residents; redevelopment of a currently underperforming and aging strip shopping center; and a catalyst for robust future economic growth for our city and our residents, including maximizing our investment in the Potomac Yard Metro station.”

JBG Smith’s statement added that the company has worked with community stakeholders to bring $215 million-plus in transportation investments into the immediate neighborhood of the proposed project, and “has voluntarily committed to preserving the affordability of 500+ housing units immediately around the site and is working to bring small, local, and minority-owned businesses to the project.”

The Coalition to Stop the Arena at Potomac Yard, a group of Alexandria residents opposing the project, praised the unions’ letter, adding, “They 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.”

Business groups’ support

Meanwhile, Virginia chambers and other business groups have largely backed the project, including the Northern Virginia Chamber of Commerce and the Virginia Economic Developers Association. “The benefits of a project of this size will be felt well beyond the region, and we believe the entire commonwealth will benefit from this influx of jobs, revenue, and economic opportunity in Virginia,” VEDA President Linda Green said in a statement last week.

On Tuesday, the Northern Virginia Black Chamber of Commerce also threw its support behind the project. “This sports and entertainment district is a game-changer for our Black-owned business community,” chamber Chair Samuel Wiggins said in a statement. “It opens up new avenues for growth, collaboration and innovation. We’re looking at a future where our local businesses can flourish alongside global names, contributing to and benefiting from the economic vitality this district will bring.”

Eric Terry, president of the Virginia Restaurant, Lodging, and Travel Association, wrote an op-ed column Tuesday in the Richmond Times-Dispatch saying that the arena and entertainment district would “turbocharge” tourism growth in the commonwealth.

Nonetheless, unions carry a lot of weight with Democratic lawmakers, some of whom have already voiced wariness or opposition to the arena authority bill that is needed for the project to move forward.

On Feb. 16, the Alexandria Economic Development Partnership released an economic and fiscal impact report conducted on the city’s behalf by HR&A Advisors, forecasting that the arena could generate up to $7.96 billion in annual economic output for the state and nearly 30,000 permanent jobs statewide if the arena is completed by 2028 on an accelerated construction schedule. However, local opponents argued there wasn’t enough transparency in the report, which included no revenue projections.

Meanwhile, according to a Washington Post report, the arena plan is stripped from one version of the state budget under consideration in the Virginia General Assembly. The state Senate would have to approve a House-originated bill to authorize creation of the state authority for the arena project, which would shoulder $1.35 billion of the project’s $2 billion cost with bonds. Sen. Louise Lucas, chair of the powerful Senate Finance Committee, stalled the Senate version of the state authority bill, citing concern over a possible risk to public funds.