BREAKING: Alexandria ends negotiations for Potomac Yard arena

Updated 6:25 p.m. — The Potomac Yard arena won’t be moving forward.

The City of Alexandria just announced that the city is ending negotiations related to the Potomac Yard Entertainment District and “the proposal will not move forward.”

Since its announcement, the project attracted considerable controversy, with proponents arguing the arena would be a financial boon for the city and the neighborhood, while opponents said the project had myriad issues, not least of which was the traffic impact.

The project struggled at the General Assembly, however, where Virginia State Sen. Louise Lucas (D-18), chair of the Senate Appropriations Committee, spearheaded a fight against the arena and kept it out of the Senate budget.

“We are disappointed this proposal was not able to be thoughtfully considered on its merits by legislators, stakeholders and ultimately now by our community and instead got caught up in partisan warfare in Richmond,” said Mayor Justin Wilson.

The City has provided an update on the Potomac Yard Proposal.

I am grateful for Stephanie Landrum and our City Manager as well as our entire @AlexandriaEcon and City teams.

They worked tirelessly to give Alexandria a more stable and prosperous future.https://t.co/PuPmzgIJ7T

— Justin Wilson (@justindotnet) March 27, 2024

As Monumental announces today they are staying in Washington DC we are celebrating in Virginia that we avoided the Monumental Disaster! Thank you to everyone who stood with us in this fight! pic.twitter.com/bBvKjLFPXO

— L. Louise Lucas (@SenLouiseLucas) March 27, 2024

Vibe shift? DC is so back, baby pic.twitter.com/9P8LYDF5Pa

— Dan Steinberg (@dcsportsbog) March 27, 2024

Gov. Glenn Youngkin again expressed frustration with opposition to the project. In a release, Youngkin said:

Virginians deserve better. A one-of-a-kind project bringing world-class athletes and entertainment, creating 30,000 jobs and $12 billion in economic activity just went up in smoke. This transformational project would have driven investment to every corner of the Commonwealth. This should have been our deal and our opportunity, all the General Assembly had to do was say: ‘thank you, Monumental, for wanting to come to Virginia and create $12 billion of economic investment, let’s work it out.’ But no, personal and political agendas drove away a deal with no upfront general fund money and no tax increases, that created tens of thousands of new jobs and billions in revenue for Virginia. I’d like to thank Ted Leonsis and the Monumental team, the City of Alexandria, JBG Smith and countless other partners for their professionalism, belief in Virginia and fortitude. Congratulations to Monumental for striking a great deal, I’m sorry you won’t be in Virginia.

Developer JBG Smith also put out a release expressing disappointment with the decision, blaming “special interests” seeking to move the arena to Tysons. The developer said the future of Potomac Yard will likely be less dense than it otherwise would have been:

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.

Beyond the arena, state and local governments will lose needed tax revenue, economic development credibility, and what could have been Virginia’s last best chance to land a professional sports franchise for at least a generation. Economic development and growth thrive on transparency and predictability. The scheming and special interests that plagued this opportunity in the Virginia legislature will no doubt cause future employers and the next Monumental to question whether their opportunity will get a fair hearing.

This opportunity also brought with it the potential to add tens of thousands of jobs and needed housing units, including 1,000 units of affordable housing preservation in Alexandria which we had pledged as part of the arena proposal. Traffic and transportation investments, including possible Metro funding, are also likely gone. Instead, the existing surface-parked, single story shopping center on the site will remain through the remaining 20-year term of the Target lease and development on the remaining land will likely be far less dense. To say we are disappointed is an understatement; we are disgusted with the back-room-dealing and opaque scheming that took place as this played out.

The full release from the City of Alexandria is below:

The City of Alexandria has ended negotiations related to the Potomac Yard Entertainment District opportunity and the proposal will not move forward.

As stewards of the City’s economic health and development, City leaders believed the Potomac Yard Entertainment District opportunity was worthy of community discussion and Council consideration. We negotiated a framework for this opportunity in good faith and participated in the process in Richmond in a way that preserved our integrity. We trusted this process and are disappointed in what occurred between the Governor and General Assembly.

We engaged in substantial community engagement over the past months that informed our negotiations and would have made the proposal even better for our community. That continued conversation would have also allowed us to consider how a project of this scale could support our plans for growth and our community’s future.

Throughout this process, the City has been committed to ensuring that our role in this project not only added financial value but promised that our core values would remain an integral part of this opportunity. The City was adamant that any favorable consideration of the proposal included substantial and thoughtful improvements to the existing transportation system; included affordable housing; protect our stellar AAA bond rating; protect existing and future residents from financial risk; provided substantial future revenue for city and school services; protected existing neighborhoods; and provided quality jobs for our community. We are disappointed negotiations did not result in a proposal that protected our financial interests and respected these community values.

We are resolute in our commitment to ensure the City’s future is determined by our community. We will continue to pursue economic opportunities that improve our quality of life and economic health. Alexandria welcomes commercial investment, and our residents, businesses, and stakeholders deserve the chance to make educated decisions about how we continue to welcome new businesses to our city. We will continue to focus our efforts on bringing quality commercial opportunities to our community in the future.