Developer Ups Affordable Housing Commitment For Arena Project

ALEXANDRIA, VA — After financing wasn't included in the Virginia General Assembly budget for the arena and entertainment in Alexandria's Potomac Yard, the developer offered to double its affordable housing commitment if the project goes forward.

JBG Smith, which is proposing the arena and entertainment district with Washington Capitals and Wizards owner Monumental Sports & Entertainment, said it will increase the affordable housing units preserved from 500 to 1,000. The developer said it is proposing the additional affordable units as part of discussions with Alexandria city officials, Virginia legislators, Virginia Department of Housing and Community Development, and Alexandria residents.

If the Virginia General Assembly approves the financing measure allowing the arena to move forward, JBG Smith said it would work with the city government to identify and preserve 1,000 affordable housing units with a focus on neighborhoods surrounding the arena. The units would be in addition to any residential development JBG Smith is proposing as part of the proposed entertainment district.

The 1,000 units would be a significant portion of the city's affordable housing goal — 2,250 new affordable workforce units by 2030.

"Our extensive conversations with members of the Alexandria community, leaders such as Mayor Wilson, the council and legislators from the Commonwealth further reinforced the centrality and necessity of housing preservation efforts in Alexandria," said AJ Jackson, the executive vice president of social impact investing at JBG Smith. "As a result, we are doubling the number of units we are preserving to maintain affordability and prevent displacement in advance of the arena’s opening so that as many Alexandrians as possible are able to take advantage of this incredible economic development opportunity."

The arena team has faced a roadblock with the arena financing being left out of the Virginia budget sent to Gov. Glenn Youngkin. Virginia General Assembly approval of a new Virginia Sports and Entertainment Authority to provide $1.4 billion in bond financing would be the first step for the project to move forward. The arena financing was not in the budget after Virginia House and Senate negotiations after the House version of the budget had the arena financing and the Senate version did not.

State Sen. Louise Lucas (D-Portsmouth), the chair of the Senate Finance and Appropriations Committee, has been a key opponent that has prevented the measure from moving forward in the Senate. Lucas had questioned the public financing support for a private economic development project.

"With all of the information that I’ve had coming into me from other localities and other states, I can’t find anybody who can show me that having taxpayer dollars help construct, finance, any kind of sports arena has ever been a good deal for that locality," Lucas told WTOP about the budget deal. "And so I’m just not willing to take that risk."

Youngkin, who criticized the Senate push to leave the arena out of the budget, told WTOP he could reintroduce the arena in an amended budget. To get the General Assembly to reconsider the arena, Youngkin would have to propose it in a budget amendment or separate bill. The Virginia General Assembly will reconvene on April 17 to consider the governor's budget amendments and vetoes. Another option is the governor calling a special session.

JBG Smith is the developer behind the National Landing with Amazon's second headquarters in Arlington and the Virginia Tech Innovation Campus already under construction in Potomac Yard. With an arena and entertainment district development, JBG Smith would also pursue mixed-use development at the current Potomac Yard Shopping Center with plans to keep a Target store.