When the Harlem Globetrotters passed through town Dec. 29 to close out the year at the Richmond Coliseum, little did the world-famous basketball team know it’d be the headliner of what appears to be the last event in the aging arena’s nearly 50-year run.
Many locals likely didn’t know, either, as the City of Richmond – which is mulling a redevelopment project that would replace the arena – effectively closed the venue, without announcement or fanfare, at the start of this year.
The city’s contract with SMG, the company that managed the Coliseum, expired at the close of 2018, and no events for this year are listed on the venue’s website – the result of a decision to stop booking events past Dec. 31, according to a summary of a meeting with SMG that the city provided to BizSense.
In that meeting, held Dec. 3 and involving city budget director Jay Brown and SMG’s Dolly Vogt and Tabitha Sechrist, the parties discussed that due to financial losses from the Coliseum’s operating deficit, a determination had been made to not book events this year “until a decision had been made about the fate of the Coliseum.”
That fate could include demolition if the city goes forward with the proposed Navy Hill redevelopment, a $1.4 billion project proposed by Tom Farrell’s NH District Corp. that would replace the Coliseum with a larger arena as part of a larger redevelopment of a surrounding 10-block area.
Prior to that proposal, the city had been mulling whether to close the facility due to the deficit, which was said to be totaling $1.5 million in annual costs to the city. The uncertainty led to several high-profile events getting booked elsewhere, either locally or in other markets. It also prompted the Richmond Roughriders arena football team to leave the city for Wheeling, West Virginia.
Some of those events have been picked up by the neighboring Greater Richmond Convention Center, which will host this spring’s VCU commencement ceremonies and has booked several Amway events typically held at the Coliseum.
Concern about economic impact
While the closure has brought more business to the convention center, some observers see it as a loss of potential revenue and economic impact for area hotels, restaurants and other businesses while the NH District Corp. proposal plays out.
City Councilman Parker Agelasto, who represents the city on the board of directors for Richmond Region Tourism, said he raised the issue with the board at a recent meeting in light of ongoing negotiations between the city and NH District Corp. about the Navy Hill proposal, which Mayor Levar Stoney has endorsed but has yet to present to City Council.
Jack Berry, president of Richmond Region Tourism, said he asked the city to reopen the Coliseum for events, but his request was denied. He said efforts are now focused at booking events at alternate venues, such as the convention center and Richmond Raceway.
Agelasto said the request to reopen the Coliseum was made in light of the negotiations, which have continued since council voted in December to form a commission to review the proposal once presented.
“There was a request made, while Navy Hill deliberations were ongoing, whether or not the Coliseum could be reopened and made available until a later date,” he said, “because as of right now, being shuttered it is not necessarily serving anybody, particularly without a plan on the table.”
Council member Kim Gray, who pushed for the commission, said she was of the understanding that the proposal would have been presented by now, adding that the commission’s next steps hinge on a presentation. Gray said she has learned that a presentation won’t be made at council’s next regular meeting Monday.
“The initial information we got was that this thing would be approved and construction would be underway, and we haven’t seen a proposal yet,” Gray said. “I’d like to see what the proposal entails before seating a commission.”
Still under discussion
Grant Neely, an NH District Corp. representative, said attorneys for the group and the city continue to negotiate terms of the proposal, which would involve tax-increment financing and relocation of the city’s social services offices, among other details.
Uncertainty over the fate of the Coliseum is nothing new for Richmond, as the city has extended SMG’s contract in the past as administrators mulled whether to improve or replace the aging facility. In 2012, a 30-month contract extension avoided a pending expiration. That extension followed a five-year extension made in 2007, according to news reports at the time.
SMG had managed the Coliseum continuously since 2002. Attempts to reach SMG for comment were unsuccessful. Vogt, the company’s regional general manager, did not respond to inquiries made by phone and email.
The latest contract, while officially expired Dec. 31, was extended several months to allow for maintenance and other work to keep the building up to code and safely close and secure the facility, according to the city.
According to the summary of the meeting in December, closing the Coliseum is projected to save the city $321,115 in subsidies the remainder of this fiscal year. The full subsidy amount, $862,534 annually, would be saved in fiscal year 2020.
The closure also means a reduction in admission taxes the city collects from the venue due to no events booked. That loss is estimated to total $150,000 from January to June, resulting in a net impact this fiscal year of $171,115.
An audit of venue financials by Henrico-based accounting firm Mitchell Wiggins showed the Coliseum’s operating revenues for FY18 and FY17 totaled $1.69 million and $2.03 million, respectively, while expenses totaled $2.2 million and $2.44 million, respectively. That resulted in an operating loss of $512,420 in FY18 and $414,432 in FY17.