Mayor Levar Stoney delivers his announcement flanked by, from left: senior policy advisor Matt Welch, deputy chief administrative officer Lenora Reid, CAO Selena Cuffee-Glenn, chief of staff Lincoln Saunders, finance director John Wack and financial consultant David Rose with Davenport & Co. (Jonathan Spiers)
Nine months of negotiations surrounding the now-$1.5 billion Navy Hill project have come to a close as Mayor Levar Stoney said he is ready to present the Coliseum-anchored redevelopment plan to City Council.
In a press conference called less than two hours beforehand, Stoney announced Thursday in the lobby of City Hall that his administration had come to terms with the project’s backers and a formal introduction of ordinances would be made to council this Monday, at a special meeting he requested that is scheduled for noon.
Local business leaders behind the proposal, including Dominion Energy CEO Tom Farrell, former SunTrust executive C.T. Hill, CCA Industries’ Bill Goodwin and dermatologist Pamela Royal, were among those on hand for the announcement, which came nine months after Stoney held a similar event in November endorsing the project with an agreement in principle.
Since then, Stoney said agreements had been reached on details intended to keep city taxpayers off the hook from having to bear a financial burden over the course of the project, which is projected to be completed five years from now. The overall cost of the project, initially put at $1.4 billion, is now set at $1.5 billion.
Among changes made to the plan since November is a decision to keep the social services building downtown, with no obligation to relocate from its current location at 900 E. Marshall St. before NH District Corp. identifies a suitable alternative. The initial proposal called for relocating the department outside of the project’s 10-block redevelopment area bounded by North Fifth, East Leigh, North 10th and East Marshall streets.
Another change relates to financing for work on the Blues Armory building, which is to be renovated with a food hall, ballroom and event space at NH District Corp.’s expense. Stoney previously said the renovations would be financed in the same manner as the new arena to replace the now-shuttered Coliseum, through nonrecourse revenue bonds. Now, the Blues Armory work would be funded through private investment, putting the risk of any operating shortfall on NH District Corp.
‘Unprecedented protections’
A new rendering shows the proposed arena. (NH District Corp.)
“What we’ve been able to add since November are unprecedented protections for the city and our taxpayers, which makes this project a safe and responsible investment for Richmond,” Stoney said. “We’ve dotted the I’s, crossed the T’s and negotiated language in the ordinance to ensure that what we have agreed will happen actually happens.”
Described as the biggest economic development project in city history, Navy Hill would be funded in large part through tax-increment financing (TIF), generated from real estate tax revenue from new development in a district proposed to span much of downtown, bordered to the west and east by First and 10th streets, and to the north and south by Interstate 64-95 and the Downtown Expressway.
Initially proposed for the project’s 10-block area, Stoney said the district needed to be enlarged because 60 percent of the properties in the project area are state-owned or otherwise tax-exempt. Revenues used to balance the city budget that took effect July 1 would be exempt from TIF.
Stoney said the agreement also requires NH District Corp. to show that $900 million in private investment has been programmed to build the project’s planned hotel, housing units and retail and office space before the city can pursue a bond sale to finance the new 17,500-seat arena, projected to cost $235 million and planned to be the largest in Virginia.
The city would retain ownership of the new arena, and financial risk for that project would be on bondholders, Stoney said, with bonds paid back using only TIF revenue.
“By guaranteeing significant private investments alongside the construction of the new arena, we ensured that the future tax revenues are there to support this project and that we will be able to quickly begin to receive the surplus revenues that can benefit everyone in our city,” he said.
An updated aerial rendering shows rooftop gardens and other green space incorporated into the buildings. (NH District Corp.)
The hotel, planned to supplement the adjacent Greater Richmond Convention Center, is planned for 541 rooms, up from 527 as initially presented. The project also would construct a new GRTC transfer center, replacing the current setup on Ninth Street.
Filling out the development would be more than 2,000 market-rate apartments, 280 income-based housing units within the project area and potentially hundreds more elsewhere downtown that would be funded with surplus revenues and through philanthropic support. Stoney mentioned $10 million in support specifically from The Community Foundation and Atlantic Union Bank that would be earmarked for 200 income-based units beyond the project footprint.
He said Navy Hill would create 12,500 jobs during construction and more than 9,300 permanent jobs upon completion. NH District Corp. would work with the city to offer workforce training opportunities and host job fairs in each council voter district, and $300 million in contracts would be set aside for woman- and minority-owned businesses.
Upon completion, the project is expected to generate $500 million in annual wages and $1 billion in surplus revenue to the city over 30 years. Stoney said those surplus revenues would help the city fund projects benefiting schools, housing, streets and the arts.
Master planning for Navy Hill is being handled by Capital City Partners, comprised of Fairfax-based Concord Eastridge and Michael Hallmark’s Future Cities, which relocated from Los Angeles to Richmond for the project. The group has set up shop in a downtown storefront. Hallmark also was in attendance Thursday.
The announcement came one week after rezoning applications to accommodate the project were filed with the city planning department. The applications seek to rezone 13 properties that make up much of the 10-block area to “CM,” a city zoning district specific to the Coliseum that is being updated.
Once presented to City Council, Stoney’s ordinances would be subject to public hearings and reviewed by a council-appointed advisory commission over a 90-day period. In a statement Thursday, council President Cynthia Newbille said council “looks forward to the receipt, review, and execution of the full vetting and due diligence that such a proposed transformative project necessitates and Richmonders deserve.”
Correction: The new arena is projected to cost $235 million. An earlier version of this story incorrectly reported a higher number. Also, NH District Corp.’s financing of the Blues Armory renovation is a change from the initial proposal. The city’s ownership of the building has not changed as was previously reported.
Mayor Levar Stoney delivers his announcement flanked by, from left: senior policy advisor Matt Welch, deputy chief administrative officer Lenora Reid, CAO Selena Cuffee-Glenn, chief of staff Lincoln Saunders, finance director John Wack and financial consultant David Rose with Davenport & Co. (Jonathan Spiers)
Nine months of negotiations surrounding the now-$1.5 billion Navy Hill project have come to a close as Mayor Levar Stoney said he is ready to present the Coliseum-anchored redevelopment plan to City Council.
In a press conference called less than two hours beforehand, Stoney announced Thursday in the lobby of City Hall that his administration had come to terms with the project’s backers and a formal introduction of ordinances would be made to council this Monday, at a special meeting he requested that is scheduled for noon.
Local business leaders behind the proposal, including Dominion Energy CEO Tom Farrell, former SunTrust executive C.T. Hill, CCA Industries’ Bill Goodwin and dermatologist Pamela Royal, were among those on hand for the announcement, which came nine months after Stoney held a similar event in November endorsing the project with an agreement in principle.
Since then, Stoney said agreements had been reached on details intended to keep city taxpayers off the hook from having to bear a financial burden over the course of the project, which is projected to be completed five years from now. The overall cost of the project, initially put at $1.4 billion, is now set at $1.5 billion.
Among changes made to the plan since November is a decision to keep the social services building downtown, with no obligation to relocate from its current location at 900 E. Marshall St. before NH District Corp. identifies a suitable alternative. The initial proposal called for relocating the department outside of the project’s 10-block redevelopment area bounded by North Fifth, East Leigh, North 10th and East Marshall streets.
Another change relates to financing for work on the Blues Armory building, which is to be renovated with a food hall, ballroom and event space at NH District Corp.’s expense. Stoney previously said the renovations would be financed in the same manner as the new arena to replace the now-shuttered Coliseum, through nonrecourse revenue bonds. Now, the Blues Armory work would be funded through private investment, putting the risk of any operating shortfall on NH District Corp.
‘Unprecedented protections’
A new rendering shows the proposed arena. (NH District Corp.)
“What we’ve been able to add since November are unprecedented protections for the city and our taxpayers, which makes this project a safe and responsible investment for Richmond,” Stoney said. “We’ve dotted the I’s, crossed the T’s and negotiated language in the ordinance to ensure that what we have agreed will happen actually happens.”
Described as the biggest economic development project in city history, Navy Hill would be funded in large part through tax-increment financing (TIF), generated from real estate tax revenue from new development in a district proposed to span much of downtown, bordered to the west and east by First and 10th streets, and to the north and south by Interstate 64-95 and the Downtown Expressway.
Initially proposed for the project’s 10-block area, Stoney said the district needed to be enlarged because 60 percent of the properties in the project area are state-owned or otherwise tax-exempt. Revenues used to balance the city budget that took effect July 1 would be exempt from TIF.
Stoney said the agreement also requires NH District Corp. to show that $900 million in private investment has been programmed to build the project’s planned hotel, housing units and retail and office space before the city can pursue a bond sale to finance the new 17,500-seat arena, projected to cost $235 million and planned to be the largest in Virginia.
The city would retain ownership of the new arena, and financial risk for that project would be on bondholders, Stoney said, with bonds paid back using only TIF revenue.
“By guaranteeing significant private investments alongside the construction of the new arena, we ensured that the future tax revenues are there to support this project and that we will be able to quickly begin to receive the surplus revenues that can benefit everyone in our city,” he said.
An updated aerial rendering shows rooftop gardens and other green space incorporated into the buildings. (NH District Corp.)
The hotel, planned to supplement the adjacent Greater Richmond Convention Center, is planned for 541 rooms, up from 527 as initially presented. The project also would construct a new GRTC transfer center, replacing the current setup on Ninth Street.
Filling out the development would be more than 2,000 market-rate apartments, 280 income-based housing units within the project area and potentially hundreds more elsewhere downtown that would be funded with surplus revenues and through philanthropic support. Stoney mentioned $10 million in support specifically from The Community Foundation and Atlantic Union Bank that would be earmarked for 200 income-based units beyond the project footprint.
He said Navy Hill would create 12,500 jobs during construction and more than 9,300 permanent jobs upon completion. NH District Corp. would work with the city to offer workforce training opportunities and host job fairs in each council voter district, and $300 million in contracts would be set aside for woman- and minority-owned businesses.
Upon completion, the project is expected to generate $500 million in annual wages and $1 billion in surplus revenue to the city over 30 years. Stoney said those surplus revenues would help the city fund projects benefiting schools, housing, streets and the arts.
Master planning for Navy Hill is being handled by Capital City Partners, comprised of Fairfax-based Concord Eastridge and Michael Hallmark’s Future Cities, which relocated from Los Angeles to Richmond for the project. The group has set up shop in a downtown storefront. Hallmark also was in attendance Thursday.
The announcement came one week after rezoning applications to accommodate the project were filed with the city planning department. The applications seek to rezone 13 properties that make up much of the 10-block area to “CM,” a city zoning district specific to the Coliseum that is being updated.
Once presented to City Council, Stoney’s ordinances would be subject to public hearings and reviewed by a council-appointed advisory commission over a 90-day period. In a statement Thursday, council President Cynthia Newbille said council “looks forward to the receipt, review, and execution of the full vetting and due diligence that such a proposed transformative project necessitates and Richmonders deserve.”
Correction: The new arena is projected to cost $235 million. An earlier version of this story incorrectly reported a higher number. Also, NH District Corp.’s financing of the Blues Armory renovation is a change from the initial proposal. The city’s ownership of the building has not changed as was previously reported.
This project has been a hot topic for rumor, debate, & discussion for a year now. So I’ll start the dialogue by asking, why does Richmond actually need this? Seems like a grandiose vanity project for a city that has made great strides in local years despite, not because of, city hall.
why should we accept leaving 10 blocks of downtown as parking garages and vastly underutilized concrete spaces?
It does seem like a proverbial “If we build it, they will come” scenario. My main question is if they truly did their due diligence, or if they put as much (or little) thought into this as they did the 6th St Marketplace or the Canal Walk. If they’re right and the tax dollars are generated as planned, a great move for the city. If not, the city defaults and is ridiculed for all eternity.
Why should the public believe the city can successfully be involved in this sort of project given their track record? The latest attempt at the farmers market is an example. It’s barely a block. And it’s all concrete. It’s a simple project and they ran out of money according to city’s project development manager. Articles like this one don’t paint a picture of confidence either:https://www.richmond.com/news/local/city-of-richmond/audit-poor-accounting-mismanagement-contributed-to-confusion-over-rps-capital/article_5a50f9f9-8905-5d2d-a669-6eee9102b00c.html
This is a great project for the City and the surrounding counties. Love it or hate it, sports and entertainment is absolute FUEL for a city – when done right. We have the people and we now appear to have the commitments needed. I think we are doing it right and I think putting RVA on the map as an entertainment destination is a shoe-in. It’s now up to city council to not impede the progress, as has become all too familiar in our stagnant city. Do we need new schools and a better education system in general? Absolutely. But… Read more »
Matt, if it’s a winner for the counties, why aren’t they helping pay for it? The arena deal is a loser right now, because with the big TIF we city taxpayers will be buying it one way or another, instead of the schools and roads which are the ACTUAL FUEL for a growing city.
So first off, the “TIF” is a tax all the businesses must pay in a large area. So if you are a bar, an axe throwing place, a brewery, whatever, you are being made to pay for your competition for entertainment dollars? Secondly-What makes anyone think the new arena is going to be worth all the expense? No college teams are near by that will want to play there, no pro teams, not enough concerts. How much revenue does anyone think minor league hockey and Arena football, plus a couple tractor pulls, are going to bring in? Spend the money… Read more »
I’m not saying this is a good deal or not, but please read up about how TIFs work so we can have a proper discussion. 1)It would only affect properties in the TIF area. So someone with an ax throwing business in Scott’s Addition is not going to paying part of the property tax into the pool to pay off the bonds. It would only be paid by an ax throwing business in the TIF district that theoretically would not have gone there if there hadn’t been the improvements paid for by the bonds that attracted new people to the… Read more »
Fine, let’s talk about the way things are “supposed to work.” Every year Richmond City Council is supposed to review changes in real estate assessments and, if there are substantial increases, reduce the rate accordingly to compensate property owners. When was the last time that happened? City council acts like it’s doing us a favor if it doesn’t raise the tax rate on top of the assessment increases. The folks in Richmond city government are a bunch of crooks and this thing needs to be stopped before it’s too late.
Reality is they can’t have the same budget every year. Roads, salaries, equipment, supplies all cost more over time. They are supposed to review it every year and can choose to leave it the same or choose to lower or raise it. If people’s assessments went down (like the did in the early part of the decade) does that mean you would want them to raise the tax rate?
Thanks for clearing this up. The area that they are proposing covers ” a district proposed to span much of downtown, bordered to the west and east by First and 10th streets, and to the north and south by Interstate 64-95 and the Downtown Expressway.” Wouldn’t this take out half of Jackson Ward? You’d be asking a few hotels and bars to pay a tax to subsidize a new hotel. Can’t the city just raise everyone’s assessment in the area, and therefore the taxes, even if this whole project is a 6th street level bust? And i’d still like to… Read more »
Why shouldn’t those who live in the city pay for improvements to the city? *Thinking Face Emoji* I live in what will be the TIF zone & I have no problem with tax increases as I will see direct benefit from this development via access to new amenities and a likely increase in property value. Those in the TIF should contribute to this development… lets buy into the future of the city we live in! Nothing is free. We either bet on the future and move forward, or we stay in the past. Right now in Navy Hill we’ve got… Read more »
Looks like someone gets it! It’s evident that many people prefer to sit stagnant “in the past” yet beg for money for schools, roads, etc… money that isn’t coming without something like this. Sad, really.
Josh, the county residents are paying for it when they go downtown for a meal (and pay the exorbitant meals tax) and then spend their money at the new coliseum. What else do you want, besides just having it handed to you for free on a silver platter? Oh and besides wanting new schools and roads with some invisible money the city has laying around.
Also, you pay nothing additional as a resident of the city.
I am a resident of the 5th district. A few days ago a certain candidate for city council came to my door and asked me what issues concerned me the most. I asked him about the real estate rate and the Navy Hill Plan. He artfully changed the subject both times and refused to commit to an answer. Big spending projects like Navy Hill may have been necessary 50 years ago when the inner cities were dying. They are no longer needed today. The government should step aside and let private investors do their job.
Funny this article failed to mention besides now costing $100 million more than proposed yet it has over 15% fewer apartments and 33% fewer affordable units in total than proposed. This price increase was over 9 months; wait until its 3 years in!! And the majority of the affordable units are not in the project area, not designated ,and will be built by parties unknown funded with a promise to lend! There is no legal requirement to build past the 280 units in the footprint. Higher prices, less deliverables and vague promises. Yeah that is our Mayor grand plan. And… Read more »