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.
“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.
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.