Less than two weeks after a hastily called announcement that the proposed Navy Hill development was ready for public review, Richmond City Council is set to meet tonight in the second of two last-minute meetings to decide whether to put the $1.5 billion project’s financials to voters in a referendum in November.
Council on Tuesday scheduled a meeting for 6 p.m. today to hold a public hearing and vote on a proposed resolution calling for citizens to decide whether city revenues from a proposed tax-increment financing (TIF) district should be used to pay off bonds that would fund the public portion of the project, primarily the new 17,500-seat arena that would anchor the project and replace the aging Richmond Coliseum.
The arena, projected to cost $235 million and planned to be the largest in Virginia, is proposed to be funded through nonrecourse revenue bonds, which Mayor Levar Stoney has said would put the financial risk on bondholders and keep city taxpayers from being on the hook for the venue in the event of a project default.
If approved by a majority of council tonight, the resolution could result in a referendum being added to the ballot for Election Day on Nov. 5, though city staff cautioned that would depend on the circuit court filing an order by this Friday, the cutoff to do so.
Council member Kim Gray, who proposed the resolution along with Reva Trammel, said that time restraint was the reason why a special meeting was called just over 24 hours before it was held Tuesday afternoon. The meeting was held in the smaller fifth-floor meeting room due to renovations to council chambers. Wednesday’s meeting will be held at the Richmond Police Training Academy at 1202 W. Graham Road.
An expedited vote at Tuesday’s meeting failed due to a lack of a super-majority, with council members Andreas Addison, Michael Jones and Ellen Robertson and president Cynthia Newbille voting against it. Gray then called for a second special meeting, at which only a simple majority of five votes would be needed because the resolution already will have been introduced, eliminating the need for an expedited vote.
Council members’ concerns
Several council members took issue with the suddenness of the meetings, contending that they hadn’t been consulted or been able to review the resolution. Others scrutinized the need for a referendum on top of an advisory commission that council has appointed to review the project and a third-party review for which it’s allotted funding.
“If it goes out to a referendum and people come back and say we don’t want it, and the numbers suggest that it makes sense for whatever reason, how do we go against them then?” Jones asked. “…Why are we going to ask them their opinion through a vote and then not have to be held to what they say?”
Gray maintained a referendum would be advisory in purpose and would not bind council’s hands to vote one way or another. She added that the vote would have to do only with the bond funding and TIF district components of the project, not the project overall.
“I see no conflict between an advisory referendum, a commission who is going to arm themselves with the expertise and the membership that can take the whole deal apart and put it back together and give us a recommendation, and a third-party consultant,” Gray said. “I don’t see where any of this hurts our ability to make the most informed decision.”
The call for a referendum followed reports of a petition signed by more than 14,000 people requesting a similar action to change the city charter to ensure that about half of new revenues generated within the proposed TIF district would go toward improving city schools. The petition was circulated by Paul Goldman, a local attorney and former mayoral candidate.
Council member Chris Hilbert, who voted in favor of the resolution, took exception to the petition.
“I don’t like running the city through referendum, but I see a poisonous referendum out there now,” Hilbert said. “People that lose mayor races shouldn’t be trying to run the city through the sidelines.”
Referring to council’s vote, Hilbert said, “I don’t want this to seem like a dodge on doing our own job. That’s what we were elected for. But I appreciate that people have seen a lot of shiny objects come before this body and get passed without their input and without proper vetting, in their mind.”
“When this (project) comes to a vote, it has to be seven members of this body vote affirmatively for it, and that’s a tall order,” he said. “This thing was rolled out over a year; it’s unfortunate that it took that long. It’s just very concerning to me, all sides of it. My constituents are adamantly opposed to this.”
Councilman Parker Agelasto called out Stoney’s administration, which is sponsoring the proposal, for not providing council with an appraisal of the city-owned land that would be sold to NH District Corp., the local group of business leaders led by Dominion Energy CEO Tom Farrell that is pushing the redevelopment of the 10-block area designated for Navy Hill.
Noting an estimate from Capital City Partners, the master developer on the project, that $20 million has been spent on the effort thus far, Agelesto said, “I asked the city administration, had we got an appraisal on all this land that we’re about to sell for $15 million? There’s no appraisal.
“I’m sorry, I’m about to do a land transaction and I don’t have an appraisal? This is a city asset. We should have an appraisal,” he said.
Described as the biggest economic development project in city history, the public portion of Navy Hill would be funded in large part through the proposed TIF district, in which real estate tax revenue solely from new development and reassessments would be put toward paying off the bonds.
Initially proposed for the project’s 10-block area, the district has been enlarged 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. Stoney has said the district needed to be enlarged because 60 percent of the properties in the project area are state-owned or otherwise tax-exempt.
Raise money before bond sale
The rest of the development would be funded by NH District Corp., which would be required to show that $900 million in private investment has been secured for the project before the city can pursue a bond sale to finance the new arena.
The Navy Hill redevelopment also calls for more than 2,000 market-rate apartments, 480 income-based housing units, a 541-room hotel, a renovated Blues Armory building with a food market and ballroom, a new GRTC transfer center, and new retail and office spaces.
Initially proposed to be included in the bond funding, the Blues Armory work now would be funded through private investment, putting the risk of any operating shortfall on NH District Corp.
The project also includes two new high-rise buildings planned south of Broad Street, including an apartment building with street-level retail at 401 E. Broad St. and a mixed-use development in the 600 block of East Grace Street. The two south-of-Broad sites are within the enlarged TIF district, which also includes the new Dominion Energy tower on South Sixth Street and the site of the company’s planned sister tower nearby.
Following Tuesday’s meeting, NH District Corp. released a statement that read in part: “It’s disappointing that the Council is trying to circumvent the very process that they, themselves created because a few Richmond outsiders are telling them what to do. We’ll keep listening to the people of Richmond as this project moves forward and urge the Council to do their job and their own due diligence.”