Attendees raised signs for and against the project ahead of council’s votes on Monday. (Photos by Jonathan Spiers)
Three years after the project first came to light, a divided Richmond City Council on Monday effectively killed the $1.5 billion Navy Hill development plan amid calls for a do-over with more public involvement.
After an impromptu public hearing that stretched over two hours, council voted 5-4 to accept the evening’s meeting agenda without the project’s proposed ordinances included, as the same majority had recommended in a committee meeting a week earlier. The move pre-empted a hearing and vote that President Cynthia Newbille had said would occur at council’s next meeting later this month.
Council similarly voted Monday to adopt a resolution asking Mayor Levar Stoney to withdraw the Navy Hill proposal in favor of a new approach to soliciting proposals from developers, with the goal of revitalizing the area that includes the shuttered Richmond Coliseum and other underutilized city-owned land nearby.
President Cynthia Newbille, right, addresses council members during the proceedings.
“Tonight is not about saying no; it is about saying yes to a pathway forward that a majority of our citizens has said they want,” said Stephanie Lynch, who made up the majority along with fellow council members Kimberly Gray, Vice President Chris Hilbert, Kristen Larson and Reva Trammell.
Newbille voted the other side along with Andreas Addison, Michael Jones and Ellen Robertson.
In a statement issued shortly after the vote, Navy Hill developer NH District Corp. stood behind the project and process, maintaining it had listened to and responded to the community’s concerns.
“While we are disappointed that five City Council members rejected the project, we are proud of the proposal that we delivered,” the statement said.
“We were actively working on amendments to incorporate the suggestions we heard, but unfortunately, those who opposed the project voted to end it before learning more – which is regrettable,” the group said, adding later: “…this was a missed opportunity to address many of the issues we have heard about through countless hours of community engagement.”
Council members contended the length of time and complexity of the project had played the process out. Stating it had been said to her that council’s job was to work out a deal, Larson said in her remarks, “I feel like our No. 1 job is to represent the people.”
“I have personally spent time on this for the last six months. I think it doesn’t matter if you’re for or against this process, I think we are all worn out,” Larson said.
Newbille took exception to that position, maintaining that more work could be done before council’s next meeting in two weeks.
“Tired is not a sufficient response,” Newbille said. “Our city and our citizens deserve our due diligence on any project before us to fully vet it. Not to try is not acceptable, and tired is not a good enough reason for any of us.”
Years-long effort
Dominion CEO Tom Farrell discussing the project last year. (BizSense file photo)
The votes put an end to a years-long effort that came to light in mid-2017, when BizSense first reported that a group of local business heavyweights led by Dominion Energy CEO Tom Farrell was backing a plan to redevelop the aging coliseum as part of a larger mixed-use development.
Stoney threw his support behind the plan a year later, after issuing a formal request for proposals that attracted a sole response – from Farrell’s group. After months of negotiations between the city and NHDC, Stoney formally endorsed the project last fall, sending the negotiated ordinances to council for approval.
Mayor Levar Stoney at the official project announcement in 2018. (BizSense file photo)
At Monday’s meeting, council members who voted down the ordinances described that process as keeping the public in the dark for most of it. Their request sent to Stoney on Monday is intended to ensure a more transparent process from the start, they said.
“I do think there are opportunities here, and we are ready to move forward,” Gray said before the votes. “This process needs to be transparent and involve the people from the beginning…Let’s get more than one proposal on the table.”
The request to Stoney lists several aspects of the project that the patrons took issue with, including a proposed tax-increment financing district that would have pulled incremental real estate tax revenues from parts of downtown to help pay for city-issued bonds that would fund a new arena. The request also calls for development of a plan specific to the area, with input from the public, before soliciting new or amended proposals from developers.
Lynch said the public needs to be able to weigh in on whether it wants a new arena before the city solicits proposals for such a project.
“We have laid out a pathway forward, and that’s what tonight is about,” Lynch said. “It’s not nothing. It’s a reset and an opportunity to bring everyone back together. This has been one of the most divisive projects I’ve seen in this city.”
As proposed, Navy Hill was to consist of a 17,500-seat arena, a convention center hotel, 2,000 market-rate apartments, 280 or more income-based housing units, a renovated Blues Armory building, a GRTC transfer center, and additional retail, office and city-use buildings.
An aerial rendering of the proposed new arena and the surrounding buildings. (Courtesy navyhillrva.com)
The plan called for the arena to be funded using $300 million in bonds that the city would pay over 30 years using real estate tax revenues from new development and increased assessments within the TIF district. The project would be kick-started with $900 million in private investment that was projected to total $1.3 billion upon completion of the project.
The development agreement required NHDC to show the $900 million had been secured before the city can pursue a bond sale to finance the arena, projected to cost $235 million and planned to be the largest in Virginia.
Hours-long hearing
During the public hearing, dozens of speakers spent about an hour per side voicing support or opposition, with many in attendance holding up signs in favor or against the project. The capacity crowd required overflow seating in separate rooms in City Hall.
Among those who spoke in support of Navy Hill was Tricia Dunlap, a local attorney and business owner who said she was surprised by opponents’ “demonization of private enterprise.”
“Those who want a new RFP, you’re not going to get any responses,” she said. “Not after the way the ones here have been treated.”
Another business owner, AJ Brewer of Brewer’s Café in Manchester, noted the amount of private investment the proposal included.
“How do you pass up $1 billion?” Brewer asked. “Wow.”
Opponents maintained that the project would cost taxpayers long-term and wouldn’t immediately provide funds for needs such as school improvements, citing earlier remarks about a need for lights for Thomas Jefferson High School’s football field. At the start of the meeting, council had recognized the school’s team for reaching the state championship playoffs last year.
In its statement, NHDC said such needs would have been helped by Navy Hill.
“Our proposal would have revitalized downtown – creating thousands of jobs, investing $300 million in minority-owned businesses, building a historic number of affordable housing units, and creating a new stream of revenue to fund Richmond Public Schools, infrastructure improvements, workforce training, and more.
“We remain grateful to the four members of Council who carefully studied the project and collaborated to make it even better,” the group said.
Attendees raised signs for and against the project ahead of council’s votes on Monday. (Photos by Jonathan Spiers)
Three years after the project first came to light, a divided Richmond City Council on Monday effectively killed the $1.5 billion Navy Hill development plan amid calls for a do-over with more public involvement.
After an impromptu public hearing that stretched over two hours, council voted 5-4 to accept the evening’s meeting agenda without the project’s proposed ordinances included, as the same majority had recommended in a committee meeting a week earlier. The move pre-empted a hearing and vote that President Cynthia Newbille had said would occur at council’s next meeting later this month.
Council similarly voted Monday to adopt a resolution asking Mayor Levar Stoney to withdraw the Navy Hill proposal in favor of a new approach to soliciting proposals from developers, with the goal of revitalizing the area that includes the shuttered Richmond Coliseum and other underutilized city-owned land nearby.
President Cynthia Newbille, right, addresses council members during the proceedings.
“Tonight is not about saying no; it is about saying yes to a pathway forward that a majority of our citizens has said they want,” said Stephanie Lynch, who made up the majority along with fellow council members Kimberly Gray, Vice President Chris Hilbert, Kristen Larson and Reva Trammell.
Newbille voted the other side along with Andreas Addison, Michael Jones and Ellen Robertson.
In a statement issued shortly after the vote, Navy Hill developer NH District Corp. stood behind the project and process, maintaining it had listened to and responded to the community’s concerns.
“While we are disappointed that five City Council members rejected the project, we are proud of the proposal that we delivered,” the statement said.
“We were actively working on amendments to incorporate the suggestions we heard, but unfortunately, those who opposed the project voted to end it before learning more – which is regrettable,” the group said, adding later: “…this was a missed opportunity to address many of the issues we have heard about through countless hours of community engagement.”
Council members contended the length of time and complexity of the project had played the process out. Stating it had been said to her that council’s job was to work out a deal, Larson said in her remarks, “I feel like our No. 1 job is to represent the people.”
“I have personally spent time on this for the last six months. I think it doesn’t matter if you’re for or against this process, I think we are all worn out,” Larson said.
Newbille took exception to that position, maintaining that more work could be done before council’s next meeting in two weeks.
“Tired is not a sufficient response,” Newbille said. “Our city and our citizens deserve our due diligence on any project before us to fully vet it. Not to try is not acceptable, and tired is not a good enough reason for any of us.”
Years-long effort
Dominion CEO Tom Farrell discussing the project last year. (BizSense file photo)
The votes put an end to a years-long effort that came to light in mid-2017, when BizSense first reported that a group of local business heavyweights led by Dominion Energy CEO Tom Farrell was backing a plan to redevelop the aging coliseum as part of a larger mixed-use development.
Stoney threw his support behind the plan a year later, after issuing a formal request for proposals that attracted a sole response – from Farrell’s group. After months of negotiations between the city and NHDC, Stoney formally endorsed the project last fall, sending the negotiated ordinances to council for approval.
Mayor Levar Stoney at the official project announcement in 2018. (BizSense file photo)
At Monday’s meeting, council members who voted down the ordinances described that process as keeping the public in the dark for most of it. Their request sent to Stoney on Monday is intended to ensure a more transparent process from the start, they said.
“I do think there are opportunities here, and we are ready to move forward,” Gray said before the votes. “This process needs to be transparent and involve the people from the beginning…Let’s get more than one proposal on the table.”
The request to Stoney lists several aspects of the project that the patrons took issue with, including a proposed tax-increment financing district that would have pulled incremental real estate tax revenues from parts of downtown to help pay for city-issued bonds that would fund a new arena. The request also calls for development of a plan specific to the area, with input from the public, before soliciting new or amended proposals from developers.
Lynch said the public needs to be able to weigh in on whether it wants a new arena before the city solicits proposals for such a project.
“We have laid out a pathway forward, and that’s what tonight is about,” Lynch said. “It’s not nothing. It’s a reset and an opportunity to bring everyone back together. This has been one of the most divisive projects I’ve seen in this city.”
As proposed, Navy Hill was to consist of a 17,500-seat arena, a convention center hotel, 2,000 market-rate apartments, 280 or more income-based housing units, a renovated Blues Armory building, a GRTC transfer center, and additional retail, office and city-use buildings.
An aerial rendering of the proposed new arena and the surrounding buildings. (Courtesy navyhillrva.com)
The plan called for the arena to be funded using $300 million in bonds that the city would pay over 30 years using real estate tax revenues from new development and increased assessments within the TIF district. The project would be kick-started with $900 million in private investment that was projected to total $1.3 billion upon completion of the project.
The development agreement required NHDC to show the $900 million had been secured before the city can pursue a bond sale to finance the arena, projected to cost $235 million and planned to be the largest in Virginia.
Hours-long hearing
During the public hearing, dozens of speakers spent about an hour per side voicing support or opposition, with many in attendance holding up signs in favor or against the project. The capacity crowd required overflow seating in separate rooms in City Hall.
Among those who spoke in support of Navy Hill was Tricia Dunlap, a local attorney and business owner who said she was surprised by opponents’ “demonization of private enterprise.”
“Those who want a new RFP, you’re not going to get any responses,” she said. “Not after the way the ones here have been treated.”
Another business owner, AJ Brewer of Brewer’s Café in Manchester, noted the amount of private investment the proposal included.
“How do you pass up $1 billion?” Brewer asked. “Wow.”
Opponents maintained that the project would cost taxpayers long-term and wouldn’t immediately provide funds for needs such as school improvements, citing earlier remarks about a need for lights for Thomas Jefferson High School’s football field. At the start of the meeting, council had recognized the school’s team for reaching the state championship playoffs last year.
In its statement, NHDC said such needs would have been helped by Navy Hill.
“Our proposal would have revitalized downtown – creating thousands of jobs, investing $300 million in minority-owned businesses, building a historic number of affordable housing units, and creating a new stream of revenue to fund Richmond Public Schools, infrastructure improvements, workforce training, and more.
“We remain grateful to the four members of Council who carefully studied the project and collaborated to make it even better,” the group said.
Because you gave been working on this for six months and you are tired you shouldn’t give the people who have been working on this for three years the courtesy of having two weeks to respond to your concerns? Sorry to inconvenience you with work for the past six months, but treating people/businesses like this is not a good way to attract people/businesses to the City.
I hope the Council wasn’t too tired to find the money for that educational necessity, lights on a football field. That’s why some people wanted to kill this project? It should be obvious then that those people will never be satisfied enough with school funding to support anything else.
Agreed. It’s clear to me that five city council members have absolutely no idea how challenging it is run a business and/ or put together a plan such as what we had here. Their disrespect (whether intended or accidental) of the time and money invested by business leaders is a clear and unfortunate anti-business message that will be heard far beyond Richmond’s boundaries. Well, they own this project now. I hope they come forward with a new proposal fast enough to keep CoStar interested but I won’t hold my breath.
There are probably two dozen excellent reasons to deny this project. That councilmember was an idiot for letting “being tired” come out of her mouth as being a reason. But ultimately what matters most is this is not moving forward. Among the reasons 1) TIF of 80 blocks robs the general tax base of future revenue 2) An arena is a regional amenity yet cash strapped Richmond is left paying for it while Henrico and Chesterfield contribute nothing 3) Does a city that lacks any major league professional sports (and never will) as lead tenants need a 20K seat arena?… Read more »
1) that was the original #, it was far reduced. also the TIF is not forever… 2) the counties are paying for it – it’s called attendance and visiting stagnant old Richmond. 3) are you in the entertainment booking business or run a coliseum elsewhere? your point here is all personal speculation and an assumption at best. you know what they say about those, right? 😉 4) that’s like saying a millionaire shouldn’t hire someone to build them their yacht. 5) your “in general” is a bad generalization, not that it needed to be said. 6) risk? there is very… Read more »
While a millionaire may not be able to afford a yacht t today’s prices, if they could, they sure wouldn’t hire a builder with no experience building yacht!
The organizations who Navy Hill Group was working with to build the project had extensive backgrounds in developing large projects.
Thanks, James.. Then I would have no problem with them. But I stand by my comment regarding boat builders! 🙂
Matt a 30-year TIF is “forever” when it exceeds the useful life of the venue. Can you only image if in 2001 we were still paying for the 1971 Coliseum bonds. Okay so tell WHY weren’t these issues addressed BEFORE it went to Council for a vote. Why were ordinances (laws) for the implementation being put before Council if even the developer admits they have issues that need addressing.?? This was a BIG problem with the Redskin training center.. The facts were lead to believe and the ordinances adopted somehow came out differently as it went from Council to the… Read more »
They were trying to address the issues BEFORE it went to Council, but those 5 council members sped up the process because “they were tired” and held the vote early without giving them time to try and address their concerns.
1) NH will never develop organically because it lacks all of the qualities that support organic development. It does not have: many small to mid-sized parcels; historic district status that allows developers to get significant tax credits which make the ROI work (it’s harder and more expensive to rehab existing buildings than to build new); adequate or above-average infrastructure; privately-owned parcels. Further, organic growth is the least equitable type of growth because the only people who can afford to participate are those who are already affluent, to some degree. This project intentionally included job training/ workforce development, minority contractor set… Read more »
@Tricia – I have been reading Strong Towns for nearly a decade. While I acknowledge some of the differences in the building stock between NH and Scotts Addition I would disagree with your characterization that organic growth is not possible. Verizon Center and Nats Park are absurd analogies to a Richmond Coliseum. Verizon Center has two major league sports (NHL, NBA), sits on top of a subway station that connects it to the entire region, and is much larger city/region to draw fans from and concert goers from. Richmond should never be compared to a Philadelphia or Washington. People need… Read more »
Because you have been reading a website about TOWNS you are now an expert on what it takes to revitalize a hard urban landscape in the Central Business District of a City? That is almost as absurd as saying you don’t want to work on this anymore because you are tired.
Greensboro, New Haven and Birmingham are all below us on the list of metro areas. While I know we are not DC or Philly I would much rather emulate a higher ranked metro area in terms of population than a lower ranked area.
Again David, it doesn’t matter what the metro population is if only Richmond City is footing the bill for the public construction portion of this arena project. You may stubbornly want to punch up in weight class and pretend we’re a major city with a big budget but that is how cities bankrupt themselves. Richmond is still just 3 or 4 years removed from having former Major Jones neglect basic city services like mowing the lawns at parks and doing bulk trash pickup. And we all know the schools are deteriorating. Entertainment is not a luxury we can toss $600… Read more »
Our peer cities are Charlotte, Nashville, Raleigh/ Durham, Louisville, and maybe Cincinnati. We compete with these cities and failure to redevelop NH will hurt our competitiveness now and even more in the near future. “As workers retire, competition for young talent will increase. Without more affordable housing, Richmond will lag behind cities like Charlotte . . . and Nashville. . . .” Richmond Magazine’s 2020 Sourcebook page 40.
Richmond Magazine is a hype magazine for Richmond. Of course it is going to say we’re the greatest thing since sliced bread. I could maybe buy the Louisville thing… but come on… Charlotte has a major hub airport, NFL team and NBA team Nashville is the music city which is a tourism pull Richmond will never ever have…
Charlotte used to be our competition but we let them get way ahead of us as we lost so much to them. The only thing we beat them on was CoStar, only due to the bathroom bill. Now CoStar is likely to choose Charlotte again after all. Raleigh/Durham is also now leaving us in the dust. Our independent city system has held VA metros behind and will continue to do so.
Does anyone in favor of this project actually pay attention to the news before they spout off?
Nashville’s government is being taken over by the state because it can’t pay its debts. Look it up.
While I agree we aren’t at the level of Charlotte now and I’m no expert on how they achieved their growth, I think a blanket statement like we can’t compare ourselves to Charlotte because they are a “major” city misses the point. Charlotte used to be much closer to Richmond in size but they have left us in the dust. In the 1980 census the populations within the cities (not including metro areas) were much closer than they are today. Richmond was 219,214 and Charlotte was 315,474. Today Richmond has almost the same population within the City at 220,000+ as… Read more »
Byron – Charlotte is 300 square miles and Richmond is 62 square miles. Richmond has much less land than Charlotte had to grow and we also have entities like State government, U of R, VCU and other nonprofits taking up our larges swaths of land without paying property taxes.
You would have to add Henrico (245 sq mi) to Richmond to make it more equal to Charlotte. Talk to me when Henrico and/or Chesterfield join forces with us to pay for the arena.
Michelle, the comparison in size can be made of every VA city versus every other city in the country (except Baltimore City and St. Louis City). Charlotte especially has been continually annexing area around it. I used to be smaller than Richmond in land area until the 70’s. The separation of city and county kills regionalism and tax bases, hence why we have not gotten anything done since the 70’s and likely never will after last night.
Also, Charlotte has annexed a lot of Mecklenburg county. Unlike VA, Mecklenburg includes the population of the city of Charlotte, which is 1,093,901. The city of Charlotte has 872,498 residents. In actuality, that only leaves Mecklenburg county with 221,403 residents. If Richmond were allowed to annex the majority of Henrico and Chesterfield counties, it’s city population would be close to 900,000. Granted, Charlotte does have a larger overall metro area. However, this is what frustrates me when people seem to think of Richmond as so small when compared to other peer cities. Those other cities are vastly fluffing up their… Read more »
If our peers (in terms of cities) are closer to places like Greensboro, NC, Birmingham, AL and New Haven, CT then wouldn’t it be important to note that two of those cities have an arena? Greensboro has the Greensboro Coliseum with seating up to 22,000, Birmingham has the Legacy Arena with seating of about 19,000 and in New Haven they imploded the New Haven Coliseum in 2007 to turn it into, wait for it, a parking lot!! So, if two out of the three cities have an arena then why doesn’t RVA? And if you count the Siegel Center as… Read more »
Three things – are those arenas in Greensboro and Birmingham making money or losing money? Second, New Haven is about as close to NYC as RVA is to DC. New Haven probably realizes the big events/concerts are going to choose NYC over the overwhelming majority of the time. Similarly big events are going to choose DC over RVA much of the time. Lastly, look at the projects the NH group initially put out about projected event attendance at this arena. I believe than said 880,000 per year. Justin Griffin identified benchmark data that stated attendance numbers for arenas exclusive of… Read more »
Also – lookup District Detroit. Detroit handed over the keys to a major 50 block area of downtown for an arena development and mixed used district to the Ilitch family (owner of the NHL team). Six years later, even in a good economy, the only things built in the district are the arena (they built that fast), corporate headquarters for Ilitch’s business, and surface parking lots. Not a single residential unit has been built in six years or even broken ground on. Even I don’t think that NH would be a failure to that degree. That’s even lower than the… Read more »
You don’t want to compare Richmond to Washington or Philly, but you are OK with using DETROIT as an example??? C’mon do you really thin a ton of residential was getting built elsewhere in Detroit? Maybe that is because all the development went to Flint and their great water system (sarcasm). You can’t really compare Richmond, a city on an upswing, and Detroit, who is the poster child for zombie like urban landscapes.
To expect a smaller city arena to succeed like a bigger city arena is pure foolishness. But if a big city like Detroit can get defrauded at something like a TIF based development then a smaller city can certainly fail as well. If you can’t see the distinction you are being willfully ignorant.
Downtown Detroit is actually on the upswing minus this bogus District Detroit Project. If you subscribe to the Detroit equivalent of Richmond BizSense you would see more announcements for new offices and residential hi-rises going up than there are in Richmond.
Henrico built all of Short Pump’s infrastructure using a TIF district. And paid it off early.
My point re: the Verizon Center and Nationals Park is that the existence of these venues catalyzed investments in adjacent residential, retail, and restaurant development which created a positive feedback loop in support of the venues. This principle applies at Richmond-scale too and has successfully worked in Richmond-sized cities.
Short Pump is a place my spouse and I try to avoid at all costs. Is that you’re big plan? Bringing in the chains? You say you live in Church Hill like me. You’ve seen slow organic growth first hand then. Growth that was more rapid would lead to even faster gentrification.
Do you hate your neighborhood? Wish it was more like Short Pump? Or do you as a lawyer have a stake in some business or client related to NH and that’s why you are so bullish on this project?
I have no interest in Richmond looking like Short Pump. I cited it because it is an example of a successful TIF-funded project. It’s not my vision of “success” (except for its positive financial impact on Henrico) but it was Henrico’s vision and they succeeded. Church Hill’s inequities are mostly caused by organic, small-scale growth. Only people like you and me can afford to participate in the growth and that widens the wealth gap. I have ZERO personal or business stake in NH (including client interests) beyond the fact that I love Richmond and want it to succeed. I’m bullish… Read more »
In addition, as stated by councilman Addison, most of those renovations in Church Hill are through tax credits and will not generate revenue for 10 years. On top of that, they are pushing out the existing, though poorer, tax payers. A big piece I liked about NH was that it added much needed housing in a way that would not lead to pricing out current residents, as none exist in the area. This project was about so much more than the arena. The motto for NH probably should have been “People, not cars” as cars are all that resides in… Read more »
You’re mischaracterizing Church Hill. I’ve lived in two locations in Church Hill and monitored the real estate market in the neighborhood very closely. The tax credits are very few and far between. Maybe somewhere between 2-5% of the inventory that has turned over in the last several years has the 10 year tax abatements. As it turns out small-time home flippers don’t have the patience to apply for abatements that won’t directly impact their pocketbooks. Also, most of the new and renovated housing stock in the neighborhood went in empty lots and at properties that had been vacant for many… Read more »
Michelle, it is great to see a lot the development in southern Church Hill and the Fan are now filling empty lots, as old stock has been revitalized. Unfortunately, while we as a city needed that recovery, those tax cuts came at the cost of pushing out the poorer residents and continue to do so. This issue is now big in Manchester, Brookland Park, and other neighborhoods. New housing in areas like Shockoe Bottom, Scott’s Addition/Newtown, and Navy Hill help mitigate that by redirecting needed housing away from existing residents. Shockoe is about filled out and the rest of the… Read more »
I mean no offense, but I’m not sure that you or the councilman understand how the property tax abatement works. Properties receiving an abatement still pay taxes. Specificially, the city reassesses the property before and after a renovation project. Let’s say they decide a run down, older building was worth $50,000 before renovation and $250,000 afterward. The homeowner receives the difference between the two assessments as an abatement for 7 years (in my previous hypothetical, $200,000). They reduce their current assessment by the abatement amount, but that assessment can still increase (and it usually does, because so many vacant homes… Read more »
It is also the same way with TIF financing. They still pay taxes to the general fund on the portion that was the original assessment. Only the “Incremental” increase due to new development goes to paying off the bonds hence “Tax Increment Financing (TIF)”. The tax abatement program is essentially like a small TIF district where the property owner gets repaid by not having to pay the incremental increase in taxes. Sound familiar?
Lee, thank you for the explanation as I have not had a chance to fully vet his statements. What you describe is a little similar to the scheme in the TIF. Both keep the taxes from base assessment untouched (looking at city-except property in NH 2020 assessments that would add $1.6 mil.). The abatement has regressive discounts over time while the TIF collects 100% over new assessments but locks in to payment of the bonds. Perhaps some sort of compromise could have been worked out (though we were looking to also pull in State sales tax current not going to… Read more »
Nats Park especially has transformed that area of DC.
Restricted to the development district itself and no other properties. That has yet to be proposed here.
Michelle, while I can’t say that I agree with your list of reasons because they are largely personal opinion not base on objective research / due diligence, I do agree with your larger point… and for the same reason. The project sponsors did not produce any level of truly objective due diligence that supported demand for this. Not just the new arena, but the gobs of other development attached to it like pork projects we see thrown into the typical funding bill out of Congress. It seems like the classic “if you build it they will come” dream, where many… Read more »
@Alan – the Kansas City Power Power and Light example is pretty concrete. I read a more recent article about it two months ago. But a quick google search brings up this article from 2015 that reinforces the same stats.
https://www.kansascity.com/news/politics-government/article9530081.html
Alan, you’re ignoring the fact that we had commitments from Hyatt and VCU (among others). CoStar also wanted significant office space for their national HQ with 3,000 jobs. We will lose that opportunity now because even if these five council members “reset” with a new plan, it will not be timely to meet CoStar’s needs. Three. Thousand. Jobs. It wasn’t “if you build it, they will come.” It was “build it to harvest these commitments.” I also note that these jobs would have been within walking/ biking distance of the East End which would have helped people pull themselves out… Read more »
VCU always does what VCU does eventually anyway. Yes, they frequently try to get handouts first. But they aren’t going to choose to build their expansion in Glen Allen. Ultimately in the end they will build in Richmond near their existing campuses. As far as Costar – I think it is a mistake to chase specific employers with big incentives. But if you want carve off a parcel of this 10 blocks and offer to sell it to Costar as a site for their building i might support that. That could be done outside of the scope of N. Whatever… Read more »
This is the kind of argument that frustrates me because it wrongly assumes that CoStar is interested in owning land and building the Class A office space it needs. That is a MAJOR commitment for CoStar and it is outside CoStar’s “wheelhouse”. They want to be a tenant in a building owned and operated by another entity and are not going to directly own/ build. If they can’t find Class A space in Richmond that meets their needs (and it doesn’t currently exist) then they will go elsewhere.
OK, assuming you are right and that opportunity passes us by, is Co-Star and a hotel really worth the financial risk of this enormous project? And even if the project’s viability were fully vetted to satisfy a skeptic like me, don’t you agree that an approach that is more broadly inclusive of outside input would be more appropriate when asking that city revenues be put on the line? AND, it’s worth pointing out again, the City of Richmond does not have a good track record with these types of ventures.
Re: Costar – This “wheelhouse” comment seems like a distinction without a difference. Costar can find a developer who will buy the land and build the office tower. This happens all the time and doesn’t need to be part of a big 10-block NHDC mega project.
These handful of ‘commitments’ hardly support the economic viability of this entire project given its overall scope and physical footprint. Also, the examples you cite are not ‘all or none’ situations. I agree with Michelle’s comment about VCU not going anywhere. Co-Star already has a significant presence downtown, and if they wish to expand beyond their 5th street location there are other avenues available beyond this proposal. The city has proven time and again that it will provide incentives outside of this particular project. (MWV was a prime example) As for Hyatt, or more specifically their franchisee, that is a… Read more »
If VCU buys a parcel to develop it, then it is tax exempt. Under the NHDC plan, NHDC would retain ownership of the developed parcel w VCU as a tenant thus ensuring it contributes to Richmond’s tax base.
Costar passed up two Arena towns in Kansas City, MO and Charlotte, NC to pick Richmond due to its proximity to DC according to a 2015 press release by Greater Richmond Partnership. The GRP worked to secure a 4 million dollar grant from Commonwealth’s Opportunity fund to facilitate this relocation. Richmond Times Dispatch quoted Costar CEO Andrew Florance as saying the appeal of the WestRock building was its architecture, energy efficiency and location overlooking the iconic James. “We put a priority on cool space that reflects our values,” he said. Last week, the RTD again quoted Florance, “If there wasn’t… Read more »
Thanks for digging that up Chris.
Chris, also a big part of why CoStar picked us over Charlotte was the NC bathroom bill. While I agree an arena was likely not relevant to them, we did have one in 2015 so we were also an “arena town” (which essentially describes every medium-to large city).
Tell Stoney to reopen the coliseum then!
Chris/Michelle/Alan – you are all missing the point with CoStar. I’m afraid I can probably accurately age you just by your comments! CoStar is looking for top-level-talent that will stick around for a career. That’s what successful, growing companies do. Job churn is higher now than ever before. You don’t get and retain these types of workers because you have a cool office that overlooks the river. You get that by having a cool, vibrant, growing CITY. 12 breweries in Scotts Addition isn’t it, sorry. Have you been downtown after 6? How about to the NH area after 6? NH… Read more »
>> And also, as an aside, Michelle’s comment about “redirecting city money” to schools, etc. had to be a joke, right? WHAT MONEY?!? That 80 block TIF was totally stealing future revenue from the general tax fund that could have funded schools. For instance in an example of how they wanted to cook the books on that 80 block TIF. The new Dominion building that had already been completed in 2019 – the NHDC wanted all the tax revenue from that new building to go to the TIF. Yes, at the very last minute NHDC and Stoney tried to claim… Read more »
Michelle, the State bill would have been handled prior to the vote on the 24th. By striking the proposal prior to that deadline, the state bill had to be tabled. And yes, the new Dominion tower being in the TIF would have redirected $3.5 mil from the general revenue, of which an insane amount goes to RPS (two arenas worth last year). Unfortunately, if Dominion decides to not move forward with the second tower, then we will not only miss out on an additional $3 mil., but will end up with a drop of $600 mil. due to the loss… Read more »
Oh, and apparently the existing coliseum is still costing us $1.5 mil. annually while closed, never-mind the other city liabilities that would have been addressed.
Justin, the actual number is $500k per a previous Bizsense article (feel free to google it). Please stio pushing falsehoods. Enough already
Ashley, Style was just reporting $1.5 mil, but whichever. I would certainly trust BizSense more.
Costar is not fooling anyone. They’re only interested in playing the system for all the concessions and breaks they can get away with. Henrico will not welcome them if they leave the city because they already got burned by Figgie International. If Costar leaves the area, I say good riddance for bad rubbish. I hope they move to Northern Virginia and their employees spend their days sitting in beltway traffic.
Michelle, why should everything be in the counties? People in the counties already have everything and people would continue to complain that Richmond has nothing, especially for a capital city. We should get rid of independent cities in Virginia and be like the rest of the country. That is how other cities can have stuff built in their counties since the city is part of that county so they still benefit. What would Richmond benefit from Henrico or Chesterfield? Nothing just like Richmond sees nothing from Short Pump and Midlothian businesses. It is a shame we can’t be like other… Read more »
If nothing else, not reserving an area for a future coliseum downtown is short sighted at best. Go ahead and develop the rest of the 10 block area, but keep a portion that could be used for a coliseum in the future. As the center of a 1.3 million person region (not 220k!) having an event space like that at its activity and transportation center it important to everyone here.
David;
If its so important to 1.3 million people in the region, the they can all chip in. Expecting the city to front money for the benefit of the surrounding counties does not make a lot of sense to me.
Also, arenas are almost never a net positive for the surrounding area. The run rate is close to 99% of localities left holding the bag.
That is why I said if nothing else at least reserve the area. That way of there is some regional agreement then here will be a place for it. But to develop that entire area without saving a place for it is shortsighted in my opinion.
“I say implode the arena. Don’t build a new arena. Let someone build one privately in the counties if the market truly demands such an amenity can be built without subsidy. Then take this ten blocks and put out RFPs for several of them separately and sell the rest. This is a more market based approach businesses should favor if they weren’t always trying to get into the taxpayers pockets…” I imagine what you will likely end up seeing over the next 10 years is the profitable development they proposed………the office buildings, retail spaces and condos/apartments done in smaller phases… Read more »
GRTC has actually said in the last two months that this project may set aside a sliver of land for the transfer station it actually doesn’t provide a funding mechanism for the construction of such a new transfer station. The director also said that they were not sure one massive transfer station at this site was ideal. They felt multiple smaller transfer stations along the Pulse corridor could be sufficient. I’m not overly concerned about Blues Armory. But I’m sure it is either already eligible for historic tax credit or could go through the process to be eligible for such… Read more »
Last night marks the dawn of a new era for Richmond. No more ambiguous deals where the citizens are left paying the check. While the city may have sought these “if we build it they will come” projects during leaner times, Richmond is more vibrant than ever and it is not because of prior city government incentives. Hopefully the demise of Navy Hill signals that Richmond will hopefully be more prudent moving forward with economic development while requiring greater transparency and accountability for it’s citizens.
Last night marked the end of private investment for public gain in Richmond.
Yes Karl! Seems a lot of “biz sense” commenters have no business sense on how to properly handle a budget, debt payments, or contracts.
I also imagine the age cohort here is skewed toward the old way of doing things in the 80s and 90s. There’s a new generation emerging that sees a better and prudent way of doing things.
There is a reason why Charlotte is Charlotte and Richmond will always remain Richmond. No leadership, no vision
Charlotte has had its own issues with shiny projects that fail. Thank GOD we did not win the Nascar Museum https://www.charlotteobserver.com/news/local/article9252977.html
Philip, Ironically I played golf with the President of a moderately sized NC based bank a few years ago, he had spent considerable amount of time in Richmond when he was younger but most of his fifty year career in the Charlotte area. I asked him that exact question, “why do you think that Charlotte prospered so much compared to Richmond when they were the same size 50 years ago”. He said that there were five or six large fortune 500 type companies (half being banks) in Charlotte and the CEO’s of those companies basically had a running round table… Read more »
If this is such a great well thought out plan as NHDC claims, then let them finance the whole project. All those planned returns would fall in their laps, and they can laugh all the way to the bank. As I understand NHDC would finance all the buildings which would draw steady rents, while the city gets the new arena with pie in the sky projections. In addition why wasn’t a local or at least Va. based company found to manage the new arena? There are merits to the project, but the City of Richmond should fix its schools first… Read more »
You’re clearly missing the point of the TIF piece of the NH project as it is a smart and strategic way to finance large projects, such as NH. Granted, the council did not do a great job explaining that particular financing process to the general public. Richmond has had a repeated budgeting problem when prioritizing certain issues that have been dealt.
I’d agree with you if NHDC wasn’t already putting up a billion dollars.
Notice they finance everything except the arena, because the arena will never make money and they know it. Everything else being built would finance itself and eventually turn a profit. So yes, they are putting up a billion dollars. I say let them pay for the whole thing, and the city provide the infrastructure, the way it should be.
They did not finance the arena because it is a public amenity, much like the theaters we seem to have no problem sinking money into (with tax increases).
Only because they want it to be. Madison Square Garden is a private venue, so the new arena could be also. But since the numbers do not add up, they want no piece of that venue, only the profit making part. I am not against the Navy Hill project, I just believe the taxpayers of Richmond should share in all the profits, and not just absorb all the losses.
You can’t seriously be using MSG as your example, can you?
Sorry me and my city are unsuitable for the high standards of all you Navy Hill, Costar, and Dominion folks. When will you guys be moving? I have a realtor friend who would love to sell you houses. She seems to think the Richmond market is sizzling hot. Still waiting for Barbara Streisand, Miley Cyrus, and all the other drama queens to move to Canada as promised.
The tired city council’s vote is about self-preservation not serving their constituents. The city’s recent success is merely the result of a nationwide trend of employers desire to relocate to urban areas to attract the young, diverse, educated workforce that demand the amenities that can naturally be found in cities (chic restaurants, museums, walkable neighborhoods, parks, etc.). The recent development of these amenities have been subsidized through private donations, state and federal tax credits, and the public university system that has an endless supply of money from federally guaranteed student loans. The success you see certainly didn’t happen as a… Read more »
I largely concur with you with the exception of the planning office comment. I think the documented problem with permits, which is what I think you were referring to, is in the City’s permitting office.
So Justin – As I noted elsewhere above Kansas City had a project called Power and Light District. Not an arena but a similar “anchor” for a downtown redevelopment that required that city take out $300 million in bonds that would require $20 million a year to service the debt for 30 years (b/c it takes $600 million to pay off a $300 million bond over that time horizon). The KC project was forecasted by the developer and the “consultant” to raise the tax revenue required to make those payments. Instead 13 years later it is just limping along and… Read more »
13 years ago was the recession. Having been to the area, it is now building up nicely and encouraged me to spend money in the area when visiting. As others have stated, Nationals’ Ballpark (though it is a single use venue) is a great example of success and is the same designer of the NH arena. That area of DC used to require paying beggars in order to avoid damage to your car. Now it is exploding with development and the Nationals built a lot of support. It is an area that I now personally spend money in that used… Read more »
Correlation does not imply causation. We can both cherry pick examples to fit our own narrative. I can say, with conviction, not doing anything and expecting things to magically improve is foolish at best. Richmond is currently on an upswing, now is the time to double down when the odds are in our favor.
Anyone else notice the mention and shot of the “existing” coliseum at the beginning of the Gordon Ramsey show about the Richmond restaurant in Jackson Ward last night? Oh well.