Douglas Jemal’s company is offering to purchase 15 acres of the Navy Hill area. (Photos courtesy BizSense file and Douglas Development)
A D.C.-based developer that has been upping its local activity of late is looking to buy the bulk of city-owned land previously eyed for the recently defeated Navy Hill development project.
Douglas Development Corp. is offering to buy nearly 15 acres of the Navy Hill project site from the City of Richmond for $15 million, according to an offer letter obtained by BizSense on Monday.
The letter, dated Feb. 18 and addressed to the city’s economic development authority, offers $15 million in cash with a $1 million deposit for the site that includes the shuttered Richmond Coliseum, which Douglas would refurbish and bring up to current standards.
Douglas Jemal
The rest of the land would be “converted to an adaptive re-use” consisting of a mix of residential, office, retail and hotel uses, the letter states. It said the offer expires May 18 and is signed by company President and founder Douglas Jemal, along with a hand-written message that appears to say: “I am the right guy for the job!!”
In an emailed comment to BizSense Monday evening, Jemal said: “From every failure there can be success of something that can be built in our lifetime.”
Similar components, no TIF
Attendees came out in full force at the council meeting earlier this month regarding the future of the Navy Hill project. (BizSense file)
The unsolicited offer follows City Council’s vote to kill the $1.5 billion Navy Hill project proposed by NH District Corp., a group of local business heavyweights led by Dominion Energy CEO Tom Farrell. That group would have paid $15.8 million for the land, according to the development agreement it negotiated with the city.
Where that plan proposed replacing the Coliseum with a new arena, and using tax-increment financing (TIF) to pay city-issued bonds that would fund it, Douglas’s proposal would rehab the existing structure and not involve a public funding component, the company emphasizes in the letter.
“With zero cost to the city, our proposal will bring the existing Coliseum back to modern standards and will not include any Tax Increment Financing (TIF) from the City,” the letter states. “To reiterate, our proposal does not include any Bonds or new Taxes for the citizens of Richmond; and as a result creates new economic stimulus and growth that only benefits the City’s new found tax base.”
Of the Coliseum specifically, Douglas said it plans “to bring the existing structure back to its formal glory … transformed into a modern stadium while maintaining its historic integrity. Our goal is to keep the existing structure and renovate it in place.”
In addition to renovating the Coliseum, the proposal calls for a mixed-use development with similar components to Navy Hill, including a “high occupancy” hotel to support the Greater Richmond Convention Center, retail and Class A office space, a grocery store, and a transit center to be leased back to the city.
It also includes an unspecified number of apartments and condos with varying price ranges, with 10 percent designated for low-income housing. That percentage is below the city’s required 15% threshold for new multifamily residential development.
Click to read the offer letter.
In a memo to Mayor Levar Stoney and council, city administrators note that the proposal does not specify addresses of property to be purchased or economic benefits to the city such as projected investment value, tax revenue and job creation. It also does not mention minority business participation, which was one of several requirements the city made for Navy Hill.
Because the proposal is incomplete, the memo states, the city’s economic development department is following up with Douglas to acknowledge receipt and request the missing information.
City code requires that council declare city property surplus before an unsolicited offer on that property can be considered. While the Coliseum was shuttered in early 2019, the building has yet to be declared surplus. City code also requires that the council solicit additional offers, either through an invitation for bids or a request for proposals, before it can respond to an offer.
Firm ramping up activity
Douglas Development plans to convert the office building next to Capital Ale House into a hotel. (BizSense file)
Primarily active in and around D.C., Douglas has amassed a considerable portfolio in Richmond, with holdings including several properties along East Broad Street and the Central National Bank building, which it redeveloped as apartments.
The firm recently started work on a hotel conversion of a 12-story building at 629 E. Main St. It also is turning the former Stumpf Hotel building into apartments.
Council met Monday and was already scheduled to discuss next steps for the Navy Hill site, in light of an ordinance council adopted requesting a new RFP process. It also asked that Stoney’s administration complete a plan of the Navy Hill area, conduct an appraisal of the parcels, and assess existing and required infrastructure before initiating that process.
During Monday’s discussion, council member Stephanie Lynch said that process needs to play out despite Douglas’s proposal, adding that a discussion needs to be had as to whether Richmond should be “an arena city.”
Council President Cynthia Newbille said she’s requested that a timeline laying out how that process would play out be presented to council at its next regular meeting March 9.
Douglas Jemal’s company is offering to purchase 15 acres of the Navy Hill area. (Photos courtesy BizSense file and Douglas Development)
A D.C.-based developer that has been upping its local activity of late is looking to buy the bulk of city-owned land previously eyed for the recently defeated Navy Hill development project.
Douglas Development Corp. is offering to buy nearly 15 acres of the Navy Hill project site from the City of Richmond for $15 million, according to an offer letter obtained by BizSense on Monday.
The letter, dated Feb. 18 and addressed to the city’s economic development authority, offers $15 million in cash with a $1 million deposit for the site that includes the shuttered Richmond Coliseum, which Douglas would refurbish and bring up to current standards.
Douglas Jemal
The rest of the land would be “converted to an adaptive re-use” consisting of a mix of residential, office, retail and hotel uses, the letter states. It said the offer expires May 18 and is signed by company President and founder Douglas Jemal, along with a hand-written message that appears to say: “I am the right guy for the job!!”
In an emailed comment to BizSense Monday evening, Jemal said: “From every failure there can be success of something that can be built in our lifetime.”
Similar components, no TIF
Attendees came out in full force at the council meeting earlier this month regarding the future of the Navy Hill project. (BizSense file)
The unsolicited offer follows City Council’s vote to kill the $1.5 billion Navy Hill project proposed by NH District Corp., a group of local business heavyweights led by Dominion Energy CEO Tom Farrell. That group would have paid $15.8 million for the land, according to the development agreement it negotiated with the city.
Where that plan proposed replacing the Coliseum with a new arena, and using tax-increment financing (TIF) to pay city-issued bonds that would fund it, Douglas’s proposal would rehab the existing structure and not involve a public funding component, the company emphasizes in the letter.
“With zero cost to the city, our proposal will bring the existing Coliseum back to modern standards and will not include any Tax Increment Financing (TIF) from the City,” the letter states. “To reiterate, our proposal does not include any Bonds or new Taxes for the citizens of Richmond; and as a result creates new economic stimulus and growth that only benefits the City’s new found tax base.”
Of the Coliseum specifically, Douglas said it plans “to bring the existing structure back to its formal glory … transformed into a modern stadium while maintaining its historic integrity. Our goal is to keep the existing structure and renovate it in place.”
In addition to renovating the Coliseum, the proposal calls for a mixed-use development with similar components to Navy Hill, including a “high occupancy” hotel to support the Greater Richmond Convention Center, retail and Class A office space, a grocery store, and a transit center to be leased back to the city.
It also includes an unspecified number of apartments and condos with varying price ranges, with 10 percent designated for low-income housing. That percentage is below the city’s required 15% threshold for new multifamily residential development.
Click to read the offer letter.
In a memo to Mayor Levar Stoney and council, city administrators note that the proposal does not specify addresses of property to be purchased or economic benefits to the city such as projected investment value, tax revenue and job creation. It also does not mention minority business participation, which was one of several requirements the city made for Navy Hill.
Because the proposal is incomplete, the memo states, the city’s economic development department is following up with Douglas to acknowledge receipt and request the missing information.
City code requires that council declare city property surplus before an unsolicited offer on that property can be considered. While the Coliseum was shuttered in early 2019, the building has yet to be declared surplus. City code also requires that the council solicit additional offers, either through an invitation for bids or a request for proposals, before it can respond to an offer.
Firm ramping up activity
Douglas Development plans to convert the office building next to Capital Ale House into a hotel. (BizSense file)
Primarily active in and around D.C., Douglas has amassed a considerable portfolio in Richmond, with holdings including several properties along East Broad Street and the Central National Bank building, which it redeveloped as apartments.
The firm recently started work on a hotel conversion of a 12-story building at 629 E. Main St. It also is turning the former Stumpf Hotel building into apartments.
Council met Monday and was already scheduled to discuss next steps for the Navy Hill site, in light of an ordinance council adopted requesting a new RFP process. It also asked that Stoney’s administration complete a plan of the Navy Hill area, conduct an appraisal of the parcels, and assess existing and required infrastructure before initiating that process.
During Monday’s discussion, council member Stephanie Lynch said that process needs to play out despite Douglas’s proposal, adding that a discussion needs to be had as to whether Richmond should be “an arena city.”
Council President Cynthia Newbille said she’s requested that a timeline laying out how that process would play out be presented to council at its next regular meeting March 9.
Interesting indeed. Seems like a low offer but would be an awesome opportunity.
Isn’t this the same developer that owns several derelict/ boarded-up buildings downtown?
Also the developer who successfully restored the 23 story Central National Bank building on Broad St. And is about to turn another historic building (DEQ) downtown into a 210 room Hyatt hotel.
So their previous work justifies the City not following the same RFP process that they just used as a reason to boot Navy Hill? This proposal should be shelved until the RFP process the Council and others wanted for Navy Hill is followed.
Yes. If you want a picture of what a rehabbed coliseum would look like under Jemal, take a look at the 100 and 200 blocks of east Broad Street. It would look like it does now, but perhaps with some more rust, graffiti and plywood over the doors.
Richmond would have to be insane to turn this property over to Jemal.
If I’m not mistaken, Douglas Jemal, served time for bribing DC Councilpersons. If the City is entertaining offers, the price offered is a joke. Let’s start at $30m.
Marcus, the majority of Richmond’s past leadership and council members in a 30 year span have been found guilty of some sort of criminal behavior.
So by your reasoning this person should be a perfect match for the job.
Are you or your firm offering $30mil or are you just complaining to complain about the current offer on the table? I’m confused what you are suggesting.
I chuckle at the down votes on my comment. Is it because I was wrong on our past legal troubles for city leadership? Has someone thrown down a $30mil offer?
I love the typical attitude of “I want to complain, but I also don’t want to do anything or put my $ in the pot”
Like Bruce said, it’s worth at least vetting.
Or we can continue to complain and hand wring over ways the taxpayer can be on the hook for a larger deal. We are our own worst enemy.
You are mistaken. Per Wikipedia (weak source) he was convicted of wire fraud, but served no time. The other charges (bribery, tax evasion) were dropped. He has done lot of development in DC over the years.
https://www.washingtonexaminer.com/dc-developer-douglas-jemal-sentenced-to-probation-fined probation for wire fraud
So the city would actually MAKE money on the deal and we still get a coliseum? What an amazing concept! 😆
How do you know the City would make money until all the figures are in and properly vetted by at least 3 agencies, 2 consultants, 2 committees, 20 public hearings are held and then reviewed by the public and council for six months (or at least until they get tired).
Because unlike the one you are referencing, this one is simple and easy to understand! Duh!
Jeff, I believe David was joking. Should I say “Duh!” or is that too obvious? 🙂
Matt – you give other readers too much credit as if they could read between the lines. I’m simply reinforcing the sarcastic remark. Double duh! 🙂
Jeff, my previous comment was tongue in cheek, but in all seriousness how do you know this deal is simpler? Have you seen an appraisal to know what the value of the land is so the City gets the best value of the land for schools? Have they at least left a location for a long needed transfer station? What are the specifics of what and when they are required to do with the coliseum? What requirements do they have for minority contractors? What requirements will they have for affordable housing (their current proposal is already deficient of city requirements)?… Read more »
Since no city funding would be involved, would the city even have the leverage to make many of the prior demands that existed in NHDC (or a potential RFP)?
Justin, City Funding is involved. It is their land. They can make whatever demands they want before they sell their land. Especially if they sell it for below market rate.
@David – As I mentioned elsewhere this needs to be vetted. It might not be the best fit. Douglas Jemal has done a vast amount of great work in DC. But he definitely moves at his own pace. Still this sudden harping on whether the city is getting the best sales price for the land misses the point. Jemal would pay for the renovation of the arena instead of Richmond City paying $20 million per year for 30 years on the bonds for the construction of a new arena. That’s $600 million in tax revenue saved!! Not having to pay… Read more »
Michelle, I find it very hypocritical that those calling for the Navy Hill development to be booted because it didn’t go through a long enough RFP process are now all ready to “vet” this proposal without it having gone through any kind of RFP process. In reality this should not be vetted until the full RFP process has been followed and then it can be looked at along with any other submissions. I would also note I said nothing about this one paying for a transfer station, but was more interested in that they at least reserve such a site… Read more »
I’m 110% fine with waiting for another RFP. But I’m also not going to sit silent as NHDC supporters spew BS. Especially after we were told “oh this is the best we could ever do. And if we don’t rubberstamp it no one will ever be interested again.” Somebody will develop this site. And that investment will trigger new tax revenue. That revenue will then go into the general fund rather than paying off bonds. Besides, Stoney was pushing an 80 block TIF for over a year. Only like 2 or 3 weeks before the council had to decide was… Read more »
Michelle, forgive me I was not aware you were such a financial guru. Only recently did I learn that you reading a website titled Strong Towns made you an expert in City Planning. Perhaps they should have you personally vet any future proposals….
Please do not represent data and arguements as fact, such a your last paragraph, when they are only your opinion.
The studies on arenas and stadiums being financial losers is everywhere and not hard to find. And in this case without NHL/NBA as lead tenants the math is even a bigger loser than in those much studied examples…
NHDC projected annual attendance of this new arena as 792K. Old Richmond Colesium in its last year of full operation was 130K. If you compare attendance numbers of other cities using pollstar data, backing out their major league sports tenants, you will find that 792K would rank top 10 in the world. I love RVA but do we strike you as a top 10 in the world kinda city? That number is almost the combined total for Charlottesville, Raleigh, Baltimore, Charlotte and Louisville put together. NHDC concocted this projection together to make it look like the arena was not a… Read more »
Agreed. Just go the event calendars of some of these arenas across the country. In april Austin Texas literally just has a one night Michael buble concert and 2 nights of monster truck. Venue is empty the other 27 days. A typical month for Charlottesville and Louisville seem to be 3 concerts and one or two nights of something like monster trucks or Disney on ice. These arenas are empty 20-25 days a year. They are not making money. They are just desperate appeals to appease the local business communities.
Yes, I know there are many stats that can be pulled from other places, but then statements like this are not those facts: “The government tax receipts of those events plus whatever modest uptick hotels/restaurants get doesn’t come close to making a dent at todays construction prices. If you’re lucky it covers the operating costs plus a little extra…” Do you know how much construction costs are today? Do you know what the tax receipts would be? Do you know what the operating costs would be? That statement is an opinion presented as fact and it often debases people’s arguments… Read more »
On other Biznews threads about NHDC I have brought specific facts about Kansas City Power and Light District. A similar entertainment anchor for downtown revitalization in Kansas CIty that was projected by consultants to bring in $20 million per year in tax revenue by consultants. So KC went ahead with taking on $20 million per year in debt servicing. Now 12-13 years later the Power and Light District continues to provide only $5 million per year in tax revenue. The consultant group who advised on this failure is also the same consultant who gave thumbs up on NH. No thank… Read more »
David, all you have to do is read Navy Hill’s own analysis (or lack thereof) to realize it was 1,000 pages of BS.
Additionally, part of the argument is that if you do not have a minor league sports teams sucking up dates you have more dates for other events than those arenas did. It can go both ways. Were NHDC’s predictions rosy? sure. Are other people’s predictions of being the same attendance as the old coliseum true? no way. Do this math: 1 event per week for 10,000 people (remember it could hold 17k). At that simple rate attendance would be 520,000. I would think that might be achievable for a new arena since that doesn’t even count shows that run multiple… Read more »
“Additionally, part of the argument is that if you do not have a minor league sports teams sucking up dates you have more dates for other events than those arenas did. It can go both ways. ” 520K is pretty rosy of you. If it were that easy why aren’t other small/medium cities raking in half million in attendance? You don’t base public spending on projections that defy the comparable data (certainly not doubling the comp data). And besides a minor league hockey team was announced to be on board if the arena was built. Somewhere between Baltimore and Louisville… Read more »
So now you want to bring in a sports team to that equation. First you don’t but now you do? Please get your arguements straight. Obviously if there is a sports team the equation would change and the original projections would change. Sure somewhere between Baltimore and Louisville would be appropriate if there is a sports team, but if there is no sports team than that opens up 40-50 dates that can be added to that non sports attendance. As for why wouldn’t every town build one? Obviously because they are not surrounded by a metro area of 1.3 million… Read more »
My very first post about arena attendance allocated four nights of the month to minor league sports. I’m not changing any arguments. Now as far as the pollstar data that has to be used without sports for apples to apples comparison. But it is better to have data and account for its scope than purely pontificate and let people claim RVA attendance will be some entirely made up number. Baltimore has twice the metro area population of Richmond. Yet you think Richmond is going to draw 4 times the event attendance? You also seem to be blissfully unaware that arenas… Read more »
David;
Michelle said , ” And besides a minor league hockey team was announced to be on board if the arena was built. ”
She is not indicating, as you imply, that SHE wants a hockey team, just pointing out that that one franchise said they would relocate if it was built.
David;
Are you saying there are 10K people a week in Richmond now who would go to one event a week?
Or are you saying there are events that would pull 10K people into Richmond?
David, it’s clear you didn’t bother to read the latest projections. Lower your average estimate by 4,000 and recalculate.
MATH (Make America Think Harder)
Can confirm. 99% of arenas are NOT good for the city that builds them.
Five minutes on google will show study after study after study.
I still haven;t heard why we need one. does it really hold the quality of life in Richmond down if we don’t have Brittany Spears come play here?
We’ve been without an arena over 15 months now. Seems like everyone is doing just fine without it!
“We’ve been without an arena over 15 months now. Seems like everyone is doing just fine without it!”
I certainly have. With about a dozen season tickets, we used to be regulars at restaurants in Eastern Jackson Ward and now have not been since. Between the coliseum closer and the meals tax increase, I have personally cut my city spending in half! Granted, a lot of that has been redirected to Henrico and DC but overall it has been a great savings. MATH!
MATH (Make America Think Harder)
Please David, stop pretending like there was a REAL RFP process.
Please show me where I said there was one. All I’m saying is if people want a “real RFP process” then the Douglas proposal should go through that too. Any arguement to the contrary would be highly hypocritical.
“Refurbishing” the Coliseum is like trying to make a tuxedo out of an old, mildewed shower curtain.
I have a hard time envisioning what could be done to that dungeon to bring it to the same standards as a JPJ arena without it costing more than building new.
Was it stated that the “JPJ” standards would be met? t would seem that renovation of a 50 year old building would be to a different standard.
” transformed into a modern stadium while maintaining its historic integrity.” Modernizing the arena would draw comparisons to other modern arenas.
Ian, I understand this, and I hope it happens. but a reno is far more limited by the bones of the building than a totally new building. There are some things (seating sight lines, etc.), that just can’t be replicated. As one exxample: Horizontal seat widths can be expanded, but vertical height or expanded leg room is an entirely different story.
They had better make this venue comparable to JPJ. Who do you think they will be in direct competition with to book concerts/events? If they were to accept compromised standards because of the age of the facility, then what the hell is the point?
I would be willing to be anyone that if this deal goes through there will be a press release in about two years saying that “after further consideration and due diligence, we have determined it’s not economically feasible to renovate the existing coliseum” and they will want to demolish it and put up office/retail units in it’s place. I am no expert on arena’s but are they any examples of renovated 50 year old arenas that are thriving with a recent economical renovation? (I don’t think this developer plans on spending 100’s of millions on a refurbish). For the record… Read more »
My understanding is the Greensboro NC arena was built in 1959 and has been refurbished. Don’t know what they paid. But they aren’t exactly an economic powerhouse so it probably wasn’t crazy. It has hosted the men’s NCAA tournament 23 times in its history and and women’s tournament 12 times since 2000. Cincinnati has a 45 year old arena it still uses. Hartford CT and Providence RI still have arenas from that timeframe. I don’t feel compelled to scour the continent for more examples. But I would guess many cities without NHL/NBA still get by with their original 1960/70s arenas.… Read more »
The Greensboro arena holds 23,000 people and the area has a metro population of 800K (60% of Richmond) which is interesting because many people questioned “why do we need a 17K arena during the NH proceedings. It host 1100 event annually according to their website, again many people said “what would we do with an arena that size without a major league team?”. Their arena however is actually a “complex” that includes a convention center, aquatic facilities, amphitheater, etc., it’s driver of economic activity in that area. Interesting that according to their website one expansion was funded by local gov’t… Read more »
Greensboro is a special case because it is the largest venue by number of seats (23500) in the entire nation. Do I think if Richmond had a brand new arena with 17500 seats it would get an occasional basketball tournament every 4 or 5 years? Sure. But its not going to replicate the niche success Greensboro’s has carved out. Also worth nothing the Greensboro Coliseum is surrounded by like the equivalent of 6 or 7 city blocks worth of surface parking. Not exactly the walkable downtown community NH aspires to be.
How can you talk about the Greensboro Coliseum and not mention it being the historical home to the ACC Tournament?
I thought the business community would stop being interested in Richmond because…Navy Hill.
Love all the public input that went into this proposal!
Like the offer or not, one might should consider that this man completely revamped the New York Avenue corridor in DC when no one else would touch it. He can prove what hes capable of doing. Hes offering to take all the risk himself too. Time lines would need to be placed on his proposal though so that buildings don’t sit for 20 years. As to the proposal to rehab the arena . . . I doubt anyone knows it’s true condition. It might be a $50 MM rehab as opposed to a $250MM replacement (numbers pulled out of air),… Read more »
Good points Bruce. But, with Scott’s Addition and Manchester land selling in the $3 million to $4 million per acre, the Navy Hill district has a significant value to be leveraged for RVA’s benefit.
I’d say it’s WAY low given the multiple millions per quarter acre commercial properties have been going for in the city.
Lipstick on a pig and redevelopment on the cheap. Just say NO!
The colosseum has got to go! This is not “similar” to the original plan by any stretch of the imagination.
John;
What is your background in regards to arenas?
Why are you so sure the Coliseum can’t be upgraded?
This is great news, hopefully an agreement can be reached where the purchaser recoups their costs and later profits from tax breaks and possibly subsidies from this sale.
So exciting, hopefully the city will get some luxury apartments also, can’t wait to see what these movers and shakers bring us next, keep it up guys!!!!
The Navy Hill proposal shed light on structural shortcomings of the existing Coliseum.. The truss system was not designed to support modern lighting and sound equipment so tour operators face major costs and logistical hurdles requiring an extra 2 days to set up and break down a show. Hence, tours go up I-64 to JPJ. Anyone thinking they can fix the coliseum with rustoleum and a bathroom re-do has not done their homework.
The Navy Hill proposal was not exactly an unbiased source of information.
I would want unbiased confirmation that the “structural shortcomings of the existing Coliseum” are indeed to expensive to overcome.
total lowball offer
An offer that spares the city of Richmond from having to pay $20 million per year for 30 years on the bonds for a new arena. That’s a lot of freaking savings…
I don’t know that this is the best offer we can do or the best partner to get in bed with. It should be vetted. However it does strongly suggest that this nonsense that the NHDC offer was our only hope and that no one would ever want to work with us if we turned it down to be fake news.
Then how come he did not submit before?
Maybe he wasn’t a political contributor to Stoney.
Whether you like it or hate it this offer does two things; 1) it shows other developers have interest in a deal and 2) that this should force the City do an new RFP for the site. T And if the Mayor does nothing with this offer and doesn’t follow code; it shows us voters his true colors.
If this is a low ball offer, which it appears to be, I would view this the opposite way; a developer sees an opportunity to exploit Richmond’s inability to do big projects and offered pennies (15 million) on the dollar for land that was going to be tied to a 1.5 billion dollar plus project. And the next offer from the next ‘player’ could be worse.
Douglas does good work however, and played a large role in transforming DC. Best move would be to have the land appraised and figure out what the real value is before trying to sell.
Scout Cho, the move Richmond should do sounds so basic to anyone who owns a home. Why the city administration was incapable of doing this first thing, before the “RFP” three years ago, is beyond anyone!
Also, solar panels should be required on the roof of the refurbished coliseum. The building design is perfect for solar panels. Has any other city done this? It’d be a Richmond first