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.
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
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.
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
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.