City reaches deal for redevelopment of Public Safety Building site

A rendering of the proposed office tower and complex that would replace the Public Safety Building. (Images courtesy of Capital City Partners)

Months of negotiations have reached a proposed deal for a multimillion-dollar redevelopment of Richmond’s city-owned Public Safety Building property.

Ordinances and legal documents reflecting the negotiated deal between the city administration and developer Capital City Partners were formally introduced to the City Council at its meeting Monday evening. The deal will be reviewed in committee and brought back to the council for consideration at a future meeting.

Capital City Partners, consisting of the development team that designed the former Navy Hill plan, has proposed a 20-story, VCU Health-anchored tower and mixed-use office complex that would fill the bulk of the 3-acre property at 500 N. 10th St.

The proposal is a variation of what was known as “Block D” in Navy Hill.

CCP had offered to pay about $3.17 million for the site based on an appraisal that put its “shovel-ready” land value at $8.5 million. The negotiated deal now calls for a sale price of $3.52 million, with CCP assuming responsibility for all demolition and public infrastructure costs.

The deal also requires a 10 percent deposit from CCP, which has already paid it, said Economic Development Director Leonard Sledge, who’s been representing the city in the negotiations since CCP submitted its unsolicited offer to the city in May.

In a presentation to councilmembers Monday, Sledge said the administration opted to negotiate with CCP directly — and forego a formal request for proposals from other developers — based on several factors, including the Navy Hill Advisory Commission’s recommendation to go forward with plans for the Public Safety Building site.

Also considered were public feedback received through the Richmond 300 planning process, the tenants secured for the development, and anticipated real estate tax revenue from the project — projected to total nearly $60 million over the first 25 years.

Slightly smaller project

Previously estimated at $350 million, the development now represents a capital investment of more than $325 million, according to Sledge’s presentation.

The scaled-down project calls for over 90,000 square feet of spec Class A office space, reduced from the original plan for a 150,000-square-foot spec space. The number of structured parking spaces also has been reduced from 1,900 to 1,200, with up to 200 of those to be made available for city employees.

The Public Safety Building as viewed along Ninth Street last year, with the under-construction VCU Health outpatient building rising behind it.

The rest of the proposed development remains largely the same, with 150,000 square feet of administrative and office space for VCU Health; a 125,000-square-foot space with 145 guest rooms for local nonprofit The Doorways; a 65,000-square-foot space with 60 guest rooms for Ronald McDonald House Charities of Richmond; and 20,000 square feet of ground-level retail including a pharmacy.

The development also would include 35,000 square feet of childcare space for VCU employees, with at least 20 percent of childcare slots made available at the same cost for city residents not employed by the health system or university.

The project would relocate the existing GRTC transfer station on Ninth Street to the surface parking lot across Ninth from the building. Plans also call for at least 40 percent minority business participation during construction and in building operation.

Other terms are aimed at providing job training and hiring local construction workers, with CCP required to create a $500,000 fund over five years to support small businesses leasing space in the development, student scholarships, and other forms of community assistance.

Of the 3 acres that would be sold to CCP, about 2.3 acres would make up the development footprint, while the rest would be used to extend and reconnect Clay Street, with that property dedicated back to the city.

Constructed in 1954, the building has been costing the city $389,000 annually to operate and has more than $20 million in deferred maintenance costs. It currently houses offices for the Department of Justice Services and the Adult Drug Court that would be moved to other city facilities.

The negotiated sale price of $3.52 million is based on an appraised value that results from deducting the building demolition and infrastructure improvement costs that CCP would assume. Those costs — about $3.42 million in infrastructure costs and $1.55 million for demolition, as well as risk to the developer — were subtracted from CCP’s appraisal of $8.5 million to produce a final appraisal amount of about $3.17 million.

DPR Construction and Richmond-based Canterbury Enterprises would be the contractors on the project. KieranTimberlake, a Philadelphia-based architect, is designing it along with Richmond-based SMBW.

VHB is signed on to handle site civil engineering and transportation planning, and Waterstreet Studio is handling streetscape and landscape design. Other firms on the project team include Richmond-based Sustainable Design Consulting and Chicago-based Omni Ecosystems.

The Public Safety Building development is projected for completion within 45 months after closing on the property. A development plan would be submitted eight months after closing, and demolition would start two months after that.

CCP is led by Michael Hallmark and Susan Eastridge, who were enlisted to design the Navy Hill plan. Hallmark, of Richmond-based urban planning firm Future Cities, and Eastridge, of Fairfax-based development firm Concord Eastridge, are also behind the proposed $2.3 billion GreenCity development in Henrico County.

Note: This story has been updated with more firms involved in the project’s construction and design.

 

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Bruce Milam
Bruce Milam
16 days ago

This is a much more desirable plan than before–a win-win for all parties. I hope the City can retire its debt on the Coliseum and dismantle that rust bucket during this forty some month process so Navy Hill can see another development rise on that pad. All of this accomplished without the City taxpayers incurring further risk!

John Lindner
John Lindner
16 days ago

40 percent minority business participation. Wow. That’s a lot.

SA Chaplin
SA Chaplin
16 days ago
Reply to  John Lindner

As Larry Elder points out: It is Black History Month, so why are we ignoring so much Black History. Elder goes on, “Bayard Rustin was one of Martin Luther King Jr.’s key lieutenants and helped to plan and organize the civil rights march in D.C. that culminated in King’s famous “I Have a Dream” speech. Rustin, an openly gay black man, opposed race-based preferences.”

Michael Dodson
Michael Dodson
16 days ago

In support of the deal but let me get this straight the Econ Dev director did a presentation on an item before introduction at Council?? Introductions come at the end of the formal meeting and are assigned committees. The clerk reads the items being introduced while everyone leaves (and in today’s world mutes). The items are never discussed before introduction. At least that is the excuse said has used for years when a member of the public asked about a piece of legislation was being introduced. Or did Council rearrange their agenda?

John Jones
John Jones
16 days ago

Take a break Michael don’t be so uptight

Michael Dodson
Michael Dodson
14 days ago
Reply to  John Jones

Not like their is any corruption or incompetency at City Hall. Maybe if the City wasn’t trying to cover up or constantly telling false stories or fighting FOIA releases it might help. You know despite a key ceremony those three new schools have no COs, the new roofs are leaking, the punch lists are HUGE, and the contractor and the city are have an almost $1M pay dispute. How come that never makes the news?

Carl Schwendeman
Carl Schwendeman
16 days ago

I’m glad the city turned a dead weight propriety into a new modern asset that will take in a new source of tax dollars. It is also techinally turning a outdated two story building and parking lots into a new public space so techinally this is pretty green instead of cutting down more forests for new office parks.

The City should permantally set aside a million a year from this new project’s tax fundign to fix city sidewalks.

Rob Smith
Rob Smith
15 days ago

40% minority contractors. This means 40% to Levar Stoney’s pals, much of which will be funnleed through to his campaign coffers. It also means that a lot of new LLCs will be formed where an established company will appoint a “minority” as a significant, but limited shareholder, just to get the bid. This is a corrupt racket that doesn’t help minorities, but merely drives up the cost of construction and puts money back in the hands of politicians.

Roger Turner
Roger Turner
14 days ago
Reply to  Rob Smith

If you want to help minorities it would be better to have a requirement that the workforce on the job be “X” percent minorities. (Although I will admit some trades like welding, electrical, etc. have a very low minority workforce). That would actually put people to work. I used to work for a contractor that did many projects with minority participation requirements and in every single instance the materials were procured through the “normal” vendors but the paperwork was just shuffled through a minority supplier. Other than the one person in the office the requirement did nothing to provide minority… Read more »

Matt Faris
Matt Faris
14 days ago
Reply to  Roger Turner

You don’t really want to know that anwer do you?

Donald Hodson
Donald Hodson
14 days ago
Reply to  Roger Turner

Even if that was the case, the minority contractors that the material procurement was “shuffled” through would still see the revenue and mark-up as a vendor. This is no different than a sales rep selling a manufacturer’s materials…they get mark-up as GC’s do not typically specialize in direct procurement from manufacturers. What type of business, minority or not, would turn away mark-up for writing purchase orders as a vendor on a great project. This is standard procurement practice worldwide, why not simply be glad that 40% is dedicated to disenfranchised businesses?

Donald Hodson
Donald Hodson
14 days ago
Reply to  Rob Smith

The city does not select the SWAM contractors to achieve the 40%…the general contractor and developer award these contracts. The mayor does not get involved in sub and sub-tier procurement….that is the definitive role of a general contractor. The GC just has to meet the obligations of 40% SWAM participation.