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 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.