Henrico forms financing authority for arena-anchored GreenCity

A conceptual rendering shows the arena in relation to other buildings in the proposed GreenCity mixed-use development. (File images courtesy of Green City Partners)

Another step toward development of the massive GreenCity project was taken this week in Henrico, as county supervisors established a community development authority to help finance initial work for the mixed-use project that’s to include a new arena for the region.

At their regular meeting Tuesday, supervisors adopted a resolution creating the CDA and appointing its initial five-member board.

The CDA is tasked with issuing 30-year bonds to finance a portion of the arena and infrastructure improvements within the 93-acre Best Products site, which makes up an initial phase of the larger 200-acre GreenCity development. Tax revenue generated from that phase would be used to pay off the bonds, along with revenues generated from the arena.

Similar to TIFs, or tax-increment financing districts, CDAs are a financing tool that governments can use to generate tax revenue to support a development as it progresses. Henrico has used CDAs with three other developments in the county: Short Pump Town Center, White Oak Village and Reynolds Crossing.

In presenting the resolution to supervisors Tuesday, County Manager John Vithoulkas described the creation of the GreenCity CDA as “a significant moment in this county’s history.”

A site plan of the GreenCity project.

In addition to the arena, which would anchor the development, GreenCity is planned to consist of 2.2 million square feet of office space, 280,000 square feet of retail, two 300-room hotels, green space, and up to 2,400 residential units.

Pegged at $2.3 billion, the so-called “ecodistrict” village would take shape along the east side of Interstate 95 between Parham Road and Interstate 295, filling 200 acres that include the Best Products site and Scott Farm, currently owned by Bill Goodwin’s Riverstone Properties.

The Best Products site is owned by Henrico’s Economic Development Authority, which in November amended a purchase agreement with Green City Partners that allows the developer to purchase the 93-acre site in three installments over a two-year period. The agreed-upon purchase price remains $6.2 million – the amount the county paid for the property in 2011.

Scott Farm would be purchased separately by the developer from Riverstone, which bought that land in 2015 for more than $6.4 million.

While restricted to the Best Products site initially, the CDA district could be expanded to include additional property over the course of the project, according to the resolution.

The non-recourse bonds that the CDA would issue are estimated to total $295 million. Proceeds from the sale of the bonds would be leveraged with private equity obtained by the developers, Green City Partners, to finance the $250 million arena.

The 17,000-seat arena would effectively replace the shuttered Richmond Coliseum, a 50-year-old venue that’s set to be demolished as part of Richmond’s planned City Center redevelopment project.

A rendering of the former Best Products headquarters repurposed as a ‘living building’ with sustainable development features such as solar energy panels.

Initial development for GreenCity also would include repurposing the 300,000-square-foot former Best Products headquarters as a so-called “living building,” meaning it would generate more energy than it would use, among other environmental sustainability features.

The Best Products building rehab is slated for completion in 2024, while the arena, the first of the two planned hotels and other initial development are targeted for completion in 2025. Full buildout of the entire GreenCity project is anticipated in 2033.

The CDA scenario is different than Richmond’s former Navy Hill proposal, which hinged on taxpayer support through a proposed TIF that would have stretched well beyond the project area. That plan, which a majority of the Richmond City Council rejected in 2020, was centered on a new arena to replace the Coliseum.

Susan Eastridge and Michael Hallmark in 2019. (BizSense file)

Green City Partners is led by principals Michael Hallmark and Susan Eastridge, who also worked on Navy Hill. Hallmark, of Richmond-based Future Cities, and Eastridge, of Northern Virginia-based Concord Eastridge, are also leading a redevelopment of Richmond’s Public Safety Building site at 500 N. 10th St., while Future Cities is planning a mixed-use rehab of an old power substation in the city.

‘Important milestone’

Hallmark on Wednesday called the GreenCity CDA “a really important milestone for the project.”

“It’s been super-helpful for us to hit these key dates, and we’re looking forward to working with the CDA board members,” he said.

Appointed to lead the CDA are county residents Ed Baine, president of Dominion Energy Virginia; Bruce Kay, vice president at Markel Corp.; Sal Mancuso, executive VP and CFO at Altria Group; Harold Parker Jr., president and CEO of Old Dominion Electrical Supply Co.; and Tom Tokarz, retired county attorney for Henrico. Their terms expire Dec. 31, 2026.

CDA members Harold Parker Jr., left, and Tom Tokarz were sworn in during Tuesday’s meeting. (Screenshot)

Hallmark said construction on the initial phase remains scheduled to start this year. He said the Best Products building is in design now and occupancy is expected by the end of 2025. He’s submitted the rehab for the Living Building Challenge, a recognition program under the Seattle-based International Living Future Institute.

He said work on the arena also is advancing, and he noted the site purchase is scheduled to close late next month. According to the purchase agreement amendment that was approved in November, the first installment of $500,000 is due Feb. 28,, while another $500,000 would be paid a year after that. The remaining balance of $5.22 million is to be paid the year after that.

The previous agreement had called for a payment of $5 million on April 12 and $1.2 million on Oct. 12 of next year, with a possible extension for an additional year. Asked why the agreement was amended, Hallmark said it was an option that was made available to the group and allows it to put assets toward other needs.

“It gives us opportunity to invest capital in other aspects of the project, rather than just sinking it into land on day one,” Hallmark said. “We wanted to put capital to work on other aspects of the project: paying consultants and fees and doing additional studies. The county was generous in not needing all of this money on day one.

“That’s really been the county’s attitude toward this project from the beginning: what can we do to help you advance the project in a way that you want to advance it,” he said. “We said if we could plow our resources into the design studies and other consultant things on day one, that would be super-helpful, so they agreed to do that.”

Architecture firm ZGF is leading the design for the Best Products building out of its D.C. office. Mechanical, electrical and plumbing engineering work is being handled by PAE, out of Portland, Oregon, and by CMTA’s Richmond office. D.C.-based Silman is the structural engineer.

Future Cities is the project planner. A contractor has not been announced.