Photo courtesy Kelly
Editor's note: This story has been updated since publication in the September issue.
Negotiations between the city and NH District Corp. on a downtown redevelopment proposal are back on track after stalling in mid-August, Mayor Levar Stoney's office announced Sept. 6.
The proposed $1.4 billion redevelopment project would replace the Richmond Coliseum with a $220 million arena and put $10 million toward renovations of the historic Blues Armory building. The project also includes private development of a 527-room downtown hotel, 2,800 apartments and condos — 10 percent of which will be designated as affordable housing — a new transfer plaza for the GRTC Transit System, and more than 170,000 square feet of street-level retail and restaurant space.
“We’ve talked to a lot of business owners in the area, and they’re all for it,” says Jeff Kelley, a spokesman for NH District Corp. The nonprofit is led by Dominion Energy CEO Thomas Farrell II and references Navy Hill, the former neighborhood that was leveled during interstate construction. “We’ve got an opportunity to put something there that will create jobs, housing, opportunity — all of that,” Kelley says. The development would create 12,000 construction jobs during the estimated two and a half years it would take to complete the project, and 9,000 permanent jobs when finished, he says.
The 46-year-old Coliseum seats about 13,000 and loses roughly $1 million annually, which falls on city taxpayers to cover. The replacement structure outlined in the city’s request for proposals seeks seating of up to 17,000, and developers would assume the existing $2.9 million in debt.
In July, a firm hired by the city to review the Coliseum replacement — Chicago-based Hunden Strategic Partners — announced Richmond was on its list of top markets “ready to host a Major League franchise.” Kelley says the arena is not intended to attract a pro sports team, but concerts and sporting events such as the preliminary rounds of NCAA tournaments.
Prior to the Stoney administration’s call for proposals in November, Farrell and Altria Group CEO Marty Barrington had been working on a similar plan. NH District Corp. submitted the only bid; Farrell and Barrington are part of the affiliated NH Foundation.
Stoney halted the city's initial plan to present the proposal to City Council in September, telling the Richmond Times-Dispatch on Aug. 16 that NH District Corp. had not met the city's requirements for affordable housing, a bus transfer station and minority business participation.
Since then, the mayor says, the parties have made "significant progress."
“Things are moving in the right direction,” Stoney says in a Sept. 6 news release. “While this is not a done deal, I’m optimistic our negotiations will continue to be productive."
If City Council approves the plan this fall, bond sales could begin in the spring of 2019, followed by the start of construction.
The Financing Plan
Stoney’s request for proposals to redevelop the area around the Richmond Coliseum mandated that the city not assume more debt. Instead, the cost will be covered through tax-increment financing — a structure that uses increased taxes from rising real estate assessments to pay for the development over an estimated 30-year period.
The plan submitted by NH District Corp. calls for including two new Dominion Energy skyscrapers roughly a mile away from the Coliseum in the financing arrangement. NH District spokesman Jeff Kelley says that including the Dominion towers gives bondholders more confidence that the project will generate enough money to pay them back.
“There’s always an argument to be made that the city has to sort of sweeten the pot for developers,” says Rich Meagher, an associate professor of political science at Randolph-Macon College who runs the website rvapol.com. But he’s skeptical about new revenue from the Dominion towers going to pay off bonds: “I think those are red flags that make it seem like it’s going to be a bad deal.”
