A rendering of the Diamond District redevelopment plan proposed by RVA Diamond Partners and approved by Richmond City Council (Image courtesy City of Richmond)
More than two decades of debate over whether, and where, to build a new minor league ballpark came to an end with barely a whimper. Gone were the “no stadium” signs, the anti-developer fury, the concerns about paving over African American history in Shockoe Bottom.
Just over a dozen citizens stepped to the podium in City Council chambers on Sept. 26 to voice support for the latest proposal — a $2.44 billion development on 67 acres off Arthur Ashe Boulevard anchored by a new baseball stadium — and only two people spoke against it.
With little discussion, City Council unanimously approved the basic tenets of the Diamond District redevelopment plan, granting RVA Diamond Partners — led by Richmond’s Thalhimer Realty Partners, D.C.-based Republic Properties and Loop Capital of Chicago — permission to begin working with city officials to craft a detailed path forward.
After 13 years of broken promises, the Richmond Flying Squirrels are closer than ever to getting that elusive new ballpark. But it’s hardly a done deal. Over the next few months, the city’s economic development department and RVA Diamond Partners will be working feverishly to put together the financing structure to begin construction as early as next spring.
The deal, however, was largely put together behind closed doors, and questions remain over how the public financing will work. The city plans to create a special tax district for the 67 acres and issue bonds to pay for the stadium and public infrastructure through a community development authority. The CDA would cover annual debt payments with tax revenues generated by the development — real estate, meals, local sales and business taxes — along with a 2% surcharge for hotel stays, an additional .25% sales tax surcharge and stadium lease payments paid by the Flying Squirrels and Virginia Commonwealth University.
Perhaps the biggest hurdle, however, is time. There isn’t much of it.
A late-summer Flying Squirrels game at The Diamond this year (Photo by Jay Paul)
Replacing the ‘Concrete Monstrosity’
While the ballpark is only a small part of the overall project, it plays an outsize role in how the development will unfold over the next 15 years. It will also limit the overall economic impact the Diamond District generates for the city in terms of tax revenue. The key reason for this is timing: The new stadium needs to be built by spring of 2025.
Major League Baseball in 2020 issued new stadium guidelines for minor league affiliates, giving teams until the spring of 2025 to comply. The Diamond, according to Lou DiBella, majority owner of the Flying Squirrels, was given a list of needed improvements. The league, he says, sent inspectors to each minor league stadium, and the Squirrels were notified that renovating the old stadium on Arthur Ashe Boulevard wasn’t tenable. For starters, the new regulations required significantly larger clubhouses for the teams, training and dining facilities, along with locker room and bathroom facilities for female umpires, coaches and staff.
“It breaks all the Americans with Disabilities Act [requirements],” DiBella says. “There’s one elevator that doesn’t work. There’s a staircase of 50 cement steps that are a hazard. There’s insufficient concessions. The thing is 40 years old — it’s obsolete.”
Operations staff from the city’s Department of Public Utilities also inspected The Diamond, says Maritza Mercado Pechin, deputy director for equitable development and project manager for the Diamond District development. Both Major League Baseball and city inspectors determined that The Diamond, which was built in 1985, was beyond repair.
“The city has already invested $2 million to improve this facility as best as they can for MLB standards. We put in new lights, and then there’s … other, kind of back-of-house things that are happening,” Pechin says. “But the challenge with the MLB requirements is that they’re based on square footage, and there’s literally not enough room to accommodate the needs … inside of the space. The second is that this is an old building that was built for $8 million in 1985, which was not a lot of money in 1985. And so, it was built very quickly, and it’s just no longer really serving very well as a stadium.”
DiBella puts it a bit more bluntly: “There is no renovation that could be done to this, ever,” he says. “Also, it’s a concrete monstrosity.”
Others aren’t so sure. While the proposals of years past primarily focused on building new, business consultant and former City Council candidate Harry Warner led a group of local architects and businessmen who proposed renovating the old ballpark in 2015. The group, called the Save the Diamond Committee, consulted with AECOM, the same infrastructure consulting firm the city hired to produce a market feasibility study and ballpark analysis for the Diamond District in December 2021.
While the 2021 report deemed The Diamond functionally “obsolete,” in 2015, AECOM informed the Save the Diamond Committee that the stadium could be renovated for roughly $42 million to $45 million, according to a 2015 presentation by Warner’s group. Plans called for lowering the playing field for new dugouts and lower-level seating, creating a grassy berm just beyond the outfield with a pedestrian promenade, relocating the luxury suites to open the concourse for concessions, along with “enlarging and upgrading clubhouse spaces” and adding lower-level training room areas and batting cages.
The ballpark renovations would have been part of a larger mixed-use development that included apartments, office buildings and retail shops, with a focus on pedestrian connectivity and physical fitness activities. Warner’s group met with city officials, but they were told the project was unfeasible.
“They said it wasn’t going to work,” Warner says in a recent interview. At the time, then-Mayor Dwight Jones was advocating for a new ballpark in Shockoe Bottom and had gotten behind a push to build an independent children’s hospital on the Boulevard. “We just didn’t have the capability to convince the city or a big-time developer to back it or take a look at it,” Warner says.
Pechin says those plans also came before MLB instituted its new stadium requirements, which ultimately made renovating The Diamond all but impossible.
Fast Track to 2025
To meet the 2025 deadline, the stadium must be built in the first phase of the project, which presents a significant challenge when it comes to establishing the CDA and issuing bonds for the project. Bond buyers are typically risk averse. The CDA will likely be required to show there is significant preexisting revenue to cover the bond debt, but those revenues will be largely nonexistent in the early going. The first phase will include the ballpark, a hotel, 1,134 apartment units, 92 condos and 58,000 square feet of retail on roughly 21 acres on the southern edge of the property next to the existing Diamond, but the developers will need to issue the bonds long before the first phase is anywhere near completion.
“What I’ve seen in my research is that bond investors want current or truly confirmable revenue streams. They rarely are willing to finance speculative investments,” says John Gerner, a Richmond-based consultant who served as vice chairman of the City Council-appointed Navy Hill Development Advisory Commission in 2019. “If I’m buying a CDA bond, where’s my assurance that I’m going to get paid?”
In the initial terms approved last week, city officials and RVA Diamond Partners seem to acknowledge the possibility that the bond financing might not fly. There’s a reverter clause, which would allow the city to take control of The Diamond property and other parcels if the bonds needed for the first phase are “not financeable.”
“Phase 1 needs to be robust enough and needs to be like, thrown down on the ground with a lot of strength to show … that you can generate enough revenue just within that first phase,” says Pechin, who visited the National Harbor entertainment district in Maryland with other Richmond officials to better understand how that $1.4 billion project just south of Washington, D.C., got off the ground. On the Potomac River in Prince George’s County, National Harbor required $65 million in bonds in 2004, which were issued by the county, along with state funds to help finance public infrastructure improvements.
“I went to National Harbor and met with the developers there and learned about how they did theirs. They had like 14 cranes in the air all at once in phase 1. It’s a risky time because you don’t have any money coming in yet,” Pechin adds. “Loop Capital, who’s one of the big investors in the [Diamond District], see the potential here. … They are very confident that they can generate enough bond revenue in order to support the first years.”
It remains to be seen, however. The overall development is expected to take 15 years to reach full buildout. At $2.44 billion, there appears to be plenty of tax-generating development to help cover the bond debt, but the city has yet to release details for how the first phase of the project will generate the necessary revenue to finance the new stadium.
City Councilwoman Katherine Jordan, who served on the Diamond District evaluation panel, says that a key to the making the financing work is RVA Diamond Partners’ commitment to purchase $20 million of the initial bonds that are issued. She says the evaluation panel pored over the financing and received assurances from its financial adviser, Davenport & Co., that the basic tenets of the deal were on solid footing.
“We brought in Davenport, as well as other financial experts, to just go through this exhaustively — this team’s finances and their approach, as well as the other finalists,” she says. “So we feel comfortable [that] the program, the timeline, the schedule that they have put forward is realistic.”
Unlike past ballpark proposals and the failed Navy Hill project, Gerner says, the Diamond District proposal appears to protect the city’s interests. If the revenues are insufficient to cover the bond payments, the deal requires a special assessment to be levied against the Diamond District’s property owners to cover the difference. Unlike past CDA bond issues, the Diamond District won’t require a “moral obligation” from the city, says Lincoln Saunders, Richmond’s chief administrative officer. A moral obligation isn’t a requirement from the government to cover any debt payment shortfalls, but failing to do so would likely impact the city’s bond ratings.
Still, Gerner says, the devil is in the details.
“We’re not dealing with people who have already done this many times before,” Gerner says of city officials. It seems to be a well-structured proposal, he says, albeit a vague one. “This resolution is really hard to say no to. In many ways, they’ve done a really good job. But they did it through abstraction rather than through detail.
“It’s just that I sadly wonder if they can really do it.”
