The Richmond Flying Squirrels’ home ballpark, The Diamond, will be replaced as part of a new development deal. (Photo by Jay Paul)
In 2009, Lou DiBella, a blunt-talking boxing promoter from New York City, was a fish out of water. The Brooklyn native had built HBO into a boxing powerhouse in the 1990s, launched a successful entertainment company, DiBella Entertainment, and purchased a majority stake in the Connecticut Defenders, a minor league baseball team. The Defenders had been struggling financially, so DiBella was working with a group of real estate investors to relocate the team to Richmond as part of a $363 million development proposal in Shockoe Bottom.
In May of that year, the deal fell apart. Suddenly, DiBella was on his own. “I was scared s---less,” he told this reporter in 2009. He was was struggling to find investors in order to relocate to The Diamond on a promise from then-Mayor Dwight Jones that, eventually, a new stadium would be built.
DiBella, however, is in the International Boxing Hall of Fame for a reason. He’s a marketing whiz, a dealmaker. He found new investors and hired a savvy marketing team. The Defenders relocated and were renamed the Richmond Flying Squirrels. DiBella and his partners invested millions in the aging ballpark on the city’s North Side. Attendance soared.
For 12 years, the promise of a new ballpark didn’t materialize — until last month.
“I’ll be flying in tomorrow morning,” he says when reached by phone while sitting in his office on Sea Cliff Avenue in Long Island, New York, on a late afternoon in mid-September. He’s in a good mood, listening to a little heavy metal (Ghost, a Swedish band). “They are going to be announcing the selection of the developer tomorrow, the parameters we are working with. We are thrilled.”
Mayor Levar Stoney addresses the media in the parking lot of The Diamond Sept. 13. (Photo by Jay Paul)
The next day, on Sept. 13, DiBella joins a procession of city officials taking the podium in The Diamond’s parking lot to laud the selection of RVA Diamond Partners, led by Washington, D.C.-based Republic Properties, Chicago’s Loop Capital and Richmond’s Thalhimer Realty Partners.
On 67 acres off Arthur Ashe Boulevard, RVA Diamond Partners is planning a massive, $2.44 billion mixed-use development — 2,863 apartments, 157 condos, two hotels, retail shops and nearly 1 million square feet of office space — to accompany a new, 10,000-seat ballpark. There’s also an 11-acre park in the plans, plus a focus on affordable housing: The project calls for 20% of the apartment units to be leased to families earning between 30%-60% of the region’s average median income, with at least 100 units available to public housing residents.
Developers have agreed to put more than $6 million in reserve funds to help pay off the bonds for the ballpark and public infrastructure, plus $1 million to help buyers of affordable housing with closing costs. There’s a reverter clause — the city can retain ownership of the ballpark property if the public financing for the stadium doesn’t fly. RVA Diamond Partners has also committed to purchasing $20 million of the bonds issued in phase 1.
To finance the project, a quasi-governmental entity known as a Community Development Authority would issue bonds for a $100 million ballpark and $30 million in public infrastructure, among other expenses, but the CDA can only draw from revenues created within the district — real estate, meals and business license taxes, a 2% hotel admissions fee, and sales taxes (the city’s portion of the state levy plus an additional .25%). If the revenues fall short of the debt payments, property owners within the district would pay a special assessment to cover the difference, according to the terms of the deal.
It’s a significant shift from previous ballpark proposals, not to mention the failed Navy Hill project, which would have required pulling in real estate and sales taxes from surrounding properties.
“This is much better than what I saw on Navy Hill, and it’s better than what I saw on the Shockoe baseball [proposals],” says attorney Bill Pantele, a former City Councilmember who has long been skeptical of city-subsidized development deals.
Of course, more due diligence is needed. Using CDA bonds to finance the project is risky (bond buyers typically require a healthy base of preexisting tax revenue, which phase 1 won’t have initially).
It also must happen quickly. Following City Council’s approval of the initial terms on Sept. 26, the CDA will have to be put together in short order to begin construction on the new stadium by next spring. The timeline has been condensed to meet a deadline imposed by Major League Baseball requiring minor league affiliates to upgrade their facilities by the start of the 2025 baseball season.
The current proposal also suggests the city isn’t committing financial resources to the project, but it is forgoing significant tax revenue. The first phase includes an investment of $627.6 million, which is estimated to net $156.2 million in tax revenues for the city once the bonds are paid off. Take out the ballpark, and those tax revenues increase exponentially: The 67 acres, cobbled together from city- and state-owned property, sit alongside interstates 95 and 64, wedged between fast-growing Scott’s Addition and North Side. Without a CDA, which diverts nearly all tax revenues within the district to pay off the bonds, the project would produce hundreds of millions in tax revenues.
There’s almost no evidence that publicly financed stadiums and arenas produce positive economic returns, says sports economist David Swindell, director of the Center for Urban Innovation at Arizona State University. But, he says, Richmond’s proposal could be worse.
“There’s a fundamental question of, ‘Why is the public subsidizing a private development?’ ” he says. “But in the scheme of things, it doesn’t sound horrible. They are minimizing the city’s exposure while increasing the property values. It sounds pretty rational.”
Where it goes from here is anyone’s guess. DiBella, however, is optimistic.
“If you would have told me when we moved here that 13 years later, we would still be playing in this wondrous monstrosity, … I would have told you that you were nuts,” DiBella tells those gathered in The Diamond parking lot in September. He recounts how Stoney told him on “the night he was elected” to be patient, a new ballpark was coming. “You kept your word,” DiBella says, “and I am grateful.”
