The city is planning to tear down the Richmond Coliseum and replace it with a 500-room hotel. (Photo via Adobe Stock)
Six years after the $1.5 billion Navy Hill project collapsed, city officials are preparing for round two: demolition of the Richmond Coliseum to make way for a government-subsidized, 500-room hotel to bolster the beleaguered convention center next door.
As part of the City Center Innovation District outlined in the Richmond 300 master plan, the Coliseum site has become a key cog in the redevelopment of downtown. It sits on roughly 9.4 acres, along with the former Festival Park and the currently vacant Blues Armory, between Leigh, Marshall, Fifth and Seventh streets.
In recent years, the key holdup has been finding the money to tear down the old arena, which first opened in 1971. Former Mayor Levar Stoney requested $3 million for the work in 2024, but City Council declined the funding. Last year, Mayor Danny Avula estimated the cost of demolition at somewhere between $12 million and $15 million, but other priorities took precedence.
Then, the General Assembly unexpectedly allocated $15 million to cover the demolition in this year’s budget. Seven years after the Coliseum closed for good, City Center is back on.
“I think what we’re doing is all kind of coming together,” said Odie Donald II, Richmond’s chief administrative officer, shortly after the Greater Richmond Convention Center Authority board meeting in mid-July. “We’re catching new funds from the state, which are immensely helpful. Now we’re just making sure that we continue the project and the process without any interruption.”
Indeed, the city plans to solicit bids for the Coliseum teardown by the end of this year or early next, says Tamara Jenkins, deputy director of public affairs, with plans for redeveloping the site, including the new hotel, to be determined “pending demo.”
Four years after the city put the project out for public bidding, Avula says his administration prefers to work with the remaining bidder on the project, Maryland-based Capstone Development. The hope is that the hotel and a mix of residential, office and retail will “catalyze” City Center, according to the city’s public solicitation.
But the primary objective is to build a hotel, which would likely cost north of $200 million, to prop up the struggling convention center. And taxpayers will be asked to foot at least part of the bill, if not all of it. Last year, Richmond BizSense reported that the Avula administration was following Stoney’s plan to create a special tax district, similar to the Navy Hill project. The new district would siphon tax revenues generated within the 9.4 acres, and several surrounding blocks, to finance construction and infrastructure work.
The project could also tap into regional hotel tax revenues collected by the Greater Richmond Convention Center Authority to pay off the last convention center expansion back in 2003. But those details have yet to be ironed out.
“It’s typically a public-private partnership because the numbers don’t work out without it,” explains Katherine O’Donnell, president and CEO of Richmond Region Tourism, which handles marketing and recruitment of conventions, trade shows and sporting events. “I don’t think there’s ever a situation where there’s a market-driven, no [public] investment headquarter hotel, or very rarely anyway.”
The problem? There’s been no public debate on the merits of spending millions to build a hotel for a convention center that has underperformed literally since the day it opened.
O’Donnell says the lack of a large hotel next to the 700,000-square-foot convention center downtown — it spans six city blocks — has led to millions in “lost business.” Not being able to block off 500 or more rooms for a prospective convention, she says, is often a dealbreaker that leads event planners to look elsewhere.
According to RRT, the lack of hotel room inventory adjacent to the convention center has led to the loss of 250 events, representing 438,435 hotel room nights and $350 million in lost economic impact, from 2019 to 2025. The numbers include only the conventions, trade shows and other events that draw out-of-town visitors, not the many local meetings and events that don’t generate hotel stays.
In fact, the lost business is actually greater than the business it didn’t lose, according to RRT: From 2019 to 2025, there were 190 events at the convention center that generated 336,328 hotel room nights and $272 million in economic impact. At the July GRCCA meeting, convention officials said the facility has a utilization rate of less than 50%.
With a new, 500-room hotel next door, O’Donnell says she and RRT’s four-person sales team could compete for larger and more impactful conventions and trade shows.
The Greater Richmond Convention Center, which spans six city blocks, had an occupancy rate of 47.5% in fiscal year 2026. (Photo by Jay Paul)
“My team is like breathlessly awaiting the day when they can be let loose to do that,” O’Donnell says. “Because we’ve all been dreaming about having this hotel for so long that, yeah, the first thing that we would do is reach out to these organizers and say, ‘Good news! We have that one thing you wanted. Come and look at us again.’”
But Richmond shouldn’t expect a deluge of new business, says Heywood Sanders, professor emeritus of public administration at the University of Texas at San Antonio. There are more than 400 convention centers in the U.S., and many have expanded and added hotels in the last few years; building a publicly financed hotel really wouldn’t separate Richmond from its primary competitors.
“To the best of my knowledge, no one has ever done a study that has documented, in the wake of building such a hotel, that a center has gotten a significant portion of that lost business,” says Sanders, author of “Convention Center Follies: Politics, Power, and Public Investment in American Cities.”
Publicly subsidized convention hotels can also hurt privately owned hotels nearby. In a 2015 study of 21 publicly financed hotels that appeared in Cornell Hospitality Quarterly, researchers found that 15 hurt business at other hotels.
Meanwhile, the Greater Richmond Convention Center has a long track record of underperformance. When the regional authority that operates it floated bonds in 2000 to pay for a new, $170 million convention center, consultants predicted the new facility would put hundreds of thousands of “heads in beds.”
In 1995, an economic analysis by KPMG Peat Marwick projected that a new convention center would generate so many attendees that it would lead to 416,000 room nights annually within three years of opening.
But other cities were betting the same, including Virginia Beach, Norfolk and Hampton, which all built or expanded their convention centers within a few years of Richmond’s.
According to analysis of the Navy Hill project by Hunden Strategic Partners, the convention center averaged just 66,527 room nights from 2014 to 2018. Since then, the numbers have fallen even further. From 2019 to 2025, the convention center averaged a little more than 48,000 room nights a year; excluding 2020, when conventions and trade shows nearly ground to a halt, the average rises to only 52,800 room nights a year.
In other words, building a publicly financed hotel carries a fair amount of risk.
“Major centers around the country have seen their business decline in the wake of the COVID pandemic. And that appears to result from the increased competition in the convention business,” says Sanders, who’s currently working on a sequel to “Convention Center Follies.” “Richmond is competing against a long list of other places that are doing the same thing.”
