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CoStar will seek to move into a 400,000-square-foot office building next to the planned Navy Hill arena if the proposal is approved by City Council, Mayor Levar Stoney announced at a news conference Monday morning. (Image courtesy NH District Corp.)
The Navy Hill development proposal could see big changes in apparent response to concerns raised about the project.
At a news conference Monday, Richmond Mayor Levar Stoney outlined possible amendments to the controversial $1.5 billion project, including changes to the size of the tax increment financing (TIF) district that would be used to repay debt on the 17,500-seat arena that's central to the plan, as well as expansion of affordable housing options in the development and a possible shift in the location of the planned GRTC transit hub.
Also on Monday, Stoney announced that CoStar, a Washington, D.C.-based commercial real estate analytics firm, would seek to expand its Richmond offices into Navy Hill if the project is approved by City Council.
The company, whose operations and research division is headquartered in the WestRock building on South Fifth Street, would look to add 2,000 jobs in downtown Richmond by moving into more than 400,000 square feet of office space adjacent to the planned arena by 2023, CEO Andrew Florance said, with the potential to add more office space later.
Since opting to locate its operations and research hub in Richmond in 2016, CoStar has added nearly 1,000 jobs to the city, Florance said, adding that the company has outgrown its WestRock building offices.
“It's exactly the kind of thing that Richmond's been looking for. Our vision has been to work with the mayor and the City Council to carry out the mayor's vision of revitalizing a historic downtown core. This project makes it possible,” Tom Farrell, Dominion CEO and chairman of the NH Foundation Board of Directors, said at the event. “This announcement today is only the beginning."
While fielding reporters' questions, Florance added that if the Navy Hill proposal is rejected by City Council, CoStar would still look “to try and find a solution” for expanding its presence in Richmond.
Possible amendments to the Navy Hill development agreement also were outlined. Last week, Del. Jeff Bourne (D-Richmond) filed legislation that would allow Richmond to keep a portion of state sales tax revenues collected in the city to repay debts on the arena, opening the door to a reduction in the proposed 80-block special tax district. New real estate taxes and parking revenues collected from the special tax district would be used to finance the arena.
"I want the citizens of Richmond to know that we’ve been hard at work day in and day out [during] the past weeks and months to find solutions to the concerns that you’ve raised," Stoney said. “One significant area of concern that has been cited by the commission and the community has been the size of the increment financing area."
Stoney said current projections show that the size of the proposed tax district could be cut by more than half if Bourne’s legislation passes, and he noted that the state tax revenue diversion plan is similar to legislation passed in the General Assembly last year to fund a redevelopment project in Virginia Beach.
Allan-Charles Chipman, a local organizer and transformation strategist with Initiatives of Change, said in an interview after the announcement that he continues to question the need for a new arena in the development plan and losses to the city’s future general fund that could result from the bond repayment plan. Chipman has been a frequent presence at work sessions and commission meetings focused on the Navy Hill development.
“It's more of the same problems that we've raised again and again — if you're not adjusting the base for inflation, how much of this development that is attracted to this will be lost in the general fund? And it's still not a strong case for why the arena is needed, as the commission said.”
In its report to City Council, the Navy Hill Development Advisory Commission suggested that while its members broadly supported the bond financing model, a majority also said that the proposed publicly funded $300 million arena would not be “a sound and reasonable investment in the redevelopment of downtown.”
Navy Hill supporters have described the arena as a catalyst for economic development downtown and an asset for the community, similar to a museum or library.
Also mentioned at the news conference were ongoing discussions between NH District Corp. and GRTC leaders to work out the best location for the GRTC transit hub planned as part of the development, with a Broad Street location being considered as a candidate, along with the previously mentioned Ninth Street site.
Stoney also said NH District Corp. “has identified two opportunities” within the 10-block Navy Hill development area to build housing units affordable to those within 40% to 60% of the Richmond metro area median household income, which was estimated at $86,000 for a family of four by the U.S. Department of Housing and Urban Development in 2019.
The expanded affordable housing units would be in addition to the already planned 480 units in Navy Hill designated for households making 60% to 80% of the median household income. For those units, rent for a studio apartment in the development designated as affordable would range from $1,001 to $1,335, while rents for one- and two-bedroom apartments would go up to $1,431 and $1,717, respectively.
"We are working to finalize these amendments and look forward to providing further updates to City Council as soon as possible,” Stoney said. “This is the kind of give-and-take that I was talking about in October. This is what it means to do the hard work of ensuring that the community's voices are heard.”
Later Monday at City Council's informal meeting, members outlined concerns and suggestions about the project after a vote to discuss possible amendments to the development agreement in closed session failed 5-4, with Council Vice President and 3rd District member Chris Hilbert casting the deciding vote.
Second District Councilwoman Kim Gray and 4th District member Kristen Larson said they weren't made aware of Bourne's legislation, and Gray questioned how Council can negotiate the terms of the Navy Hill development agreement if major elements such as the size of the special tax district are still in flux.
Council President and 7th District member Cynthia Newbille, meanwhile, ran through a list of suggestions that she'll make to the developer in response to issues raised by speakers at past public forums on the topic. They include requests 1) that arena operator Spectra commit to hiring Richmond residents and provide a living wage and benefits for all employees, 2) that the developer commit to working with GRTC to finalize the location and construction of a transit center, and 3) that NH District Corp. and city administrators explore altering the development agreement to allow the city to start seeing financial returns on the project within its first five years.
