An updated rendering of the Navy Hill development with a view of the planned CoStar office building and 17,500-seat arena (Image courtesy NH District Corp)
A Richmond City Council committee dealt two major blows to the $1.5 billion Navy Hill proposal on Monday, setting the stage for the downtown redevelopment deal’s likely demise.
Acting as the Organizational Development Standing Committee, five council members recommended yesterday that 10 ordinances key to the project be stricken from City Council’s Feb. 10 docket. This means that at next week’s meeting, the voting majority who opposes the project will be able to kill the Navy Hill deal before it can reach a final vote on Feb. 24 as originally anticipated.
They also recommended that Council approve a resolution petitioning Richmond Mayor Levar Stoney to withdraw the Navy Hill ordinances and launch a new request for downtown redevelopment proposals.
The council members are: 2nd District Councilwoman Kim Gray, 3rd District Councilman and Vice President Chris Hilbert, 4th District Councilwoman Kristen Larson, 5th District Councilwoman Stephanie Lynch and 8th District Councilwoman Reva Trammell.
The Navy Hill deal originally was set to be amended by council members next Monday and then continued toward a final vote on Feb. 24, but the proposal now appears unlikely to survive that long. Before the vote, Hilbert reiterated his position that Richmond’s neighboring counties should be involved in the project, and he said he isn’t swayed by promises of a 17,500-seat arena central to the deal.
“The coliseum is not a priority for me, nor is it for the residents of my district,” he continued. “During the last election, I indicated that I was not going to follow any shiny objects, and this project is the biggest, shiniest object that has been proposed in the City of Richmond. I won’t break faith with the voters of my district who elected me representative.”
In addition to an arena, the Navy Hill plan would add a 525-room hotel, 480 affordable housing units, more than 250,000 square feet of retail and restaurants, the renovation of the historic Blues Armory, and a new GRTC transit center to a 10-block downtown area bounded by North Fifth, East Leigh, North 10th and East Marshall streets.
While about $900 million in private funds would finance most of the Navy Hill project, more than $300 million in bonds would pay for the arena's construction, existing debt on the Richmond Coliseum and other arena costs. Those bonds would be repaid using new real estate tax revenues collected from a special tax increment financing (TIF) district that could cover 80 blocks, although the developers have said they are exploring other ways to reduce the size of it.
Council members who opposed the recommendation argued that the development proposal should be allowed to move forward to the Feb. 24 meeting to allow their constituents more opportunity to contribute their input. Ninth District Councilman Michael Jones and 6th District Councilwoman Ellen Robertson, two of the project’s supporters on Council, pointed to the creation of new affordable housing units and employment opportunities for Richmond residents as notable community benefits that the city would be missing out on by killing the deal.
Jones pressed his colleagues to develop solutions to those issues if the Navy Hill deal is shot down.
“We still have to move forward to find a way to empower those that have been historically disenfranchised,” he said. “I hope that I hear the same energy from everybody on Council and in the council chambers to find a real solution — and not just kick the can down the road, but find a real solution to get people jobs.”
The project’s opponents, meanwhile, say they aren’t against downtown redevelopment — just the dealings between project developer NH District Corp and the city administration that brought about the Navy Hill deal. The resolution backed by Gray, Hilbert, Larson, Lynch and Trammell calls for a new request for proposals (RFP) process that engages public feedback from the earliest stages of its development and appraises the value of all city-owned parcels in the development area, steps they say weren’t followed during the development of the deal at hand.
“I’m going to make a commitment to work with the administration, to work with stakeholders, to work with people to bring us back together to do something transparent,” Lynch said.
Jeff Kelley, spokesman for NH District Corp, said in a statement that the developer has worked to address concerns that have been raised about the project since its unveiling and hopes the proposal will get an airing on Feb. 24 as originally scheduled.
“Today, Richmond City Councilmembers voted to upend a two-year-long, public request-for-proposal (RFP) process without considering project amendments or a third-party analysis that they themselves requested and paid for," he wrote. "After hundreds of meetings, dozens of public hearings and recent announcements on job creation and community benefits, our hope was that instead of looking for ways to vote 'no' on the Navy hill project, these City Councilmembers would come to the table with solutions or ideas for ways to improve it. Instead, our proactive attempts to sit down with each of these five members have been met with silence."
An effort to shrink the TIF district — one of the proposal’s most controversial elements — ended last week when Del. Jeff Bourne (D-Richmond) asked state lawmakers to defer a bill that would have allowed the city to keep 2.025% of state sales and use tax revenues collected in the city to repay arena debts, potentially reducing the special tax district to 11 downtown blocks. After being mistakenly revived by a House committee, the bill was officially killed Monday.
Earlier in Monday's City Council committee meeting, C.H. Johnson, the consulting firm Council paid $215,000 to conduct a review of the Navy Hill development agreement, painted a mostly favorable picture of the deal in a presentation of its findings to the panel. The consultant's final report is due to Council on Feb. 10.
In particular, Charles Johnson, the firm’s president, highlighted the planned mixed-use development and convention center hotel as major strengths in the development.
“Conceptually, the project addresses many deficiencies in the marketplace and is based on good principles,” Johnson said, adding that the city would be at a disadvantage without a new arena. “The proposed project really does animate the area that’s characterized as being blighted in a way.”
The lack of a land appraisal in the development area, the size of the special tax district, and no specific plans for the planned GRTC transit center and the relocation of the city’s Department of Social Services were among weaknesses in the Navy Hill plan that were cited in the consultant’s report.
In a statement issued during the meeting, Stoney applauded C.H. Johnson’s review of the project, saying the report “asserts that the arena program and cost, as well as the financials associated with it, are reasonable and consistent with venues in comparable markets.”
“It’s time that council members come to the table and make this work,” he added. “As the mayor of this great city, I want to see our elected officials exhibit faith in our city’s future, not fear borne of our city’s past.”
Some questioned the C.H. Johnson’s findings, however. Lynch said she was skeptical of the number of events anticipated at the arena annually and questioned the affordability of apartments in the development, with the consultant estimating average rents at $1,695, while Hilbert said the report shows that the Navy Hill arena would operate at a loss for the city.
Proponents of the Navy Hill plan on Council, however, said they would have wanted to cast their final votes on the deal with the benefit of the consultant's final report, and hoped to be able to add amendments to the development deal at next week's meeting.
"I think, short of there being a vote to bring it back at the council meeting on the 10th, that opportunity may be lost," Council President Cynthia Newbille said at the conclusion of the nearly six-hour meeting. "Hopefully not.”
