"It's not a simple distillation of yes or no on the totality," Navy Hill Development Advisory Commission Chairman Pierce Homer said of the report to City Council. "It's breaking the project down into some positive, some negative and a whole lot of neutral components."
The commission tasked by Richmond City Council with evaluating the $1.5 billion Navy Hill downtown redevelopment proposal has rendered its opinion.
The Navy Hill Development Advisory Commission unanimously approved a 13-page draft of its report to City Council at its final meeting on Sunday afternoon, one day before the document is due. Commission members will formally present the report to council at an organizational meeting on Jan. 6.
Rather than providing an overall recommendation for or against Navy Hill, the report focuses on key assumptions, projections, costs, benefits and impacts related to the Navy Hill project. In each section, it states whether a majority of members supported, rejected or said they had insufficient information to evaluate aspects of the proposal.
"In total, it results in a very interesting set of recommendations and findings that I think may be beneficial to the city," Navy Hill Commission Chairman Pierce Homer said at Sunday's meeting. "It's not a simple distillation of yes or no on the totality, it's breaking the project down into some positive, some negative and a whole lot of neutral components."
Notably, a majority of commission members found that Navy Hill poses a risk to the city's general fund and future dollars for Richmond Public Schools. Additionally, members said the cost of the Navy Hill development parcels and the impact of the project on school funding and the city's general fund were not reasonably estimated, according to the document.
Also in the report, commission members were split over whether the 80-block tax increment financing (TIF) district that would be used to pay for the 17,500-seat Navy Hill arena would be a "valid and reasonable" approach. New real estate tax revenues collected from the special tax district would be used to finance the arena.
Although $900 million in private funds would finance most of the Navy Hill project — including renovations to the historic Blues Armory, a downtown hotel, apartments and new mixed-use retail and residential buildings throughout a 10 block swath of downtown Richmond – more than $300 million in bonds would pay for the arena's construction, existing debt on the Richmond Coliseum and other arena costs.
Most commission members "did not find the proposed, publicly financed $300 million arena a sound and reasonable public investment in the redevelopment of downtown," the document says.
At past meetings, Commission Vice Chairman John Gerner has argued that if the Navy Hill plan is approved, new real estate revenues collected from the 80-block special tax district would be diverted from the Richmond’s general fund, which covers city services such as the school system. Third District Richmond School Board member Kenya Gibson also has spoken to the commission in opposition to the project, saying that the tax-incentive plan could negatively impact school funding for decades to come, if approved.
In addition, members were undecided on aspects of the project such as tax district base valuations, revenue projections for the redevelopment plan, development schedules and the impact of annual Economic Development Authority grants on the city budget.
In a statement issued after the meeting, Jeff Kelley, a spokesman for developer Navy Hill District Corp., called the draft report fragmented and inconclusive.
"The commission’s draft report cites ‘insufficient information’ in much of its analysis, yet NH District Corp. has more than made itself available to provide as much information as needed, only to be seemingly disregarded," he wrote in an email. "It is contradictory to cite insufficient information but yet find a concrete conclusion about ‘risks’ in the report."
At the commission's Dec. 14 meeting, Richmond Director of Finance John Wack told its members that the project would generate an estimated $500 million in additional funding for schools over the next three decades, and Davenport & Co., the city’s financial advisor, projects that Navy Hill will generate more than $1 billion in net general fund revenue over 30 years after the arena bond debt is paid.
Benefits of the Navy Hill plan noted by commission members included its mixed-use redevelopment model and its minority business procurement initiative, the report says.
"I don't think there's anybody on this commission who doesn't think that the redevelopment of the downtown is a good thing; we're all just trying to find a means to get there in a fair and equitable way," Homer said.
While City Council will receive a presentation on the Navy Hill Development Advisory Commission's report early next year, it is also awaiting a recommendation from Chicago-based firm C.H. Johnson Consulting. A decision on the $1.5 billion project is expected in February.
