A Richmond City Council committee on Monday weighed the Navy Hill Development Advisory Commission's final report on the $1.5 billion arena and downtown development proposal. (Image courtesy NH District Corp.)
The commission tasked with evaluating the $1.5 billion Navy Hill proposal presented its final report on the project to a City Council committee Monday. The presentation came as the city leaders enter the final stretch of their review of the arena and downtown redevelopment plan. A series of public hearings on the project will take place starting Wednesday, Jan. 8, at 6 p.m. at Binford Middle School.
The Organizational Development Standing Committee, which will review the proposal before it goes to a final City Council vote, deferred action on the project. The committee now will take up 10 ordinances key to making Navy Hill a reality at its Feb. 3 meeting.
Council President Cynthia Newbille says she anticipates a verdict on the $1.5 billion arena and downtown development proposal by the end of next month.
Members of the Navy Hill Development Advisory Commission walked council through their 70-page report, which distills the members' opinions on aspects of the project such as the planned 17,500-seat arena, the 80-block tax increment financing (TIF) district plan that will be used to pay for the arena’s construction and the project’s potential impact on future city funds.
While most commission 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.” New real estate tax revenues collected from the special tax district would be used to finance the arena.
"The majority of commissioners found that, no, it is not a reasonable and sound public investment for the redevelopment of downtown," Commission Chairman Pierce Homer told City Council. "The commissioners who held this view generally found the arena to be highly risky, and that alternative approaches to downtown development were possible."
Homer noted that the two commission members who did not hold that view felt the presence of Spectra, a Philadelphia-based company that was announced as the planned operator of the arena, is a measurement of its likely success and that any risks associated with the arena could be mitigated by the success of surrounding residential or commercial development. Spectra representatives also have said the company would invest $8 million into the venue's pre-construction costs if the Navy Hill plan is approved.
Commission members also found that the project poses a risk to the city's general fund and future dollars for Richmond Public Schools, and that 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.
City administrators have said they expect the project to 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 a total of more than $1 billion in net general fund revenue over 30 years after the arena bond debt is paid.
Reviewing the commission’s findings, City Council members questioned whether doing nothing on the 10-block swath of downtown planned for redevelopment would carry an equal risk to the future city funds.
"On the South Side, we are in such a position that the cost of doing nothing impacts us greater than the district you all live in, because what challenges us, when we hear people saying we should wait, there are people on my side of the city that can’t afford to wait," 9th District Councilman Michael Jones said.
"No one on the commission is recommending to do nothing," Commission Vice Chairman John Gerner said in response. "I think that everyone on the commission feels that if this project in particular did not move forward, that of course, the city should continue to maximize revenues with the surplus property that it has, but that there would be other ways of doing it.”
With the Navy Hill Development Advisory Commission’s recommendation in hand, City Council will now look to CH Johnson Consulting, a firm it hired to conduct a second review of the redevelopment proposal.
Starting tonight, City Council also will hold a slate of public hearings over the next two weeks to gather community input on the proposal. All hearings are scheduled to begin at 6 p.m:
- Wednesday, Jan. 8: Binford Middle School auditorium (1701 Floyd Ave.)
- Thursday, Jan. 9: Pine Camp Cultural Arts and Community Center theater (4901 Old Brook Road)
- Tuesday, Jan. 14: Richmond Government Southside Community Services Center, conference rooms A, B and C (4100 Hull Street Road)
- Wednesday, Jan. 15: Martin Luther King, Jr. Middle School auditorium (1000 Mosby St.)
- Thursday, Jan. 16: City Council Chamber, second floor of City Hall (900 East Broad St.)
