Editor's note: This article has been updated since publication in our October issue.
Navy Hill plans include an arena to replace the Richmond Coliseum. (Image courtesy Kelley)
Stacks of documents outlining the mammoth $1.5 billion redevelopment proposal to build a new arena that would replace the circa-1971 Richmond Coliseum and reinvent a 10-block swath of downtown landed on the desks of City Council members in August.
The unveiling of what is described as the largest economic development project in Richmond’s history followed 17 months of negotiations between city officials and the nonprofit NH District Corp. (NHDC), headed by Dominion Energy CEO Thomas Farrell. NHDC was the only entity to respond to Mayor Levar Stoney’s 2017 request for proposals to redevelop the area around the Coliseum, an idea Farrell had floated earlier. NHDC has engaged arena and development firms Future Cities and Concord Eastridge to help morph its plans into a plausible reality. These firms together formed Capital City Partners to conceptualize, finance, design and manage the redevelopment project.
Called Navy Hill after the historic area where the redevelopment would be focused, the project includes a 17,500-seat arena that would be the largest in the state, a 525-room hotel and more than 2,500 housing units, plus 280 that would be reserved for those who earn up to 60% or 80% of the area median income. (Philanthropists would commit to raising $10 million for an additional 200 affordable housing units.) The development also comprises a million square feet of commercial space, more than 250,000 square feet of retail and restaurants, the renovation of the historic Blues Armory and a new GRTC transfer station for bus riders.
While an estimated $900 million in private funds would pay for the bulk of the project, public money to build the arena and repay $350 million in bonds issued by the Richmond Economic Development Authority would largely come from an 80-block special tax-incentive district (referred to as a "TIF" district for tax increment financing). Real estate and other taxes currently collected in that district would continue to go to the city's general fund, but increased real estate tax and parking revenue would be used to repay the bonds. Also going toward paying off the bonds would be sales, lodging, business and professional license taxes and meals taxes from new businesses that open as part of the development, except for 1.5% of the meals taxes from new restaurants, which would be directed toward schools.
Stoney has insisted that taxpayers will not be left holding the bag if the project comes short of its financial goals, with the burden falling on investors and bondholders. City financial advisor Davenport & Co. estimates the project will generate more than $1 billion in net general fund revenue over 30 years for the city after the bond debt is paid. Of that amount, Stoney has earmarked $500 million for schools; $340 million for public safety and other core services; $150 million for housing needs; and $10 million for art, history and culture.
“This project will redevelop significant portions of the city’s underutilized property downtown and turn valuable land that costs us money today into properties that generate revenue tomorrow,” Stoney said in an Aug. 1 announcement.
A nine-member commission to evaluate the project is headed by Pierce Homer (chairman), a former state transportation secretary and vice president at Moffatt & Nichol, and John Gerner (vice chairman), managing director of Leisure Business Advisors. After the appointment of the remaining seven members on Sept. 23, the commission has 90 days to report back. Council also plans to hold four public hearings on the proposal. Meeting videos and documents related to the project, including legislation the mayor presented to City Council, can be found at richmond.gov.com/mayor/downtown2.aspx. To see a list of public meetings and City Council work sessions, go to navyhillrva.com/calendar.
Some Question Funding Priorities
While the Navy Hill project is backed by many business, nonprofit and community leaders, among them three university presidents, a vocal opposition persists.
Writing in the Richmond Free Press in September, the Rev. Ben Campbell, pastor emeritus at Richmond Hill, and John Moeser, professor emeritus of urban studies and planning at Virginia Commonwealth University, say that downtown Richmond is not the right place for a large arena and associated parking.
“All over the nation, active pedestrian downtowns are reviving in high demand,” they write. Cities “are seeking to infill vacant blocks and rebuild their pedestrian grid and invest in public transportation and street life.”
Local attorney and activist Paul Goldman also believes that public funds are better used elsewhere. He has led a petition drive calling for an advisory voter referendum with a stipulation that 51% of revenue from a tax increment financing district be used to modernize city school facilities. Richmond’s general registrar said Goldman’s effort failed to reach the required number of signatures, 10,341. However, Goldman hopes a Richmond Circuit Court challenge of what he calls “the registrar’s faulty count of 9,941 valid petition signers” will prevail. He says he collected more than 15,000.
Justin Griffin, a Richmond attorney with an undergraduate degree in accounting and a minor in economics, is another opponent. His website, at nocoliseum.com (logo above), analyzes the financial aspect of the project, and Griffin has come to a singular conclusion: “The numbers are so inflated and so unbelievable, and that’s what they’re selling the plan on.”
