Mayor Levar Stoney announces plans to redevelop the Diamond District in September. (Photo by Jay Paul)
As the city hammers out details for the newly created Diamond District — a new baseball stadium and more than $2 billion worth of apartments, condos, office buildings and retail shops on Arthur Ashe Boulevard — one aspect of the proposal hasn’t gotten much attention: the loss of millions in real estate tax revenue.
The ballpark project will consume 67 acres just off interstates 95 and 64, one of the most valuable undeveloped sites in the city. Because the development team, RVA Diamond Partners, plans to issue tax-exempt bonds to pay for the ballpark and needed infrastructure, that means tax revenues generated within the 67 acres will be used to pay off the debt.
In other words, the city will likely miss out on a big portion of the economic benefits of the project — real estate tax revenues. The city claims the project will generate $156 million in taxes over the next 30 years, but if bonds weren’t required, the tax jolt to Richmond coffers would be far greater.
The city has a history of giving away real estate tax revenue. The long-running residential tax abatement program, which was mostly phased out in 2020, still represents roughly $15 million to $17 million a year in lost taxes, says Richie McKeithen, the city’s real estate assessor.
About 23% of the city’s real estate is off the tax rolls. Government buildings — city, federal and state — along with churches and public universities, such as Virginia Commonwealth University, comprise the bulk of the $9.4 billion in tax-exempt city property, representing more than $110 million in lost tax revenue in 2022.
By comparison, Chesterfield County’s tax-exempt real estate is valued at $3.4 billion, or $31.3 million in lost tax revenue. Exempt properties in Henrico County total $4.5 billion, representing $39 million in uncollected taxes.
With Richmond being landlocked and mostly developed (occupying just under 63 square miles, compared to Chesterfield’s 437 and Henrico’s 245), tax-exempt properties represent a disproportionate share of its taxable parcels. With the Diamond District, it’s about to add 67 more.
