The game soon may be over for Richmond Mayor Dwight C. Jones’ proposal to build a baseball stadium in Shockoe Bottom and revitalize the historic area, just as the pieces of the development puzzle finally were becoming clearer.
Five members of the Richmond City Council said Friday that they intend to vote against the project Tuesday, giving opponents the majority necessary to end the increasingly bitter six-month debate over development of the Bottom.
At the same time, the Richmond Economic Development Authority stepped up to the plate Friday with details of its plans for conducting competitive negotiations to select contractors for the project and assembling the properties for a mixed-use development built around a new stadium for the Richmond Flying Squirrels.
The authority, created under state law more than 40 years ago to bring economic investment into the city, also answered accusations that it was being used to circumvent public procurement laws and award contracts without competition.
“Anybody who is saying … there is an agenda other than the best interests of the city, they’re just wrong,” said Richard S. Johnson, a member of the authority who is point man for executing the mayor’s plan.
“There is no other agenda than making the best deal we can and the most cost-effective (deal) we can,” Johnson said in an extensive phone interview.
If the mayor’s plan survives the council meeting Tuesday and ultimately is approved, the authority intends to follow the same game plan used to select a contractor to build a training camp for the Washington Redskins in Richmond last year.
In that case, the authority held competitive negotiations with six contractors, narrowing the field to three and then two before choosing Hourigan Construction as the contractor to build the training camp in about six months.
“To me, it’s a very effective way to get things done,” said Johnson, president and chief executive officer for The Wilton Cos., a development firm.
The authority was created in 1972 as an industrial development authority that is exempt from the Virginia Public Procurement Act, giving it broad powers to pursue development opportunities with greater flexibility and confidentiality than City Hall can do.
“That’s why the EDAs were put together — to do this kind of work,” said Gregory Wingfield, president of the Greater Richmond Partnership, a regional economic development agency.
But the authority has become a target in the bitter debate over the mayor’s proposal to build a stadium in Shockoe Bottom as part of a larger mixed-use development that also would create a heritage site to commemorate the antebellum slave trade that dominated that part of downtown Richmond.
“They are manipulating and misusing the economic development authority law,” said Paul Goldman, former adviser to Gov. L. Douglas Wilder, and a mayoral candidate in 2008.
Goldman argues that the entire Shockoe project should be subject to competitive procurement laws because the private developers are contracting with a public body that represents the city. “It’s not a private contract,” he said.
The General Assembly adopted the Industrial Development Authority and Revenue Bonds Act in 1966 to give local governments a tool to attract and finance economic development projects. The act frees localities from some of the legal constraints that can slow down or discourage deals.
“The General Assembly made a decision that when localities are trying to foster development through an Economic Development Authority, they don’t have to follow the rules relative to procurement that they do when they’re performing other governmental functions,” said William H. Hefty, a prominent local government attorney and expert in Virginia procurement law.
Industrial and economic development authorities are subdivisions of the state, but they operate on behalf of their localities to assemble industrial parks, issue revenue bonds for economically beneficial projects, or put together public-private development deals.
“It’s a pretty common vehicle when you look across the commonwealth of Virginia,” Wingfield said.
Charlie Diradour, a Richmond real estate developer who served on what then was called the city’s industrial development authority, said the body has evolved from one that primarily issued bonds and low-interest loans to what he calls “a master developer for the city.”
“They have the authority to do what they’re doing,” Diradour said, “but it’s being used differently than I ever envisioned.”
Goldman has joined with his law partner, Del. Joseph Morrissey, D-Henrico, and Del. G. Manoli Loupassi, R-Richmond, in challenging the city’s proposed use of the authority and calling for competitive procurement of a developer for the Bottom.
“They’re seeking no alternatives,” Goldman said of the mayor’s plan.
The city has followed the path of competitive bidding for developers before, said Johnson, who recalled the failed effort by Wilder when he was mayor to seek competitive offers by developers to build a new stadium on North Boulevard.
“What was the outcome of that?” he asked. “Not so successful.”
The same day the Wilder administration announced its plan, the Richmond Braves said they were leaving for a new stadium in the Atlanta suburbs. Ultimately, the city changed directions and chose Highwoods Properties to build a stadium in the Bottom as part of a mixed-use private development that also failed to happen.
This time, Johnson said, the Jones administration has worked directly with private developers to create a plan that would include residential development, a hotel, grocery store, and possibly offices on either side of East Broad Street next to the proposed new baseball stadium.
“It’s a very effective package … totally legal, totally appropriate,” Johnson said.
The proposal would require the authority to reach agreements with all of the developers on a complex series of land transactions — also exempt under the Virginia Public Procurement Act — as well as guarantees that the private development will generate enough tax revenue to pay the estimated $80 million costs of the stadium and necessary flood-control and stormwater improvements.
“We’re not receiving any city funds for what we’re doing,” said David J. White, who is proposing to build apartments on both sides of Broad with partner H. Louis Salomonsky. “We’re agreeing to develop private property and do private development and pay real estate taxes.”
Other private developers also are involved to build a Kroger grocery store, a Hilton Hotel, and possibly offices on the north side of Broad, but scrutiny has focused on White and Salomonsky, who own SWA Architects among other businesses based in the Bottom.
Salomonsky is a multimillionaire architect and real estate developer who served two years in federal prison for conspiring to bribe former City Councilwoman Gwen C. Hedgepeth for her vote in electing a new mayor in 2002 under Richmond’s previous city manager form of government. Then-Gov. Bob McDonnell restored Salomonsky’s voting rights in 2010.
“I don’t know what we have to do with any of it,” White said Thursday of the debate over competitive procurement.
The proposed agreements do not award contracts for publicly financed portions of the Shockoe project, but the EDA has negotiated memorandums of understanding with the private developers that specify a 40 percent target for minority businesses to participate in the construction of the project.
The documents say SWA “may be employed” to provide architectural and engineering services for the private development, so the target of 20 percent minority business participation for those services would not include the work that SWA performs itself.
Tammy D. Hawley, press secretary for Jones, said last week that “SWA agreeing to be inclusive is a good thing.”
The authority plans to use competitive processes to award contracts for the public portions of the project — the stadium and extensive public works improvements necessary to allow construction in the Shockoe Creek floodplain.
Johnson said the public works contracts could be awarded through the normal city procurement process or included in a single contract with the stadium through competitive negotiations through the authority.
The authority has no plans to be involved in procurement for the slave heritage site that Jones proposes to create to memorialize the suffering of African slaves in Lumpkin’s Jail and other sites throughout the Bottom before the Civil War.
The slave heritage project — an interpretative pavilion at Lumpkin’s, enhancements to the existing slave trail, and a slavery museum — would be funded partly through up to $11 million in state funds, which would require a competitive procurement process under state law.
Loupassi wants the state requirement to apply to the entire economic development project, but House Appropriations Committee Chairman S. Chris Jones, R-Suffolk, said last week that the state will require competitive procurement only on the slave heritage site it would help to fund.
Wilder is seeking at least a portion of those state funds to create the U.S. National Slavery Museum at the site of the former First African Baptist Church in downtown Richmond. Goldman and Morrissey represent Wilder’s organization in resolving a tax dispute with Fredericksburg over property there that had been planned for the national slavery museum but will hold a baseball stadium instead.
The land transactions that underlie the mayor’s Shockoe proposal generally have not been public, although a series of letters of intent released early this month provided an incomplete outline of the deals.
Johnson was more specific on Friday about how the land has been assembled for different parts of the project and some of the tax and legal considerations involved.
For example, North of Broad, the private entity that would develop mixed uses north of Broad Street, is buying Loving’s Produce Co. instead of the land the company owns because of the tax exposure that would result for the seller from a land sale.
The land includes up to 1.5 acres that the city needs for the stadium, so the EDA is leasing that property from the developer. The rent will help the private developer repay a loan from the city to buy the Loving’s business.
Weiman’s Bakery and North 18, limited liability companies controlled by White and Salomonsky, also own parcels that the EDA needs for the stadium. They would swap the parcels for city-owned land where the developers plan apartments next to the ballpark.
The footprint of the stadium shifted recently because the EDA learned that the Federal Transportation Authority would not allow redevelopment of a city-owned surface parking lot near Broad Street that was paid for with federal transportation funds.
As a result, the EDA is trying to acquire the headquarters of the Democratic Party of Virginia — which the mayor leads as chairman — and a parking lot owned by The Rebkee Co., a Midlothian-based developer that also has expressed interest in building a stadium on North Boulevard instead of in the Bottom.
None of the elaborate plans and agreements will matter if the council kills the deal. If that happens, Johnson predicts the city-owned 60 acres along the Boulevard still will be developed, but the property in Shockoe Bottom will languish.
“We’ve got an opportunity to make both locations work,” he said.