Dominion Energy has submitted plans to the city to erect a downtown high-rise on a site tied to its CEO’s bid to redevelop the area around the Richmond Coliseum.
The designs, submitted to the city last month, call for a 17-story, 910,000-square-foot tower to rise in place of Dominion’s existing building, One James River Plaza, at 701 E. Cary St. The skyscraper, called 700 Canal Place, would connect by sky bridge to the company’s 20-story, 1-million-square-foot office building that is under construction at 111 S. Sixth St., called 600 Canal Place.
Plans for the proposed tower include an 800-stall, four-story parking deck and street-level retail space along Cary Street. Richmond BizSense first reported that Dominion had submitted the plans.
The towers are tethered to a $1 billion redevelopment proposal submitted to the city by a nonprofit group led by Dominion Energy CEO Thomas F. Farrell II.
NH District Corp.’s proposal calls for a new $220 million arena, 2,800 apartments and condominiums, a 527-room Hyatt-brand hotel, 176,000 square feet of street-level storefront space, the rehabilitation of the Blues Armory, the construction of a new GRTC transfer plaza for bus riders, a Virginia Commonwealth University medical office building and other infrastructure improvements.
To pay for a portion of the plans, the group is proposing the establishment of a tax increment financing district, a special zone where all new tax revenue generated by the development could be diverted to cover debt service payments on the bonds used to finance it.
Typically, one of the special tax zones — called a TIF — is drawn around a small area where a project is happening. NH District is pushing for the city to draw the boundaries around two Dominion properties — 600 Canal Place and the existing One James River Plaza — about a half-mile away from the 10-block area the city administration had marked for redevelopment. Those boundaries would include the new high-rise if the utility company decides to build it.
The TIF’s boundaries are among points Richmond Mayor Levar Stoney’s administration is negotiating with the entity. Stoney said last week that he had not determined whether to move forward with the proposal by submitting it to members of the Richmond City Council for consideration. The council must ultimately approve the plans.
According to financial projections NH District sent to the city in early May, drawing the boundaries around the towers could divert an estimated $4.2 million to $7.7 million in new property tax revenue Dominion would owe the city annually.
Over three decades, new revenue from the company’s properties could generate $165 million to help pay for the redevelopment. The money would otherwise flow to the city’s general fund to pay for core services such as public safety and education.
The financial projections show the towers aren’t necessary for the project to work. But including them in the tax zone would reduce the financial risk for bond investors and could allow the city to pay off its debt faster, according to NH District representatives.
In a Saturday interview, Farrell said NH District was “agnostic” about whether the towers are ultimately included in the special zone. Written responses the group’s lawyers sent the Stoney administration in May say otherwise.
The responses, obtained by the Richmond Times-Dispatch through a Freedom of Information Act request, characterize the inclusion of the Dominion Energy properties as a “beneficial business decision for the city.”
Dominion Energy supports including its properties in the TIF, according to a letter provided to The Times-Dispatch by Grant Neely, a Dominion communications employee working to advance the NH District proposal. The letter is signed by James R. Chapman, Dominion’s senior vice president for mergers and acquisitions.
“We understand and fully support that a tax increment district is being proposed to assist in the financing of a new arena north of Broad Street in downtown Richmond.”
Ryan Frazier, a Dominion spokesman, said the company would not decide until next year whether to renovate One James River Plaza or demolish it to clear the way for 700 Canal Place.