Affiliates of the private group behind the $1.5 billion proposal to redevelop the area around the Richmond Coliseum have already spent millions planning for the project.
NH District Corp. — the nonprofit development group led by Dominion CEO Thomas F. Farrell II that is vying for the deal — has enlisted a lengthy roster of architecture, engineering and design firms, contractors, consultants and others over the past two years to assemble sweeping plans unveiled earlier this week that center on a new arena.
“There’s been an investment close to $20 million, so we seek your support,” said Susan Eastridge, CEO of Concord Eastridge, a Fairfax-based development company working on the project.
Fronting the money were private investors and Capital City Partners, a for-profit affiliate of NH District Corp. that would manage construction of the massive mixed-used development slated to rise around the new arena. The sum includes design, market studies, planning and feasibility analyses, and legal and financial work.
The disclosure came during a media briefing on the project that NH District Corp. held Tuesday, where representatives of Capital City Partners made their first public comments about the project.
Eastridge is one of the leaders of Capital City Partners. So is Michael Hallmark of Los Angeles-based Future Cities, a development company that focuses on mixed-use projects centering on sports and entertainment venues.
Hallmark said some of the firms on the project were hand-picked, but others came by way of a private competitive bidding process. He cited the proposed arena operator — SMG — as an example of the latter. The company also manages other large Richmond venues, including the Dominion Energy Center, Altria Theater and, up until it was shuttered at the end of last year, the Coliseum.
“ Rather than just take business as usual, we reached out to the best operators in the nation, and there was a tremendous deal of interest,” Hallmark said.
“One of the requirements we asked for was an actual investment in the building itself. That’s the deal we got, so our operator has a large investment in the project, which demonstrates how much they believe in the outcome of it.”
Hallmark said the project offered a chance to close what he called “a serious hole in the doughnut” of the city’s downtown landscape — the roughly 10-block area north of Broad Street bounded by Fifth, East Marshall, 10th and Leigh streets where the development would rise on what is now publicly owned land. Under the plans, NH District Corp. would pay the city $15.8 million for the properties, as well as a parking lot south of Broad Street that the group also wants to build on.
On the land would rise a 17,500-seat arena, the largest in the state; a high-rise hotel with at least 525 rooms; 2,500 apartments, with 480 reserved for people earning less than the region’s median income of about $83,000 for a family of four; 1 million square feet of commercial and office space; 260,000 square feet of retail and restaurant space; a renovation of the historic Blues Armory; a new transfer plaza for GRTC Transit System bus riders; and infrastructure improvements to make it easier for pedestrians and cyclists to navigate the area.
The majority of the project would be privately funded, with NH District Corp. and its investors spending $900 million on the initial phase of building that would coincide with the construction of the new arena.
Public money would pay for the new arena. Under the proposal, the money would come by way of a special tax zone called a tax-increment financing district.
All new real estate tax revenue from the zone, either from new construction or rising property assessments, would be used to make debt payments on a $350 million bond offering for the arena. The money would otherwise go into the city’s general fund, which pays for core services such as police and schools.
As proposed, the district would be bounded by First Street, 10th Street, Interstate 64/95 and Byrd Street, a swath of downtown that is roughly eight times larger than the 10-block area containing the proposed arena and mixed-use development.
Over 30 years, the city would owe about $570 million to investors who buy the bonds. Previously released figures from an earlier iteration of the plans pegged those costs at more than $600 million.
The city’s financial advisers, Davenport & Co., have said the project could net enough new tax revenue to pay back the money in as few as 21 years. That would bring the cost down to about $476 million.
The Stoney administration has proposed committing all new tax revenues from the mixed-income development, as well as parking revenues and money the arena generates in sponsorships, toward paying down the cost of the arena.
The mayor has said the project would net the city $1 billion in new tax revenue over the course of 30 years, citing figures from the city’s financial advisers. He has also touted thousands of jobs the project could create, according to figures from a study that NH District Corp. commissioned.
The Richmond City Council must sign off on the plans if they are to move forward. A final vote on the proposal isn’t expected until later this year, at the earliest.