Richmond Mayor Levar Stoney’s administration on Monday officially unveiled the $1.5 billion proposal to redevelop the area around the Richmond Coliseum, setting in motion a City Council review of the massive plans that could reshape downtown.
Hundreds of pages of plans were introduced at a special meeting of the council laying out the terms of the economic development deal Stoney’s administration spent 17 months reviewing and negotiating with NH District Corp., the private group led by Dominion Energy CEO Thomas F. Farrell II.
Council members did not delve into the deal Monday, but did say they were eager to begin reviewing the proposal. Questions about the Navy Hill project, and its complex financial setup blending public and private financing, have swirled for months.
“How much is the cost for what the benefit is? Are the numbers that we’re being given in the projections realistic numbers?” said Kimberly Gray, the 2nd District councilwoman. “Those are things that are, obviously, going to take a lot of expert vetting, so we’ll wait and see.”
Said 1st District Councilman Andreas Addison: “There’s a lot we don’t know.”
The plans call for 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; renovation of the historic Blues Armory; a new transfer plaza for GRTC bus riders; and infrastructure improvements to make it easier for pedestrians and cyclists to navigate the area.
Under the proposal, NH District Corp. would invest $900 million to build a privately owned, mixed-use development on 11 properties that are currently publicly owned. The Stoney administration has proposed selling those properties to the entity for $15.8 million, according to the plans released Monday.
Ownership of the new arena, as well as the Blues Armory, would be transferred to the Richmond Economic Development Authority, which facilitates business deals involving the city. The EDA would then lease the two facilities to NH District, which would be responsible for operating and maintaining them.
In a change from what was originally proposed, NH District would pay $10 million to convert the armory into a food hall and conference space for the proposed high-rise hotel.
Public dollars would build a new arena and improve infrastructure in the roughly 10-block area bounded by Leigh, Fifth, Marshall and 10th streets where the development is slated to rise.
The EDA would issue $350 million in non-recourse revenue bonds to cover those costs. Stoney and the city’s financial advisers, Davenport & Co., say the financing will not negatively affect Richmond’s bond rating or debt capacity, but rather could improve the city’s capacity to borrow money for other capital projects in the long run.
Likewise, Stoney has said the deal poses “no risk” to city taxpayers; he did not attend Monday’s meeting of the council after calling a news conference last week to announce he was moving forward with the deal.
Debt service on the bonds would be $476 million if the city pays the money back in 21 years, according to the Davenport & Co. analysis. It would cost more if the city takes the full 30 years to pay off the bonds.
Previously released figures showed it could cost in excess of $600 million, including interest, if it takes 30 years.
The Stoney administration has proposed repaying the sum using money from 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 assessments, would be used to make debt payments on the bonds for the arena. The money would otherwise go into the city’s general fund, which pays for core services such as police and public schools.
As proposed, the district would be bounded by First Street, 10th Street, Interstate 64/95 and Byrd Street. It would span a swath of downtown that is roughly eight times larger than the 10-block area where the new arena and mixed-use development is proposed.
Additionally, all new sales, meals, lodging, admissions and license tax revenue from the privately owned development will be used to pay down the publicly funded portion of the project over the course of 30 years.
There are other costs the city would incur if it moves forward with the plans.
The biggest among those is $5.5 million for a new downtown fire station, according to a report provided to the council. The figure is among $7.1 million in one-time expenses the deal would result in. The city would also incur annual operating expenses across several departments totaling $2.9 million, the report states.
During the 30-year repayment period, the city’s financial advisers estimate the project could net $1 billion in surplus tax revenue if the project meets its financial projections. Even if it doesn’t, the city still stands to net hundreds of millions of dollars in new revenue, the analysis states.
A resolution Stoney submitted to the council Monday outlines a previous promise he made to devote half of any surplus to city schools, with the rest going to improve city services, incentivize the development of affordable housing, and install new public art.
Stoney has touted other potential economic benefits, including 12,000 new jobs during the five-year construction period and 9,300 permanent jobs once the project is finished. His administration also stipulated that $300 million worth of contracts tied to the project be reserved for minority-owned businesses.
Council President Cynthia Newbille of the 7th District said the council would seek its own consultant to review the full plan.
That review will supplement the work of a council-appointed citizen advisory commission, which will have 90 days to issue a report to the council on its findings once the council has appointed a majority of its members.
The council named the commission’s leadership — Pierce Homer and John Gerner — last month.
The pair must recommend the remaining seven commission members to the council, which can accept all or some of the recommendations.
Those review processes, combined with the sheer scope of the proposal, will likely defer a final vote on the plans until the end of the year, at the earliest.
The Richmond Planning Commission will consider ordinances pertaining to the plan at its meeting on Sept. 3.
The council’s organizational development committee is scheduled to weigh the deal when it meets Nov. 4.