The $1.5 billion Navy Hill deal is dead.

A majority of the Richmond City Council voted Monday night to strike the downtown redevelopment proposal from its docket, citing a lack of transparency, financial risk to the city and other issues. The decision torpedoed Mayor Levar Stoney’s signature project and dashed the hopes of the development group led by Dominion Energy CEO Thomas F. Farrell II.

“It’s been said several times that our job is to negotiate this deal,” said Kristen Larson, the 4th District councilwoman. “I feel like our number one job is to represent the people, and I feel like that’s what I’m doing through my actions tonight.”

The council vote came after more than two hours of public comment from supporters and opponents of the project that centered around replacing the Richmond Coliseum. Some who spoke showed up three hours before the meeting to address the council.

Voting to spike the project were Andreas Addison of the 1st District, Kimberly Gray of the 2nd District, Council Vice President Chris Hilbert of the 3rd District, Larson, Stephanie Lynch of the 5th District, Ellen Robertson of the 6th District and Reva Trammell of the 8th District.

Opposing the decision to spike it was Michael Jones of the 9th District. Council President Cynthia Newbille of the 7th District abstained.

Addison, Robertson, Newbille and Jones lobbied their colleagues to continue the project to the council’s next meeting, when a final vote initially had been scheduled.

“Our city and our citizens deserve our due diligence on any project before us to fully vet it,” Newbille said. “Not to try is not acceptable.”

Stoney, who was not at Monday’s meeting, said in a statement late Monday:

"It saddens me that Richmonders won’t benefit from the housing, jobs and economic empowerment this project would bring – and I’m disappointed that council did not follow through on the process they laid out to review and evaluate this transformative project for our city – but I’m resolved to wake up tomorrow and keep working to move our city forward."

Farrell’s group, NH District Corp., said it was disappointed by the decision.

“We were actively working on amendments to incorporate the suggestions we heard, but unfortunately, those who opposed the project voted to end it before learning more — which is regrettable,” NH District Corp. said in a statement issued shortly after the vote.

NH District Corp. rallied residents and business owners to attend the meeting using a barrage of print, television and social media advertisements. The campaign amounted to a last-ditch effort to stave off the plan’s all-but-guaranteed defeat after a majority of City Council members made clear their opposition.

Supporters said the deal was the best chance to spur growth downtown, create jobs for residents who need them and meet a growing need for new housing stock. If the council rejected the plan, they said, it would send a negative message to prospective investors in the city.

“This is the transformational project that Richmond needs,” said Rodney Poole, a 3rd District resident who is also chairman of the city’s Planning Commission.

Opponents said they believed the project would put funding for schools at risk and contribute to rising housing costs in the city and displacement. Many said they distrusted the project’s backers — namely Farrell — to deliver on the developers’ promises.

“This project puts the desires of private developers over the needs of Richmond’s citizens,” Jessica Simms said Monday, asking the council to strike down the deal.

The position of the majority of City Council members has been clear for the past two weeks. A bloc of five members requested that Stoney scrap the existing proposal and start over. A resolution supporting that request prescribes an approach for a new redevelopment process. In a joint statement issued before Monday’s meeting, the bloc’s members said they were committed to working with the administration to conduct that process.

Their resolution asks the Stoney administration to complete a small area plan with “robust” public input, an appraisal of the city-owned land in the vicinity, and an assessment of the infrastructure. It requests that after taking those steps, Stoney issue a new solicitation for redevelopment of the area. Stoney called the request “selfish” and “laughable” during a news conference Jan. 27.

“We’ve laid out a pathway forward,” Lynch said of the resolution.

Stoney put out the original call for proposals in November 2017. His administration received one response when bidding closed in February 2018. It came from Farrell’s group, which had publicly indicated its interest in redeveloping the swath of publicly owned land months in advance of Stoney’s solicitation.

The Stoney administration negotiated with NH District Corp. over a period of 18 months, during which it fought the release of the plan’s documents in court. Stoney finally unveiled the proposal last August, setting in motion six months of public scrutiny and review.

At the outset, some on the council wanted to hold a citywide referendum on the project. A majority of the council opposed taking that course. The Stoney administration opposed it, too.

Despite protests from the Stoney administration and the developers, the council seated a citizen panel to review the project. That panel issued a report at the end of last year stating it did not view a publicly financed arena as a “sound and reasonable public investment in the redevelopment of downtown.” Its final report also said the project posed a risk for city schools.

Earlier this month, a consultant the council hired said it believed the project would insulate the city from longer risk and drive growth downtown. However, it noted several weaknesses in the plan, including a lack of capacity for the city to oversee the massive deal.

At issue since the early stages of the project was the creation of a special tax zone to help pay for the new arena. That zone, called a tax increment financing district, would have spanned 80 downtown blocks under Stoney’s initial proposal to the council.

The district would have diverted $600 million in downtown tax revenue from the city’s general fund to pay back the cost of replacing the Coliseum. That money would have otherwise gone to pay for core municipal services like roads and schools.

After months of public scrutiny, even the project’s proponents conceded the approach was unpopular and needed changing. A short-lived bid to redirect state sales taxes to the project died at the Virginia General Assembly this session.

The Navy Hill proposal called for a 17,500-seat arena that would replace the shuttered Richmond Coliseum; more than 2,000 apartments and condominiums; a high-rise hotel; 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 Transit System bus riders; and infrastructure improvements.

(804) 649-6734

Twitter: @__MarkRobinson

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