A citizen has filed a federal complaint against the group behind the $1.5 billion plan to redevelop downtown Richmond around a new arena, arguing that NH District Corp. has functioned as a lobbying organization, not a charitable one, to rally public support for the Navy Hill project.
Jeff Thomas, a Richmond native and author, filed the complaint Monday with the IRS. He alleges that NH District Corp. violated federal guidelines for nonprofits by refusing to hand over its financial statements upon request. The complaint alleges that the developers also violated federal rules by lobbying for passage of the city ordinances that would advance their own development proposal to replace the Richmond Coliseum and reap profits for private individuals and companies.
If the IRS finds the allegations credible, the complaint could jeopardize NH District Corp.’s tax- exempt status.
“They were not fulfilling their legal obligations to release their tax returns and I allege, based on the available information, that they are not operating as a charitable organization. They are operating as a political lobbying organization,” Thomas said in an interview.
A spokesman for NH District Corp., led by Dominion Energy CEO Thomas F. Farrell II, denied that the group had violated the federal rules on excessive lobbying and private benefit.
In a statement late Monday, the spokesman, Jeff Kelley, said Thomas’ complaint contained “false and misleading information.” NH District Corp.’s lobbying efforts for the project did not violate federal rules, he said.
“This complaint is another attempt to keep the status quo in place and to discredit philanthropic attempts by the NH Foundation and others to make a difference in the lives of Richmonders,” Kelley said.
Thomas said he requested the group’s financial statements last week but was told they were not available. Thomas said that when he persisted, Kelley told him to send a written request in the mail before NH District Corp. would provide him with access to the documents, according to the complaint, which was first reported Monday by VPM.
On Monday afternoon, NH District Corp. posted one of its financial statements on its website. The statement showed that the nonprofit received $3.5 million from two donors during the period that ran from July 1, 2017, through June 30, 2018: $2 million from Atlantic Union Bank and $1.5 million from Dominion Energy.
“I shouldn’t have to go to the IRS to get these people to follow the law,” Thomas said.
Thomas’ complaint cites marketing materials, social media posts and emails that NH District Corp. has disseminated in an effort to steer people to meetings about the project or else advocate for its approval. The complaint also cites public statements that affiliates of the group have made urging residents to contact their council members in support of the project.
The complaint is the latest stumbling block to arise as the massive project inches through a review by the Richmond City Council, which must sign off on the project. NH District Corp. submitted its development plans to the city last year; a final vote is not scheduled until early next year.
Tensions around the proposal have risen in recent weeks. A citizen commission appointed by the council has sparred over the project’s merits and pitfalls. Opponents of the plans have rallied at City Hall. The project’s backers came under fire for compensating people who attended a council meeting to support the proposal.
NH District Corp.’s plans call for a 17,500-seat arena that would replace the 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.
Richmond Mayor Levar Stoney’s administration has proposed creating a tax increment financing zone to pay for the new arena. The zone would divert all new real estate tax revenues from an 80-block area of downtown to pay back the project’s bondholders. Over 30 years, the arena debt would cost the city as much as $600 million.
NH District Corp. has said it will privately source $900 million for the first phase of the project if it is approved.