Richmond Mayor Levar Stoney’s administration has briefed City Council members on his plans to move forward with a proposal to build a new arena and redevelop a valuable swath of city-owned downtown real estate.
The city will enter into formal negotiations with NH District Corp., a group of corporate leaders formed last summer that is led by Dominion Energy CEO Thomas F. Farrell II. In February, the entity submitted the lone pitch in response to the city’s request for proposals for the project.
“Though many questions remain and there are important points to negotiate, based upon the results of this review process, I believe there is potential in this proposal to provide transformational change in an underutilized portion of downtown, without negatively impacting the city finances or debt capacity,” Stoney said in a news release sent after the Richmond Times-Dispatch published an earlier version of this story online.
“After briefing the members of City Council, I’ve instructed staff to negotiate with NH District Corp. with the understanding that we will only take the next step in this process if we determine it is in the best interests of the community,” Stoney said in the statement.
Stoney aims to formally introduce a package of ordinances advancing the redevelopment in September. The timeline and some details of the proposal, which includes capital investment in excess of $1 billion, were shared during confidential meetings the mayor’s administration called with council members this week, according to four sources with knowledge of the meetings and proposal.
Farrell’s group had expressed interest in overhauling the area before Stoney announced the request for proposals, or RFP. That Farrell’s group then submitted the only response to the call for proposals raised questions for some about the legitimacy of the RFP process.
Jeff Kelley, a spokesman for NH District Corp., said in a statement that the group heard from more than 1,000 people through its website and a series of events held prior to submitting its proposal. The group invited feedback from the public, Kelley said.
“We have much more listening to do, and we look forward to working with the city to outline details of how the next steps of the RFP process will advance,” Kelley said. “We commit to additional public engagement to further refine the plan.”
The meetings with some council members included a presentation by the city’s external financial adviser, Davenport & Co. The administration emphasized the details of the final plan were still fluid, the sources said.
With the request for proposals, Stoney is aiming to remake a roughly 10-block area of downtown bounded by North Fifth Street, East Leigh Street, North 10th Street and East Marshall Street. The area includes about 21 acres of publicly owned property.
Anchoring the redevelopment would be a new 17,500-seat arena to replace the existing Richmond Coliseum, which Stoney has characterized as a “decaying public asset.” The city request for proposals also calls for a 400-room hotel, a new transfer station for GRTC Transit System riders, the preservation of the Blues Armory building, and the creation of mixed-use, affordable housing.
How the redevelopment will be financed is still an open question.
When the request for proposals was announced, Stoney said the city would not issue any general obligation bonds to finance the development. However, proposals that incorporate tax-increment financing would be considered “if needed,” he said at the time. The financing mechanism is still a part of discussions, the sources said.
Tax-increment financing would dedicate a portion of the additional property tax revenue generated by the redevelopment within the district to pay off bonds for the project, while generating revenue that could be applied to other priorities.
The meetings with council members come four months after the city received the proposal. The Stoney administration has put out little information about the project in the interim despite several requests.
To date, the city has not released the proposal. Officials have cited a discretionary exemption under the state’s open records law that allows a public body to withhold information that it believes would “adversely affect” its bargaining or negotiating position.
Since February, city staff members across several departments have reviewed the proposal and requested more information from the bidder. The city said in the spring that it expected to conclude its review and announce a next step in the process by the end of June.
The city is poised to take on the Coliseum redevelopment as the council works to tie up loose ends from two significantly smaller economic development deals — the Washington Redskins’ training camp facility and Stone Brewing’s brewery and bistro — brokered under then-Mayor Dwight Jones.
Council President Chris Hilbert said he expected the council to take its time reviewing and amending whatever plan the Stoney administration puts forward to replace the Coliseum.
“I don’t think we’re going to have a take-it-or-leave-it proposal,” Hilbert said. “I think those days are over.”