An artist rendering shows some of the plans for the Navy Hill District Corp. redevelopment project in downtown Richmond.
At Monday morning’s Navy Hill development proposal work session at City Hall, Darrin Glymph, a partner with the law firm Orrick, Herrington & Sutcliffe in Washington, D.C., guided Richmond City Council members through a high-level legal overview of the Coliseum area plan.
Glymph said he and his firm know downtown revitalization. They were involved in several increment financing transactions in the D.C. area. Anyone who has spent time in Washington knows the transformation taking place, and the first slide of his presentation laid out what’s at stake for Richmond:
“The Navy Hill Development is the largest economic development project in the history of the City of Richmond and is expected to result in $1.5 billion of investment.”
For a project with such high expectations, the rest of the session left us, as well as members of council, in search of more details. Two months after Mayor Levar Stoney’s administration unveiled the plan to redevelop the coliseum and surrounding segments of downtown, the proposal still poses many questions.
The meeting, with five council members present, left us wondering:
Why did the city decide against an appraisal of the land it intends to sell to N.H. District Corp. (NHDC)? Was that a wise choice?
In a document addressing follow-up questions from a Sept. 23 work session, the city contended that “based on the complexity of the many parcel configurations, the $1.3 billion in private investment by NHDC, the absence of any request for city funding or incentives, and the host of benefits derived from the NHDC development proposal, the City believes it has negotiated a best value and benefits package.”
That value is $15.8 million, which the city would receive in the first five years from the developer. In a separate document provided at the meeting by Davenport & Co., costs of the city not pursuing the project include $1 million annually for the Coliseum that sits idle and debt service for four years (through FY 2024). The city’s public works department estimates demolishing the structure would cost $12 million, financed over five years (FY 2025 to FY 2029).
In either scenario, why not know what your land is worth? Is “believes” a word that will stand up years from now?
Is Richmond’s Economic Development Authority (EDA) adequately equipped to handle a project of this magnitude?
If the city sells the private parcels to NHDC, the remaining transactions will be managed by the EDA, a group that drives growth on behalf of the city. This includes the responsibility of a 30-year arena lease and a 65-year armory lease to NHDC. According to Glymph’s presentation, NHDC “will indemnify the EDA for certain losses.”
But what are “certain losses”? Members of council also expressed concern over EDA staffing levels, limited access to EDA meetings and confusion over a supposed liaison. Better coordination is needed before any vote from council takes place entrusting the EDA into this critical role and assuming the city will face no liability.
Why are the financial projections still lacking synergy and clarity?
In an 11”-by-17” spreadsheet, Davenport released debt service coverage/cash flow projections for incremental revenues from the project. Columns B and C caught Councilman Parker Agelasto’s eye.
One read “Expanded TIF (Dominion)” while the other read “Expanded TIF.” Roland Kooch, a representative from Davenport, said the separate figures represented scenarios where Dominion Energy might or might not build a second tower.
That revelation left council asking for stronger integration of projections from the firms involved — Davenport, Hunden Strategic Partners and Municap. Council President Cynthia Newbille ended up adjourning the afternoon council discussion and Q&A session so more information could be bundled for members.
At this point, Navy Hill is still a land of what-ifs. Councilmembers and Richmonders deserve better than that. We don’t know why only five of the nine council members attended Monday’s session, but we commend Agelasto, Newbille, Michael Jones, Kristen Larson and Andreas Addison for their tough questions. We look forward to hearing the answers.
— Chris Gentilviso