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Mayor Stoney pushes $1.4B plan to revitalize Downtown

Jeremy M. Lazarus | 11/8/2018, 6 a.m.
The grand plan to overhaul a big chunk of Downtown — including replacing the Richmond Coliseum with a new, larger ...
This map shows the 80 block section of Downtown to be included in a proposed Tax Increment Financing, or TIF, District. Increased earnings from real estate taxes within the district would be used to pay off $350 million in borrowing for a new Coliseum and other public projects, including elevating the portion of Leigh Street around the Coliseum and reopening 6th Street to traffic. The proposed boundaries for the TIF district are the Downtown Expressway, 1st Street, 10th Street and Interstate 64/95. Projections are for the area to generate $1.1 billion in additional real estate taxes, as well as $600 million in increased sales, lodging and other city taxes, over 30 years. The TIF district is eight times larger than originally proposed. The blue-color blocks represent sites where the new Coliseum, a new convention hotel, restaurants, office buildings and about 3,000 apartments would be erected. Hunden Strategic Partners

With the mayor needing seven votes from the nine-member City Council to move this project forward, it is unclear what impact the issues of school buildings and the proposed relocation of the Social Services building will have on deliberations.

Several council members have expressed concerns. However, only 8th District Councilwoman Reva M. Trammell has said she would oppose the development.

At this point, the mayor is focusing on the positives of development, particularly the 12,000 construction jobs and 9,000 additional jobs that a Virginia Commonwealth University study projects would be created by the offices, hotel, retail operations and grocery stores.

The mayor also points to the major changes that would be ushered into a long staid area in a project that would add 14 new buildings, including the centerpiece arena. Eleven of the new buildings would be located within the blocks bounded by 5th, 10th, Leigh and Marshall streets.

Along with the new Coliseum, the development would include a new hotel, five apartment buildings, two new office buildings, a new indoor GRTC transit center and a new Doorways Hospitality House.

The development would not touch the John Marshall Courts Building or the Federal Building. It would retain two parking decks that would be wrapped with apartments, but would replace the city’s aging former Public Safety building and the Social Services building.

Three city-owned parking lots at 4th and Broad, 6th and Broad and 6th and Grace streets also would gain new apartment buildings as part of the total development.

In all, 2,936 apartments would be created between 2019 and 2024 if council gives the green light.

To carry out this plan, City Hall would team up with a private group, NH Foundation and led by Dominion Energy’s top executive, Thomas F. “Tom” Farrell II, to carry out a project Mr. Farrell and his group dreamed up and which would easily be the largest economic development project in the Richmond area.

As proposed — and only if the council approves it — the city would sell the mostly public property in the main project area to the city’s Economic Development Authority, which would then lease it to NH Foundation for up to 99 years. NH Foundation would then become responsible for covering the cost of operating and maintaining the Coliseum and for finding the private investors and lenders to put up the money to build the apartments and other buildings.

Underlying the whole plan is a proposal that would earmark the growth of real estate taxes to be generated both in the main project blocks and 57 other blocks to repay the $350 million that the city would use to build the new Coliseum, revamp the Blues Armory and pay for new infrastructure, including revamping several streets.

The total 80-block area, called a Tax Increment Financing District, or TIF, would be bounded by 1st and 10th streets and run from Interstate 64/95 to the Downtown Expressway.

The city’s general fund would continue to receive the same level of real estate taxes it does now from the 80-block area. Revenue from other city taxes, including sales, lodging, meals and admission, would continue to go to the general fund, except those generated in the main project area. Money from those taxes also would go to the TIF District to repay borrowing.

The 80-block TIF District is eight times as large as initially proposed, but was increased to ensure that there would be enough tax growth to pay off the $350 million in revenue bonds the city would sell, officials said.

Even before the City Council review begins, several members, including Parker C. Agelasto, 5th District, and Kim B. Gray, 2nd District, have expressed concern about the size of the TIF District and the tax dollars that would need to be used to pay the debt on the new Coliseum.

Other council members are worried about the proposed relocation of the Social Services operations, which could force people applying for food stamps and other services to travel more than an hour on public transit to get to the proposed new location.

“I have already told the mayor that would be unacceptable,” Councilwoman Ellen F. Robertson told the Free Press.