Independent Commission Says Richmond Coliseum Redevelopment Isn't A 'Sound Public Investment'
The independent commission set up by Richmond City Council to vet the $1.5 billion coliseum redevelopment proposal presented a mostly bleak view of the project at a meeting Monday night.
The Navy Hill Development Advisory Commission issued a final report in late December after two months of public meetings. The report gave a thumbs up to certain aspects of the project, including a proposed $300 million in contracts for minority businesses and its benefits to Virginia Commonwealth University. But a majority of the nine-person commission agreed that the proposed project was not a “reasonable and sound public investment.”
“The commissioners who held this view generally found the arena to be highly risky and that alternative approaches to downtown redevelopment were possible,” said Commission Chair Pierce Homer.
The commissioners looked at 17 key issues surrounding the Navy Hill project. The proposal was first introduced by Richmond Mayor Levar Stoney earlier this year. Included in the proposal is a $300 million public bond for building a new downtown arena and more than a billion dollars in new, private development in the surrounding neighborhood.
Stoney has proposed paying for the arena bonds using a special type of financing known as tax increment financing. The plan would essentially divert any new property taxes from 80 blocks of downtown to a repayment fund.
A majority of commissioners felt the proposal threatened funding for future city projects and schools. The commission found that more than $300 million in tax revenue that would be generated by existing businesses and properties over the next 30 years would go toward paying off the arena bond, money that could otherwise be spent on city services.
“The large increment financing area...includes a substantial number of existing downtown
properties that normally would have all of their tax revenues dedicated to the city’s General Fund,” wrote Commission Vice Chair John Gerner in the report.
Gerner also highlighted the potentially negative effects the project could have on state funding for education, something first reported by VPM News.
According to the commission’s analysis, the City of Richmond would not receive substantial tax revenue from the project until the bond for the new arena is repaid in 24-30 years.
A majority of commission members also concluded that the city has not properly estimated how much it will cost to oversee the project. Costs would include staff time spent on reviewing construction permits and providing city services to the more than 2,000 new residents potentially moving into the area.
On a majority of the 17 issue areas, however, the commission could not reach a conclusion. On those issues - affordable housing, a GRTC transit center, the construction schedule - the commission says it did not have sufficient information.
In a written response to the report, the proposed developer NH District Corp. called the report “fragmented” and said they felt “disregarded” by the commission.
“It is contradictory to cite insufficient information yet find a concrete conclusion about ‘risks’ in the report.” the statement read.
Richmond City Council has also hired a consultant to review the proposal. They’re expected to vote on whether to proceed with the Coliseum redevelopment project sometime in the coming months.