CoStar plans doubling Richmond workforce as part of Navy Hill development
The commercial real estate analysis company would increase to 2,000 employees.
CoStar Group, the Washington, D.C.-based commercial real estate analysis company, announced Monday it plans to build a 400,000-square-foot building in downtown Richmond, doubling its local workforce, as part of the proposed $1.5 billion Navy Hill development.
CoStar would double its number of employees to 2,000 in Richmond, where it already employs nearly 1,000 people, according to a press release from Navy Hill’s developers and CoStar.
“The Navy Hill development delivers everything a company like CoStar is looking for — access to transit, entertainment, conferencing and new multifamily residential housing, all in a walkable and vibrant neighborhood,” CoStar Group founder and CEO Andrew Florance said in a statement. Without the Navy Hill project, he added, “we would not be talking about significantly expanding our commitment to the city of Richmond.”
If the CoStar project goes forward, the company would move its employees from its 501 S. 5th St. office to the Navy Hill building, Navy Hill spokesman Jeff Kelley said.
Backed by a public-private partnership led by Dominion Energy CEO Thomas F. Farrell II, the Navy Hill proposal — with its centerpiece $300 million, 17,500-seat arena to replace the now-closed Richmond Coliseum — would be the largest-ever economic development project in Richmond history if it’s approved by Richmond City Council next month. Along with the arena, the project would include 260,000 square feet of retail and restaurant space; a luxury hotel within walking distance of the Greater Richmond Convention Center; 1 million square feet of commercial and office space; more than 2,500 apartments; a $10 million renovation of the Blues Armory building; and a GRTC Transit System bus transfer station.
The Navy Hill project is estimated to take four to five years to complete and would create 9,300 permanent jobs and 12,500 construction jobs, according to Virginia Commonwealth University’s Center for Urban and Regional Analysis.
Richmond Mayor Levar Stoney has given the plans his full support since they were released to the public last August, while others in Richmond have voiced strong reservations, including some members of the City Council-appointed Navy Hill Development Advisory Commission. Its report released in December stated, “A majority of commissioners did not find the proposed, publicly financed $300 million arena a sound and reasonable public investment in the redevelopment of downtown.”
Under the proposal, the city would take out $350 million in nonrecourse bonds, which would be paid back via a special tax district that would divert future real-estate tax revenue from an 80-block area downtown. That plan, too, has drawn concern both from city residents and commissioners that it would reduce money available for city schools and services.
However, a new state bill would shrink the special tax zone to an area just slightly larger than Navy Hill’s 10-block area. The legislation filed by Del. Jeff Bourne, D-Richmond, would divert sales-tax revenue from the state for the next 30 years, paying back $600 million to the arena’s bondholders. NH District Corp. said it would pay $900 million for the first phase of construction.
“We have been listening to residents and are working hard to address their concerns by shrinking the size of the increment financing area, building more affordable housing units in the project area, and providing the city with more revenue, more quickly,” Farrell said in a statement Monday.
“I’ve always spoken about the transformational opportunity that the Navy Hill project embodies,” Stoney said in a statement. “This is further proof that our downtown redevelopment isn’t just about buildings. It’s about the economic empowerment of thousands of Richmonders.”
Stoney also announced Monday that the Better Housing Coalition has worked with the developers to identify areas for housing for residents who earn between 40% and 60% of Richmond’s annual median income, which was $83,200 in 2018, according to the U.S. Department of Housing and Urban Development. Also, Navy Hill developers and GRTC officials are studying two options for the location of the bus transit center.
Richmond City Council also has hired its own consultant to study and issue a report on the plan in early February, with a vote on the project expected later in the month.