Richmond’s $1.5B Navy Hill project is dead

Richmond City Council members follow through on promise to spike project.

Published February 11, 2020 by Kate Andrews

Richmond City Council on Monday formally killed the $1.5 billion Navy Hill proposal, with seven of nine members voting to strike several elements of the plan from the council’s consent agenda.

After the vote, council members passed a resolution that Richmond Mayor Levar Stoney start over with a request for proposals to develop the area — but this time with community input on whether the city needs a new arena to replace the shuttered Richmond Coliseum. The process also would include an appraisal of the city-owned property and an assessment of nearby infrastructure.

The move came two weeks after five council members put forth the motion to strike, ending the six-month saga shortly before a scheduled up-or-down vote was set for Feb. 24. The council majority said at the time that they were not prepared to approve the public-private plan proposed by Dominion Energy President and CEO Thomas F. Farrell II, who formed NH District Corp. with other Richmond business leaders to develop the 10-block area that includes the Richmond Coliseum site. NH District Corp. submitted the only proposal when Stoney put out a 2017 call for proposals for the redevelopment effort.

The Navy Hill project would have included a partly publicly funded $235 million, 17,500-seat arena — the state’s largest entertainment venue — and 260,000 square feet of retail and restaurant space; a 541-room 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; and a GRTC Transit System bus transfer station. VCU’s Center for Urban and Regional Analysis estimated that the project, which would have taken four to five years to complete, would create 9,300 permanent jobs and 12,500 construction jobs.

In recent weeks, project backers also brought out ancillary economic development announcements by Virginia Commonwealth University’s VCU Health System, CoStar Group and a hockey team — all contingent on City Council approving the Navy Hill proposal. The status of these other projects is unclear, though as the Navy Hill deal was faltering, CoStar said it is looking at Henrico County and other locations, both inside and outside Virginia, as possible locations for an expanded operations center.

Among the problems cited by city councilors and Richmond residents were the size of a special tax district in the original proposal — 85 blocks, then shrunk to 11 blocks this month in a bill before the House of Delegates, since quashed — and the closed-door process before the unveiling of the plan last September.

A council-appointed commission issued a report in January that the arena was not “a sound and reasonable public investment in the redevelopment of downtown,” and a consultant hired by City Council, while largely complimentary of the project, cited several weaknesses, including the lack of an appraisal of the property.

More than 100 people signed up to speak at Monday night’s City Council meeting. Opponents, many of whom wore “Richmond for All” soccer-style scarves produced by a local group opposing the project, spoke about a lack of affordable housing and corporate interests superseding the interests of residents, particularly people concerned about the condition of the city’s schools. Dozens of Navy Hill supporters also spoke, saying that the deal would provide jobs and an economic boost for small businesses. Among them were two former City Council members and two current members of the city Planning Commission.

In the end, the five-member bloc stood firm on their decision from two weeks ago, despite their four colleagues attempting to persuade them to wait for the Feb. 24 vote. Ultimately, seven council members voted to spike the project, with 9^th District Councilor Michael Jones voting no and Council President Cynthia Newbille abstaining.

Stoney, the deal’s most vocal supporter, was not in council chambers during the meeting, a fact noted by 8^th District Councilor Reva Trammell, who questioned Stoney’s absence during what was the most important vote of his three-year tenure as mayor.

Stoney said later in a statement, “It saddens me that Richmonders won’t benefit from the housing, jobs and economic empowerment this project would bring — and I’m disappointed that council did not follow through on the process they laid out to review and evaluate this transformative project for our city — but I’m resolved to wake up tomorrow and keep working to move our city forward.”

NH District Corp. also released a statement: “While we are disappointed that five City Council members rejected the project, we are proud of the proposal that we delivered. Navy Hill would have offered a transformative opportunity for our city and for the Central Virginia region.

“Moreover, the community spoke — and we listened. We met with hundreds and hundreds of Richmonders over the course of two years,” the statement continued, adding that the corporation was “actively working on amendments to incorporate the suggestions we heard.”

So far, there is no timeline for a second request for proposals for the downtown neighborhood.