$40M Diamond District lawsuit dismissed in Richmond

A Richmond Circuit Court judge dismissed a $40 million lawsuit over the city’s $2.44 billion Diamond District project last week, in which a Connecticut developer claimed its former partners, including Richmond’s Thalhimer Realty Partners, cut it out of the development deal.

Judge Bradley B. Cavedo ruled Jan. 22 in favor of defendants Thalhimer, a subsidiary of Cushman & Wakefield | Thalhimer, and Chicago-based Loop Capital Holdings, which requested a demurrer on the complaint. Republic Projects sued the two companies and four employees of the two firms in July 2024, alleging that they cut Republic out of the project and formed their own development partnership, Diamond District Partners, behind Republic’s back.

In his ruling, Cavedo wrote that “the court finds a distinction between pursuing a contract and carrying on as co-owners of a business. The course of dealing between the parties was considered in the court’s determination of whether a partnership was adequately pled. However … the court finds that the plaintiff has not advanced facts that, if taken as true, would support plaintiff’s claims against the defendants.” The ruling gives the plaintiff 28 days to amend its lawsuit.

“We are pleased with the court’s ruling,” Cushman & Wakefield | Thalhimer CEO Lee Warfield said in a statement Monday on behalf of Thalhimer Realty Partners, Diamond District Partners and Jason Guillot, a Thalhimer principal who is the Diamond District’s lead developer. “Our team is now 100% focused on bringing the Diamond District project to fruition for the benefit of the City of Richmond, its residents and all of the visitors this project will attract.”

The Diamond District is set to be the city’s largest mixed-use development project, centered on the new stadium for the Richmond Flying Squirrels Double-A baseball team. Republic, Thalhimer, Loop Capital and other developers won the project as RVA Diamond Partners in 2022, but Republic Projects and Loop Capital are no longer part of the development.

The 67-acre, $2.44 billion Diamond District project’s first phase is expected to cost $627.6 million, and includes an 8,000-capacity, $117 million-plus baseball stadium dubbed CarMax Park, which is set to open in time for the 2026 baseball season. The development is also set to include a hotel with at least 180 rooms from a high-end brand, such as Hilton or Westin, and 2,800 residential units, 935,000 square feet of office space, 195,000 square feet of retail and community space, and another hotel.

The Squirrels team is overseeing the stadium’s construction, which will replace the 40-year-old Diamond.

In August 2024, the Richmond Economic Development Authority’s board approved a 30-year lease and stadium development agreement between the EDA and the Flying Squirrels, in which the Squirrels will pay $3.2 million in annual rent for the next 10 years, with the rates decreasing after that point.