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Project on former Best Products HQ site to include 17,000-seat arena, hotels, retail, office and housing
Sydney Lake //December 1, 2020//
Project on former Best Products HQ site to include 17,000-seat arena, hotels, retail, office and housing
Sydney Lake// December 1, 2020//
Henrico County officials announced Tuesday plans for a $2.3 billion arena-anchored development, born out of the failed Navy Hill project proposal for downtown Richmond. But with private financing and no projected impact on county taxpayers, the GreenCity development may have a smoother path.
Proposed on the 204-acre former Best Products property owned by the county, GreenCity would be a mixed-use “ecodistrict” including a “green” 17,000-seat arena, 2.3 million square feet of office and retail space, 2,400 housing units and two hotels, with a sustainability focus.
The arena would be in operation in 2025, and the former Best headquarters would be adapted to commercial office space for multiple tenants, according to the proposed timeline for GreenCity. The buildout would be complete in 2033.
The project is being developed by Capital City Partners LLC, a partnership between Michael Hallmark of Los Angeles-based Future Cities LLC and Susan Eastridge of Fairfax-based Concord Eastridge Inc., who teamed up on the $1.5 billion Navy Hill proposal, which was rejected by Richmond City Council in February 2020.
Unlike the Navy Hill project, GreenCity would be privately funded with four sequences of development over 12 years, according to documents from the developers. The arena would be financed through Community Development Authority (CDA) bonds, “which direct incremental taxes from the Best Products site’s new development, along with revenues generated by the new arena to pay off the cost of the arena.”
Developers expect the bonds to close in 2023 with enough funds to build the arena, including $1.4 billion in arena revenues, $650 million in total gross debt service over a bond term of 30 years, and $750 million returning to Henrico County over the term. Once all bonds are repaid, all tax revenue would go to the county.
The first step of the process would take place in January, when the Henrico County Board of Supervisors must approve the site transfer to the county’s Economic Development Authority (EDA) for the project to go forward.
Navy Hill’s corporate backers are not involved in GreenCity, the developers said in their statement. Dominion Energy Executive Chair Thomas F. Farrell II was chairman of the nonprofit NH Foundation board formed in 2017 with NH District Corp., which was the only entity that responded to the city of Richmond’s request for downtown revitalization proposals later that year. Other board members included Martin J. Barrington, former chairman and CEO of Altria Group, and William H. Goodwin Jr., the retired chairman and president of Riverside Group who owns the Jefferson Hotel.
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.
One of Richmonders’ chief objections to Navy Hill was the proposed Tax Increment Finance (TIF) area downtown that would have used tax revenue to pay for the arena; originally an 85-block area, the TIF district shrank to 11 blocks amid continuing controversy. Residents and city councilors still were concerned that the project could take money away from schools and other infrastructure, leading to a split City Council decision to kill the deal in February.
GreenCity, however, is “completely different,” according to developers, “as this development plan is based on green space versus infill,” and the CDA would encompass only the development area. They project that once the arena bonds are paid off, “GreenCity will become the largest single generator of tax revenue in the county.”
“We are thrilled to endorse this bold, visionary opportunity, as it is in sync with everything that Henrico County stands for and has been working hard to achieve — inclusion, resiliency, mobility, innovation and job growth,” Henrico County Manager John A. Vithoulkas said in a statement.
GreenCity will be designed with environmental sustainability, civic engagement and inclusion in mind, according to the county, and will include parks, trails and open spaces.
“We’re talking about a new kind of community that is intricately planned, inclusive for all and thoughtfully designed to be not only livable but also to set new standards for environmental sustainability,” Vithoulkas said in a statement. “GreenCity will be a community that preserves, embraces and showcases open space, and it will drive economic development and tourism in new and exciting ways while remaining respectful to county taxpayers.
The arena will include flexible seating configurations for concerts, shows and sports teams, including ECHL Hockey and G-League Basketball, according to Henrico County.
“The arena will put this region back on the entertainment map,” Vithoulkas said in a statement. “It also will provide tremendous benefits to our county while creating no financial risk to our taxpayers.”
If the project receives approval from the Henrico County Board of Supervisors, the EDA anticipates it will enter into an agreement to convey the land to the developers pending rezoning approval. Developers anticipate a formal plan and rezoning application will be submitted to the county in early 2021. Officials will conduct a financial projection review as part of the proposal.
The Navy Hill project, which was championed by Richmond Mayor Levar Stoney, 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 have created 9,300 permanent jobs and 12,500 construction jobs.
