Richmond switches up stadium funding plan

UPDATED JULY 16

Richmond City Council this spring pitched a bit of a curveball on financing of the city’s new baseball stadium.

On May 8, councilors approved a plan that they say would save the city money and get the replacement stadium — part of the proposed Diamond District — completed in time to meet the Richmond Flying Squirrels’ 2026 season deadline.

Davenport & Co., the city’s financial adviser, recommended issuing $170 million worth of general obligation bonds to finance the Diamond District’s stadium and first-phase infrastructure work, rather than community development authority bonds, as planned.

That would put the city on the hook for paying off the bonds if projected revenue falls short, although the new structure would also have economic benefits, including a lower interest rate that is expected to reduce costs by $215 million over the next 30 years. Also, if the bonds were issued by July 1, the state would have chipped in $24 million through its sales tax incentive program, but Richmond missed that deadline.

“When cities take on the role of developer, they are assuming risk for taxpayers,” Terry Clower, director of George Mason University’s Center for Regional Analysis, says. “In this case, there are compelling reasons for the change in financing that recognizes market conditions and a particular state tax incentive.”

However, attorney and activist Paul Goldman filed a lawsuit in May, challenging the city’s plan to issue the bonds without a November ballot referendum.

“It’s the public’s money; it’s not the politicians’ money,” and residents should get a vote, Goldman argues, but his lawsuit was tossed out in June by Richmond Circuit Court Judge W. Reilly Marchant. The only way to force a referendum without a court order was to have roughly 11,000 Richmond voters’ signatures within 30 days of the city’s notice of the ordinance’s adoption, published May 12.

That’s a “task worthy of Hercules,” Goldman says. “It can’t be done unless you’re going to spend a fortune.” On June 28, Goldman said he wouldn’t appeal the court’s decision.

However, for Richmond Mayor Levar Stoney, the Squirrels’ new stadium is on deck.

“We are full speed ahead on delivering a world-class baseball stadium and an exciting new neighborhood for ALL to enjoy,” Stoney said June 10 in a statement. “The Flying Squirrels are here to stay in Richmond!”