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Capital City Partners worked on $1.5B Navy Hill development, spiked in February
Capital City Partners worked on $1.5B Navy Hill development, spiked in February
Sydney Lake// May 6, 2020//
The development team that created plans for the failed $1.5 billion Navy Hill proposal in downtown Richmond has returned to the scene, this time with a lower-stakes proposal that would not require funding by the city, a sticking point in the earlier plan.
Capital City Partners LLC, the partnership between Michael Hallmark of Los Angeles-based Future Cities LLC and Susan Eastridge of Fairfax-based Concord Eastridge Inc., submitted an unsolicited proposal May 1 to purchase the city’s Public Safety Building at 500 N. 10th St. for $3.175 million in the next 90 days. If the plan moves forward, the building would be demolished. In its place the developers would erect an office tower with 150,000 square feet dedicated to VCU Health System administrators and physicians, plus 150,000 square feet of Class A office space and 20,000 square feet of ground-level retail space that would include a pharmacy. The VCU Health project was originally proposed as an added incentive in conjunction with the Navy Hill project.
The project also would include new locations for The Doorways and Ronald McDonald House Charities, nonprofit organizations that provide space and hospitality for families of patients, and space for VCU Child Care. The entire deal would be funded through private investors — at an expected cost of more than $350 million, according to the developers — and would not rely on city funding or a tax-increment financing (or TIF) model, according to the developers. They predict that the development, on a property which currently brings in no tax revenue, would bring in $60 million in local taxes over the next 20 years.
Richmond-based architecture firm SMBW would design the project, according to the proposal, which comes with letters of support from officials with VCU Health System, Ronald McDonald House Charities, The Doorways and the VA Bio+Tech Park, which is adjacent to the site. CBRE’s Richmond office appraised the property, a 2.92-acre site.
The developers also propose rebuilding East Clay Street between 9th and 10th streets. East Clay Street is currently interrupted by the public safety building.
Missing from the proposal is any direct reference to NH District Corp., the group founded by Dominion Energy Inc. President and CEO Thomas F. Farrell II with other Richmond business leaders to redevelop the 10-block area dubbed Navy Hill. The group’s $1.5 billion development plan, which was rejected in February by Richmond City Council, included a partly publicly funded $235 million replacement for the Richmond Coliseum, along with office space, residences, retail and a luxury hotel. Virginia Commonwealth University’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 temporary construction jobs.
The aborted Navy Hill project was championed by Mayor Levar Stoney but met with city residents’ objections to secrecy surrounding early negotiations, high rents and a proposed special tax district to direct local taxes to pay for part of the new arena, among other concerns. Proponents, however, saw the project as a necessity to bring jobs and growth to Richmond’s downtown.
“There is sincere urgency to this offer, and time is of the essence for this land sale,” Eastridge and Hallmark wrote in their May 1 letter to interim city Chief Administrative Officer Lenora G. Reid. “The key tenants proposed for the development, VCU Health System, The Doorways, Ronald McDonald House Charities, and VCU Child Care need these new facilities now. As they were originally intended to benefit from expanded facilities in the proposed Navy Hill development, their plans have been stalled, creating uncertainty for their leadership, for essential workers and staff, and for their philanthropic supporters.”
The Doorways currently operates in a 117-room former hotel and typically lodges 150 children and adults, and Ronald McDonald House Charities currently has nine guest rooms at its facility on Monument Avenue. Capital City Partners says it expects to complete the project by the third quarter of 2023.
