A Virginia lawmaker has introduced a bill that would allow debt from a proposed Richmond arena development to be paid off using a portion of state tax revenues, and could drastically reduce a proposed tax increment financing district.
NH District Corp–a group led by Dominion Energy CEO Thomas F. Farrell II–is proposing a $1.5-billion redevelopment of a roughly 10-block area in downtown Richmond that includes the Richmond Coliseum site. The aging venue would be replaced by a new 17,500-seat arena in the process, while surrounding development would include a 541-room Hyatt Regency, a renovated Blues Armory, 1-million square feet of commercial and office space, 260,000 square feet of restaurant and retail space, over 2,000 residences (condos and apartments), and more.
As part of the proposal, Richmond officials have been weighing a proposed tax increment financing (TIF) district that would span a roughly 80-block area and help pay off public components of the initiative, including the new $300-million arena. Thus far, that part of the proposal has been met with trepidation from some city officials, but proposed legislation could allow the Richmond arena TIF district to shrink. Filed by delegate Jeff Bourne of Richmond, the bill would allow the use of more than two-percent of state sales and use revenues to help the city pay off bonds. According to an estimate, this would generate over $55 million in state revenues to help pay off the project and allow the proposed TIF zone to be downsized to the equivalent of 11 blocks.
The legislation was introduced last week, and will require approval from state lawmakers if it is to move forward. More from RichmondBizSense.com:
An analysis by NH District Corp. and city administrators projects that the controversial proposed tax increment financing area to support Navy Hill could be shrunk from an approximate 80-block area to the equivalent of 11 blocks, as a result of the legislation that would provide just over 2 percent of state sales and use tax revenues generated by the project to help the city pay off the $300 million in bonds that would fund the arena.
The percentage would produce $55.7 million in state tax revenues to help pay off the arena bonds over 30 years, according to the developer. With those funds added, NHDC says the 11 blocks – consisting of only the project properties, Dominion Energy’s new downtown tower and the utility’s planned second tower – would generate enough incremental real estate tax revenue from new development and increased assessments to cover the rest of the bonds. It would in turn rely less on city taxes to pay off the bonds.
The analysis from NHDC – a group that includes Dominion CEO Tom Farrell – was presented to members of Richmond City Council at a committee meeting Thursday, just hours before the last in a series of public hearings on the project that council has been holding over the past two weeks. A final public hearing would come before a vote, which council is aiming to make by the end of February.
The financing area – also referred to as a TIF, or tax-increment financing district – was previously proposed for an 80-block area bordered to the west and east by First and 10th streets, and to the north and south by Interstate 64-95 and the Downtown Expressway.
Should the proposed development move forward, it would result in the demolition of Richmond Coliseum, which first opened in 1971. The proposed scope of the new arena positions it to the largest of its kind in the state of Virginia, and it could be a draw for events such as concerts, sports tournaments, and more.
Rendering courtesy NH District Corp.
RELATED STORIES: Committee Raises Red Flags on Richmond Arena Finances; Spectra Tapped for Proposed Richmond Arena Management; Attempt at Referendum on Richmond Arena Development Project Falls Short; Richmond Weighs Coliseum Redevelopment Advisory Referendum; Proposed Richmond Coliseum Redevelopment Unveiled; Richmond Coliseum Redevelopment Plan to be Introduced; Major Markets, Major Arena Issues; Mayor Backs Richmond Coliseum Redevelopment Plan; Richmond Coliseum Replacement Part of RFP; Two Firms to Consider Richmond Coliseum Replacement; New Richmond Arena in the Works?
