Two thousand more jobs could come to downtown as part of the $1.5 billion Navy Hill plans, Richmond Mayor Levar Stoney announced Monday.
CoStar Group, a commercial real estate analytics firm, is in talks with the project’s developers to lease an office tower that would rise north of City Hall if the plans move forward. The office would be home to 2,000 new jobs the company would add over a five-year period, said Andrew C. Florance, CoStar Group’s CEO.
“We believe in the potential of the Navy Hill project and that it could provide an ideal solution for our company’s future growth here in Richmond,” Florance said at a news conference called by Stoney.
Florance later added: “If there wasn’t an opportunity to do the Navy Hill project, we would still work to try and find a solution, but this seems like a very compelling solution to us.”
The announcement highlighted a flurry of news Stoney shared at Monday's news conference as his signature project inched closer to a final vote that the council scheduled for next month.
CoStar Group has a Richmond office in the WestRock building on Fifth Street, but that space could not accommodate its expansion, Florance said. The Washington-based company is working to reach an agreement for 400,000 square feet of office space next to the proposed arena that would replace the Richmond Coliseum. The project’s developer, NH District Corp., touted the talks as proof its plans will spur growth in the area.
“CoStar is looking very seriously at coming here as well to this part of the city, only because Navy Hill will be here,” said Thomas F. Farrell II, chairman of the NH Foundation board and CEO of Dominion Energy.
The Stoney administration has said the economic development project would create 9,300 permanent jobs downtown. CoStar’s expansion would add to that figure.
The Navy Hill proposal calls for a 17,500-seat arena; more than 2,000 apartments and condominiums; a high-rise hotel; 1 million square feet of commercial and office space; 260,000 square feet of retail and restaurant space; renovation of the historic Blues Armory; a new transfer plaza for GRTC Transit System bus riders; and infrastructure improvements.
Stoney said Monday that he wants to address concerns that have surfaced about the project as it has gone through the council’s review process. His administration will pursue a series of amendments to the plans he negotiated over 18 months.
The Virginia General Assembly will consider a newly introduced bill that would allow Richmond to keep state sales tax revenue the project would generate. Stoney said that sales tax revenue could help the city reduce “by more than half” the size of a special tax zone on which the project’s financing relies.
Proposing that bill is Del. Jeff Bourne, D-Richmond. Bourne received $22,000 in donations from Dominion Energy, as well as a $2,500 donation from Farrell, while up for re-election last year against a Libertarian challenger, a race Bourne won with over 88% of the vote. He said those donations did not influence his decision to carry the legislation, which he has said is "not an endorsement" of a project he has not vetted.
Opponents of the development plans questioned whether Bourne's employment posed a conflict of interest. Bourne is general counsel for The Branch Group, a Roanoke-based firm that was listed as a collaborator in the initial proposal NH District Corp. sent to the city in February 2018. A spokesperson for NH District Corp. said last week that Branch is no longer involved with the plans, and hasn't been since the end of 2018.
When Stoney introduced the project in August, he proposed an 80-block zone bounded by First Street, 10th Street, Interstate 95/64 and Byrd Street. The size of the zone, called a tax increment financing district, or TIF, has become a major stumbling block for some on the council. A citizen commission that reviewed the plan suggested reducing the district's size in a report issued last month.
All future real estate tax revenue within the zone, either from new construction or natural assessment growth, would go to pay down the project's bonds. A smaller zone would mean less city real estate tax revenue would be obligated to paying off debt for the project. Those dollars would otherwise flow to the city's general fund, which is used to pay for such basic services as schools and road maintenance.
Stoney said a separate amendment will pledge a higher percentage of affordable housing units in the development’s footprint. That change is necessary to comply with a council policy requiring that 15% of the project’s apartments be reserved for people earning less than the area’s median income. As originally proposed, the plans did not meet that threshold.
Stoney also said the developers are studying an alternate location for the proposed GRTC transfer station on Broad Street. That location is the city-owned parking lot on East Broad Street between Fourth and Fifth streets, said Susan Eastridge, a developer working with NH District Corp. on the project.
As originally proposed, the transfer station would rise on a city-owned parking lot bounded by Ninth, 10th, Leigh and Clay streets. GRTC officials have expressed reservations about the site and overhead costs associated with leasing and operating it. The existing transfer station is on North Ninth Street.
Stoney said the amendments signified his willingness to work with the council to reach a compromise on the plans. Joining him at the news conference were Council President Cynthia Newbille of the 7th District and Councilwoman Ellen Robertson of the 6th District. Whether the changes will sway council members who are skeptical of the project is unclear. Seven of the nine council members must vote for the plans for them to move forward.
Said Stoney, “This is what it means to do the hard work of ensuring that the community’s voices are heard.”