Developers behind the failed Navy Hill plan have pitched a $350 million development for the city-owned public safety building site.
Capital City Partners LLC offered Richmond $3.17 million for the derelict structure fronting North Ninth Street and the 3-acre property it stands on, according to a proposal addressed to interim Chief Administrative Officer Lenora Reid and dated May 1. The firm wants to demolish the 66-year-old building and replace it with a 545,000-square-foot development.
“We will carefully review the offer and follow the process outlined by the city code for considering unsolicited offers,” said Jim Nolan, a spokesman for Mayor Levar Stoney.
An unsolicited offer for city-owned land triggers a process that requires a competitive solicitation and City Council approval before a sale can be executed.
A city ordinance requires that the Stoney administration notify the council of any unsolicited offer it receives. Three council members — Kimberly Gray, Kristen Larson and Stephanie Lynch — said the administration did not notify them of the Capital City Partners offer prior to a breaking news report about it. It was first reported midday Wednesday by Richmond BizSense.
The pitch comes three months after the council rejected a larger plan Capital City Partners was part of to replace the Richmond Coliseum.
That $1.5 billion proposal, the source of nearly two years of debate and friction between a bloc of the council and the mayor, would have brought new housing, retail and office space to roughly 21 acres of publicly owned downtown real estate, including the public safety building site.
That plan’s backer — NH District Corp. — was led by Dominion Energy CEO Thomas F. Farrell. Farrell’s group enlisted Michael Hallmark of Future Cities and Susan Eastridge of Concord Eastridge for the arena project and surrounding development. Hallmark and Eastridge formed Capital City Partners together.
The original plan relied heavily on a tax-increment financing setup that would have diverted new real estate taxes and other local taxes toward paying back the cost of the new arena. That setup was a nonstarter for five members of the council and opponents of the project.
The new proposal does not seek that sort of subsidy, Capital City Partners stated in its pitch to the city, which estimated that under private ownership the development would generate $60 million in new tax revenue over 30 years.
The construction proposed closely mirrors a piece of the original Navy Hill plan.
After demolishing the existing structure, the firm proposes a development that would include 150,000 square feet of space for the Virginia Commonwealth University Health System and an additional 150,000 square feet of Class A office space for lease.
The plans also include a new 145-bed facility for nonprofit The Doorways; a 60-room facility for nonprofit Ronald McDonald House Charities; 35,000 square feet for a VCU Health System child care center; and 20,000 square feet of retail. Up to 1,900 parking spaces would be built on site, according to the proposal. Each of the tenants named in the proposal were in line for space in the original Navy Hill plan.
Additionally, Capital City Partners offered to pay to rebuild Clay Street between Ninth and 10th streets, another component of the original plan.
Its $3.17 million offer is based on an appraisal by CBRE, a commercial real estate firm. The property is assessed at $15.4 million, according to city property records.
Before the pandemic, the council began discussing a new planning process and solicitation for the public safety building site and other vacant property around the Coliseum. The city also received a separate unsolicited offer for the arena from Douglas Jemal, a Washington -based developer whose portfolio includes a number of properties in Richmond.