Navy Hill: Why so much paper?

Pic by Cam Thompson, https://twitter.com/CamThompsonCBS6/status/1158407187112321024

According to the City of Richmond’s website, the Mayor recently “introduced a package of legislation to City Council” for the Navy Hill development. “Package” is an understatement: the legislation actually is contained in two big binders with hundreds of pages.

Why so much paper?

It’s not an accident – the city wants this much paper. This deal is complicated, with multiple pieces of land changing hands, a long list of requirements that the developers have to meet, and complicated finance deals. The Stoney administration wants to make sure all the i’s are dotted and t’s are crossed before this thing starts.

City staffers I’ve spoken to like to say they’ve learned their lesson from the Redskins training camp deal, a cautionary tale for skeptics like me. The story they tell is that the state of Virginia basically handed the city something like a five-page agreement and told them to sign. Thanks to everyone’s lack of curiosity about the details, we found out that the training camp deal was, well, not so good; with Navy Hill, the city wants to avoid ugly surprises.

So what specifically is in these binders? You can find all the documents at the city’s website here, but basically what’s included are nine separate proposed city laws or ordinances.

(The Mayor has also included a tenth piece, a non-binding resolution that proposes how to spend any surplus money from the deal. This is NOT a law, and is only a statement of intent to future councils, so I’ll leave it for a later post.)

Let’s run through each of these ordinances – what do they do?

The first four ordinances (or “first four” in my looking at them - they don’t have to be in any particular order) set up the mechanics of the deal.

1. Probably the most important ordinance “executes” the development agreement – basically, it states that the city agrees to get into business with the developers. The “agreement” is a whole separate contract that lays out most of the deal’s specifics – what the developer and city each promise to do.

2. Of almost equal importance is an ordinance that creates the special city reserve fund where all the money from the “TIF” – the financing district – will go. As I’ve explained in previous posts, the city will use a Tax Increment Financing (TIF) scheme where future tax revenues from the project will be used to pay back the loan to build the arena. (I’ll have more on this financing in future posts.)

 3-4. Two of the ordinances move land ownership around. One transfers some city-owned land in the development area to Richmond’s Economic Development Authority, a separate government body that is authorized to facilitate these kinds of deals. The other ordinance transfers this land (and other parcels) from the EDA to the developers so that they can build all the stuff they want to build. Technically this ordinance just hands over the land to the developers, but that’s actually OK - it also references the development agreement where the developers have agreed to pay ~$15M for it.

The other five ordinances modify city rules and regulations to help the developers get the project done. This is not out of the ordinary, by the way – developers will often request minor changes to laws or exemptions from regulations to build something, although the scope and scale of change here is obviously much bigger.

5-6. One ordinance reconfigures “rights of way;” basically, it closes some streets and sidewalks. For the short term, this enables construction – you need a place to park trucks, equipment, and workers. But this should also help the developers create the pedestrian plaza space included in the plan. Similarly, an “encroachment” ordinance gives the developers the right to use the closed off spaces for construction. [This stuff gets highly technical, with lots of maps, so any real estate attorneys out there should let me know if I’m getting any of this wrong.]

The final three ordinances make three changes to the city’s zoning regulations. FYI, zoning rules limit what can be built where in a city; this is why you can’t build a Home Depot in the middle of a residential neighborhood.

7. The first of these three ordinances makes the biggest zoning changes; it updates the language in the city code for what kind of development is allowed in Coliseum district, including types of retail stores, the kinds and size of signs they can put up, and how much parking and open space they need to include. This ordinance basically rewrites or updates the city’s zoning rules for this area to match the project. (Maybe someone can find something sinister in here, but it seems to me to just update the code to be more in line with modern ideas about zoning.)

8-9. The second of these zoning ordinances expands the current official Coliseum district – which in the past was really just the coliseum block -- to include a few of the surrounding blocks. Originally most of the development blocks were in what is zoned as the “central business district.” Finally, a third ordinance changes the zoning designation of some streets to “priority” and “street-oriented commercial” streets, presumably to have them match their new purpose. (These are technical terms in the zoning regs that basically bring them under specific rules for development.)

Whew.

 All of these ordinances work together. The Council could pass some, but not others; but it would be unclear what point they were trying to make, beyond making life miserable for everyone involved. Council will likely pass all or none.

However, the connected nature of the ordinances does NOT mean that everything is set in stone in this deal. If a councilmember finds something objectionable in the zoning changes, say, or wants to modify the right-of-way configuration, they could modify the ordinance. BUT this means the council would have to find a way to negotiate the change with the developers, presumably with the city acting as intermediary.

Still, most of these ordinances seem to just make the development possible. The most likely target for any changes from the Council – assuming they don’t just vote the whole thing down - is the development agreement itself; this is where the city sets the price for the land that is handed over to the developers, and where the requirements for what the developers must provide is laid out.

But that’s a whole other binder. More to come.