RICHMOND, Va. (WRIC) — Mayor Levar Stoney unveiled plans last week to redevelop downtown Richmond as we know it. The mayor’s proposal includes a new arena, new shops, a GRTC transit building and more.
Several questions have come up since the proposal was shared with the city council on Monday. Many would like to know how the project will be paid for and what risks the city could be taking.
Financial advisers with Davenport & Company, who are working for the city of Richmond, laid out how the numbers would work to a room full of reporters on Wednesday. They assured the Navy Hill project couldn’t possibly hurt the city or taxpayers.
“There’s no downside to this,” David Rose, with Davenport & Co., said. “The biggest risk is doing nothing.”
Advisers said the Richmond Coliseum has been collecting dust and costing the city money for long enough. Under Stoney’s proposal, public bond dollars would build the new arena and $900 million of private investments would kick-start building private, mixed use developments on 10 downtown Richmond blocks.
“That’s something that’s very unique that we’ve never seen that before of this magnitude in the city,” said Rose.
The financial advisers say what makes them so confident is that the public bonds would be sold and the building of the hotel and other new developments would begin. Arena construction would also begin at the same time.
“All of that other development will produce significant dollars of revenue and those dollars of revenue are going to be critical to pay off the debt of the bonds,” Rose said the meeting. “What you have here is an unprecedented amount of dollars that will be coming to the city and they will be coming over the next several years.”
Virginia state law requires that the public recourse bonds are issued through the city’s Economic Development Authority. According to the mayor’s plan, the project would not need to dive into Richmond’s debt capacity. Instead, the financial advisers said it would add to the debt capacity by roughly $50 million over 30 years. Rose said that’s possible because of the simultaneous selling of bonds and buildings.