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City’s economic promises with NFL training camp have yet to materialize

Jeremy M. Lazarus | 7/29/2016, 7:38 a.m.
Richmond has yet to receive a big chunk of the promised payoff from the much touted economic deal that resulted ...

Richmond has yet to receive a big chunk of the promised payoff from the much touted economic deal that resulted in Washington’s pro football team holding its summer training camp in the city, according to a Richmond City Council member.

City Councilman Parker C. Agelasto, 5th District, said he believes the deal has generated at least $1 million less in property taxes than Mayor Dwight C. Jones and his staff projected would be received when it sold City Council on the deal in 2012.

That $1 million represents 25 percent of the $4 million the city projected it would receive through 2023 from new business and property tax revenue from properties associated with the deal.

In turn, less money than expected is being steered to Richmond Public Schools, which the council insisted was to get the lion’s share of new tax revenue flowing from the training camp and other elements of the project.

In 2012, under an agreement that City Councilman Chris A. Hilbert, 3rd District, brokered with the Jones administration and which passed council as a resolution, the school system was to realize more than $555,000 a year from the deal, with about $320,000 going to meet school repair needs and the rest going for school programs.

The funding was based on projections the Jones administration provided to the council on the revenue anticipated to be generated by the entire deal.

City records indicate the school system has gained $100,000 a year in separate annual payments for three years from the nonprofit Bon Secours Health System, the city’s main partner in the creation of the training camp on West Leigh Street.

One big reason the revenues have fallen short, Mr. Agelasto noted, is that major elements of the deal have yet to materialize.

Notably, Bon Secours has yet to invest $24 million to redevelop the Westhampton School, former home of Richmond Community High School, into a college of nursing and imaging school.

Separately, Bon Secours has yet to build an $8.5 million medical office building associated with its Richmond Community Hospital in the East End.

The bottom line: Bon Secours is paying far less in property tax on those properties than the Jones administration projected four years ago, Mr. Agelasto said.

The projections indicated that those properties would generate $433,575 a year beginning in the 2014-15 fiscal year based on the new construction. Based on the records of the city assessor, Bon Secours has paid about $100,000 a year in property tax on the Westhampton property and the East End property set aside for development.

Based on the current status of those projects, according to the administration, Bon Secours is still seeking required permits and approvals for the two developments and has yet to set a start date for construction. The result is that the property tax collections on those properties are unlikely to reach the $433,575 level in the current fiscal year, Mr. Agelasto said.

A first-term council member who started in 2013 after the training camp deal was approved, Mr. Agelasto said he has been trying for 18 months to get the administration to provide information on the revenue performance of the training camp deal compared with the 2012 projections.

“I started asking in February 2015” for an update, he said.

So far the administration’s only response has been a power-point presentation that Lee Downey, deputy chief administrative officer for economic and community development, provided to the council’s Finance Committee on July 21.

The presentation defended the project, but to the disappointment of Mr. Agelasto and the other committee members, Chair Kathy C. Graziano, 4th District, and Ellen F. Robertson, 6th District, it provided no update on the 2012 financial projections.

Mr. Downey noted that Bon Secours has met its agreement to pay $3.3 million for naming rights on the training camp facility and has expanded the space that it leases in the building for the services it offers there, including an exercise program, sports medicine, men’s health and primary care services in which 27 doctors and other staff now work.

The lease payments go to the city’s Economic Development Authority, which uses them to pay the city $500,000 a year, Mr. Downey said. The city uses the money to pay off the $10 million that it provided to the EDA to build the training camp building and fields.

He also noted that the EDA spent $1 million of its own money on improvements to the training facility above the city’s investment and that the EDA leased the fields for 75 festivals, events and programs in the past year.

He also said the EDA is on the hook to pay the Washington team $500,000 a year to hold its training camp in Richmond, with the money coming from corporate sponsorships, leases and in-kind services.

“The money does not come from the city’s general fund,” he said.

So far, the EDA has made two payments totaling $646,232, he said, with the remainder credited to in-kind services. However, he provided no detailed information on the EDA’s income and expenses.

He also did not provide any information on the amount of tax revenue that the city receives as a result of the Washington team’s use of the facility, including visitor spending on hotels, meals and other items. Four years ago, the city was supposed to gain $195,000 a year in tax from visitor spending, which was to go to schools. At this point, there is no evidence the training camp has ever generated that level of new revenue.

As to the other potential projects, Mr. Downey said that Bon Secours has made repairs to the Westhampton building and is expected to file a special use permit next month to clear the way for development. Still, he offered no timetable for the start of construction.

In the East End, he noted that Bon Secours has pending rezoning and building permit applications for the office building, though he could not say when construction would begin.

However, he noted Bon Secours has started building a $1.5 million wellness and community center on Nine Mile Road called the Parsley’s Center. He also noted that Bon Secours has provided $150,000 to assist 14 businesses to open along the Nine Mile Road and 25th Street corridor, invested $550,000 to build and renovate a block of homes near Nine Mile Road and helped create a children’s playground.

That information did not impress the committee, which called on Mr. Downey to return as soon as possible with more detailed financial information on the income the training camp deal has generated.