Richmond Coliseum redux
12/13/2018, 6 a.m.
The more we learn about the proposed Coliseum development in Downtown, the more we don’t like it.
We are skeptical about the figures and arguments trotted out to convince City Council and Richmond residents to support the $1.4 billion plan. And we question the assumptions used by project proponents, led by Dominion Energy CEO Thomas F. “Tom” Farrell II, and backed by Mayor Levar M. Stoney, in claiming it will be a success.
For example, project backers claim Richmond needs a new 17,500-seat coliseum to attract major acts and to stop the current 47-year-old arena’s yearly $1 million drain on taxpayers.
But as Free Press staff writer Jeremy M. Lazarus reported in the Nov. 29-Dec. 1 edition, a study by the city’s consultants, Hunden Strategic Partners, found that the Richmond Coliseum averaged more events per year than Virginia’s four other indoor arenas combined from 2013 to 2018. The Coliseum also hosted more events than larger arenas in Greensboro and Raleigh, N.C.
So why does Richmond need a new Coliseum? Why wouldn’t a less expensive renovation or makeover be adequate, particularly in this time of tight money? Why tear it down and start over?
When it comes to the Coliseum plan, proponents claim the development of a new arena, a new convention center hotel, office buildings, restaurants, 2,500 new housing units and renovation of the Blues Armory into a food market and entertainment venue will create thousands of construction jobs, 9,000 permanent jobs after construction and generate $1.7 billion in new tax revenue for the city.
We remind our readers that these are only projections with flimsy underpinnings by consultants and others hired to make the project look appealing. What if the project doesn’t proceed at a pace expected? What if inflation and costs are higher than anticipated? What if the economy isn’t as robust as what these numbers are based on? Will the resulting jobs and tax revenue be as rosy as proponents state?
Richmonders are experiencing firsthand what happens when a project is oversold. Just look at the bill of goods sold to the City Council and Richmond residents with the Washington NFL team training camp on West Leigh Street. Earlier this year, city taxpayers learned that we are stuck with an $11.25 million bill to pay off the debt on the 6-year-old building over 15 years. Why? Because the training camp, including the building that is partially occupied by Bon Secours medical offices, is failing to generate enough revenue to pay for operations and to pay off the $8.85 million the city advanced in 2012 to develop it.
Imagine what could happen with the $1.4 billion Coliseum development despite all the promises and glowing projections. Outsiders examining the stated numbers say the project will generate an average of only $9.4 million in new tax revenue annually over 30 years for the city, not the average of $40 million a year that the mayor has touted. That’s a major discrepancy.
Unfortunately, proponents also are using certain African-American community leaders, including Virginia Union University President Hakim J. Lucas, Virginia State University President Makola M. Abdullah and Richmond NAACP President James “J.J.” Minor III, to parrot the arguments they have put forward — that private financing will be used for the development; that the developers will receive no special tax breaks or incentives; that private investors will take the hit if something goes wrong; that the project is committed to investing $300 million with minority-owned businesses; and that the project will contain 680 units of affordable housing.