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eandslee

New Richmond Arena

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6 hours ago, rjp212 said:

I guess this could go in a few forums, but CoStar has announced to anchor the new 400,000 sf tower adjacent to the Arena.  Plans to double the workforce to 2000.  Huge news!

https://richmondbizsense.com/2020/01/13/breaking-news-costar-in-talks-for-new-office-tower-within-navy-hill-development/

I go out of town for the day and come back to this. Guess I should leave more often.  Well,  this shows some real intent, hope it's a nice sweetener to get this moving.  Also, I hope, and don't even want to say this, if the arena doesn't happen, this should still take place somewhere is my hope.  I looked at the tidewater section and they are also fired up with hope,  but for a different reason, the arena for that location has been reactivated by merging efforts between all localities, not just Va. Beach on it's own.   It's a race for a coliseum, though I think we're further along now. 

https://www.pilotonline.com/government/local/vp-nw-norfolk-regional-arena-20200111-myd3rhglxzagph3siyyc4k2sry-story.html

Edited by Hike
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1 hour ago, Hike said:

I go out of town for the day and come back to this. Guess I should leave more often.  Well,  this shows some real intent, hope it's a nice sweetener to get this moving.  Also, I hope, and don't even want to say this, if the arena doesn't happen, this should still take place somewhere is my hope.  I looked at the tidewater section and they are also fired up with hope,  but for a different reason, the arena for that location has been reactivated by merging efforts between all localities, not just Va. Beach on it's own.   It's a race for a coliseum, though I think we're further along now. 

https://www.pilotonline.com/government/local/vp-nw-norfolk-regional-arena-20200111-myd3rhglxzagph3siyyc4k2sry-story.html

Of course the Hampton Roads area would do this...they can’t be out-done by Richmond!  Richmond and the Hampton Roads area constantly compete against one another. On one hand it seems healthy, but in the other hand the efforts of of both to out-do the other ends up nulifiying the intented results.  The two airports do the same (although Richmond, sort of has the slight upper hand with more passengers per year, ORF has better destinations to include those to the west coast). However, because both locations has to have what the other has, neither region can supreme over the other.  As for the arena battle, the competition is going to hurt both arenas and don’t forget JPJ Arena (i.e., when a performer comes through Virginia, where are they going to choose to do their show: Richmond, Norfolk, or even Charlottesville?) - the state will be completely saturated with arenas.  I don’t see this as a good thing at all.  Not sure if all three arenas would be able to be sustained. I just don’t have a good feeling about it...at all. 

Edited by eandslee
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35 minutes ago, eandslee said:

  As for the arena battle, the competition is going to hurt both arenas and don’t forget JPJ Arena (i.e., when a performer comes through Virginia, where are they going to choose to do their show: Richmond, Norfolk, or even Charlottesville?) - the state will be completely saturated with arenas.  I don’t see this as a good thing at all.  Not sure if all three arenas would be able to be sustained. I just don’t have a good feeling about it...at all. 

Good point and wish you were wrong,  but I agree, saturated is not good. Also, one more reason to get this done,  be first and let their project ask the question, does there need to be another new large arena. 

Edited by Hike

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41 minutes ago, eandslee said:

If you haven’t seen this video already, please watch it. Very good.  At the very end, the CEO of CoStar said that the design of their new tower will not likely look like the one in the generic rendering. He said that it will be taller and the architecture of it is still in development.  Finally, I love the very last thing that the Mayor says... something to the effect of him envisioning CoStar’s tower tall enough for those traveling through Richmond on I-64 with the CoStar marquee on it serving as a beacon and a message for all, that Richmond is the place to be to invest in for your company. 

Loved that part!

https://www.nbc12.com/2020/01/13/co-star-plans-move-into-navy-hill-development-add-new-jobs/

It's getting closer,  a role out of excitement as the deadline approaches for a vote,  not a bad idea, whether choreographed or not,  has this affect. Also, liked when the Costar CEO was talking about sustainability, LEED buildings, his LEED home,  and Tom Ferrell of Dominion, listening over his shoulder and a bit of a smirk, probably coincidence but was funny to me, the irony of the 2 juxtaposed there. 

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2 hours ago, Brent114 said:

Thanks for those comparisons!  Very helpful.

 

Costar has under 200k sf today in Richmond and balance of the building is WestRock. Off the top of my head their existing building is about 300k sf. This would be a major consolidation/expansion to Richmond doubling footprint and employment. Current building couldn’t accommodate even if WestRock left. 
 

I think this coupled with the hotel and VCU commitments and state tax contribution (significantly shrinking the TIF District) and additional affordable housing component all align to make this project almost inevitable. 

Edited by wrldcoupe4
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Just now, eandslee said:

If you haven’t seen this video already, please watch it. Very good.  At the very end, the CEO of CoStar said that the design of their new tower will not likely look like the one in the generic rendering. He said that it will be taller and the architecture of it is still in development.  Finally, I love the very last thing that the Mayor says... something to the effect of him envisioning CoStar’s tower tall enough for those traveling through Richmond on I-64 with the CoStar marquee on it serving as a beacon and a message for all, that Richmond is the place to be to invest in for your company. 

Loved that part!

https://www.nbc12.com/2020/01/13/co-star-plans-move-into-navy-hill-development-add-new-jobs/

Please, please don't be another bland 20-story box/rectangle... 

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Maybe won’t be a bland box, but I Bet the footprint is 25k sf at least, so say 16 floors occupied plus ground floor and parking. 

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So, the council has a task ahead of them now and will be hard for them to say no, at least we hope so anyway.

Saying no to this project would essentially be saying no to commitments and entities that want to build here, would they turn down these large scale projects in any other situation?

VCU 

CoStar

Hotel

Housing - which, as we see, flies off the shelf.  

Dominion Tower II

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CoStar, Dominion and VCU continue without Navy Hill.

Navy Hill wasn’t a factor when CoStar moved here, it isn’t really one now.  Of course they want a fresh building  paid for by the city but their expansion here really isn’t tied to it.  It really isn’t. 

CoStar wanting to move into the new development is good for Navy Hill but doesn't change much for Richmond (the additional jobs would move here anyway). It creates even more vacant office space at the river.  The river/canal walk  is also a priority for the city, and it moves CoStar’s tax base into the TIF (so even the new business won’t directly contribute to Richmond’s coffers).  It is still just moving around existing resources (Navy Hill’s gain comes at the expense of the CBD which is struggling to fill office and retail space as it is).  Moving 1-2k employees out of the area  negativity effects a more important chunk of real estate  and it takes even more taxes out of the general fund (just when the GA may step in to offset some of the city’s losses). 
 

The vote is just as complicated today as it was last week.  

Edited by Brent114

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7 minutes ago, Brent114 said:

The vote is just as complicated today as it was last week.  

sorry, only positive vibes allowed.  

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I’m positive that regardless of how the vote goes, Richmond will be an even better city 5 years from now.   There’s enough organic growth all over the city.  Navy Hill becomes more inconsequential every month. :) 

Edited by Brent114

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21 minutes ago, Brent114 said:

The river/canal walk  is also a priority for the city, and it moves CoStar’s tax base into the TIF (so even the new business won’t directly contribute to Richmond’s coffers).

My understanding of the TIF is to earmark the real estate taxes collected for the properties in the TIF.  The tax assessment for the WestRock building wouldn't reduce if it lost Costar as a tenant, so that shouldn't affect the city coffer's bottom line.  The real estate taxes for new Costar building would obviously go to pay back the city's bonds for the arena (until those are paid in full), but that would be additional (i.e. new) taxes on a previously untaxed parcel - essentially creating something where there is now nothing - and the city would continue to collect the same taxes it's been collecting on Costar's previous home.  Then, of course, you have the additional taxes the additional Costar positions would bring to the City such as sales tax, personal property tax, etc. etc.

Am I understanding the idea of the TIF incorrectly?

Edited by benstyree
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No you aren’t.  But vacancies do effect property values. 


 The additional employees will be here with or without the new building.   We’re talking about an additional 1000 employees over the next 5-10 years.   That’s just normal growth.  CoStar didn’t move here to be near an arena.  They moved here because it’s cheaper to do business in Richmond than in Washington. 

If the GA measure passes, state sales taxes collected in the TIF would go towards servicing the bonds.  CoStar moves the taxes generated near their current location (at the Starbucks, Pot Belly etc) into a zone where those taxes go to paying off their new  building instead of to the state (which  then doles $$ out to the city). 
 

The city gets no new tax money  from the CoStar building for 30 years and looses a good tenant, and 1-2k employees, in its central business district.   The state doesn’t collect sales tax revenue on those employees having coffee and meals within the TIF.
 

This CoStar news certainly sweetens the Navy Hill pot but cannibalizing other parts of downtown isn’t a clear win for council members.   It’s still complicated. 

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Then there’s Kanawha Plaza....the city will be paying off millions in renovation costs over the next few decades.  CoStar moving their employees away from the plaza doesn’t help build synergy (the Dominion gains will be offset by the CoStar loss).  
 

I want new jobs.  I’d be on board if Carmax or Phillip Morris wanted to build a new headquarters downtown. That would be an easy vote for city council.  New people into the city is a winning proposition.  Shuffling existing employees around isn’t. 

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38 minutes ago, Brent114 said:

No you aren’t.  But vacancies do effect property values. 


 The additional employees will be here with or without the new building.   We’re talking about an additional 1000 employees over the next 5-10 years.   That’s just normal growth.  CoStar didn’t move here to be near an arena.  They moved here because it’s cheaper to do business in Richmond than in Washington. 

If the GA measure passes, state sales taxes collected in the TIF would go towards servicing the bonds.  CoStar moves the taxes generated near their current location (at the Starbucks, Pot Belly etc) into a zone where those taxes go to paying off their new  building instead of to the state (which  then doles $$ out to the city). 
 

The city gets no new tax money  from the CoStar building for 30 years and looses a good tenant, and 1-2k employees, in its central business district.   The state doesn’t collect sales tax revenue on those employees having coffee and meals within the TIF.
 

This CoStar news certainly sweetens the Navy Hill pot but cannibalizing other parts of downtown isn’t a clear win for council members.   It’s still complicated. 

But once again, the projected CoStar growth is 33% greater than the capacity of the current building, and that is assuming they kick WestRock out.  They will either have to spread their growth among  multiple buildings, which could include the suburbs or another region entirely (they have offices all over) or build a new building.  Either way, the current building is not seeing this growth and I doubt they can find 400k SqFt of vacancy in one tower within James Center or SunTrust tower (biggest vacancies I am aware of).  Now, it would be possible that they could build a smaller building  (200k or so) on the current complex but that may lead to under-utilizing the site.

Edited by Icetera

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17 minutes ago, RiverYuppy said:

I just don't get where stuff like this comes from.  The city isn't paying for the building.  The fact that you think that or have read that just boggles my mind regarding how much disinformation about this project has been put out there. 

The city isn't paying for *ANY* development that will be owned by private developers.  In fact it isn't even paying for all of the development that it will own. 

Great.  CoStar doesn’t need an arena to move forward.  They could break ground on their new, privately financed building whenever they want.   After all, an arena has nothing to do with leasing commercial property!
 

The publicly financed arena has always been the sticking point.  If the project is viable without it, just build without the city getting involved.  If the developers are telling g you that housing and office space won’t work without a huge, publicly financed arena, then the project isn’t viable and should be scrapped.   They want to roll the debt on the land (those parking garages and lots are millions in the hole) into the arena budget so that they can build on a free lot. 
 

I’m sure CoStar can find a lot ready to go downtown today.  When are they going to break ground?  

Edited by Brent114

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3 hours ago, RiverYuppy said:

I just don't get where stuff like this comes from.  The city isn't paying for the building.  The fact that you think that or have read that just boggles my mind regarding how much disinformation about this project has been put out there. 

The city isn't paying for *ANY* development that will be owned by private developers.  In fact it isn't even paying for all of the development that it will own. 

You cannot make this argument. The arena subsidy is what carries the entire development — Navy Hill developers say this, Mayor Stoney says this, and now they’ve suckered CoStar into saying it, among others. The term they love to throw around is “Navy Hill or nothing”. Without the arena subsidy, nothing happens.

Now I don’t truly believe that at all - their rhetoric is just verbal ‘rhea, political gamesmanship, and flat out lies. It’s very clear a lot of this COULD happen without it.

I’d be curious to know if any of them are actually tallying the quoted “9,000 permanent jobs” Navy Hill is projected to generate. Is CoStar’s planned 2,000 jobs part of the 9,000? Because 1,000 are already here. I bet you wouldn’t get a straight, consistent, concise answer from any of them on that question. 

Edited by vaceltic

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“COULD” - there is no way on earth Costar would relocate to this neighborhood without the overall Navy Hill project.
 

There are always going to be people that are against the arena financing component and that’s Okay. 

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12 hours ago, vdogg said:

There are metro areas HR’s size that have 2 or 3 arenas of that magnitude. 2 arenas that size in the entire state aren’t going to hurt anyone. The fact is, major acts are passing the entire state by due to lack of appropriate venues. Something in the Water sold out with 35,000 tickets. EVERY hotel room in the metro was booked. The demand is there, and can easily be spread across 2 arenas between here and Richmond. There really is no direct competition. Our events will get a lot of people from NC, your events will get a lot of people from NoVa and DC. Both venues will do well.

Thanks for the positive spin on this and yes, the region can have more than one and do well, I assume, and it's unrealistic to assume that HR wouldn't have a competitive arena.  Being selfish, I can't find a scenario where having 2 arenas divide potential incoming acts is better than just 1 option though.  Our history with this scenario is that RVA was typically passed over with big  musical acts, large scale events, they'd go to DC and then if they want to be in VA, would it happen here or go to HR?  It is different now, Richmond is a hot market, that means something, so we'll have to wait and see.  

Edited by Hike
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