by James A. Bacon

The City of Richmond’s proposal to build a baseball stadium and slavery museum in Shockoe Bottom is fast becoming a case study in the perils of mixing politics and urban development. Suddenly, Mayor Dwight Jones, once widely regarded as squeaky clean, has become embroiled in secretive dealings and potential conflicts of interest.

Eight days ago, the mayor cut a deal with a skeptical City Council to restore most of the funding for the $80 million re-development plan. But the revised plans issued by the Mayor’s Office left many details unclear. As Times-Dispatch reporter Graham Moomaw wrote last week, “City officials had projected spending $4.4 million for land acquisition, but the tangle of transactions makes it difficult to determine what the actual cost would be.”

One of the buildings that might be acquired in the deal just happens to be the headquarters building for the Democratic Party of Virginia… of which Jones just happens to be chairman this year. It transpires that the DPV is $600,000 in debt and that the building, purchased for $1.15 million in 2008, is in poor condition and non handicapped-accessible. Also, staff is less than happy about neighborhood safety and the scarcity of parking.

Democratic Party officials penned a letter last month formally severing Jones from any decision-making regarding the sale of the building to the city. “This letter confirms that you will not be involved in any approvals regarding the proposed sale of the Democratic Party of Virginia’s office building,” stated a letter signed by DPV senior staff. “Necessary steps will be taken to recuse you from such decisions or approvals.” (So reports the indefatigable Moomaw.)

While the letter insulates Jones from concerns that he might use his dual positions to benefit the City of Richmond at the expense of the DPV, it does nothing to alleviate concerns that he might use his position to benefit the DPV at the expense of the City of Richmond. Little birds whispering in my ear have raised the prospect that the city might pay more than DPV property is assessed for, thus helping to bail the party out of its financial predicament. As of yet, City Hall has made no move to sever Jones from any decisions regarding the acquisition of property.

Meanwhile, other issues have surfaced. Columnist-activist-gadfly Paul Goldman unearthed a clause in the “Stadium South Memorandum of Understanding” specifying a 40% MBE/ESB goal for construction of the project. (MBE = Minority Business Enterprise; ESB = Emerging Small Business).

Also, the document noted that SWA Architects “may be employed to provide A&E services.” SWA Architects is affiliated with the business interests of Lou Salomonsky, owner of real estate in Shockoe Bottom. That would be the same Lou Salomonsky who was sentenced to serve two years in jail in 2003 for trying to bribe a city councilwoman.

Then there’s this from the same document: “With respect to the apartment/residential component of the Project, there shall be a 20 percent MBE/ESB development and ownership of such component.”

Who would that 20% minority owner be? The document does not say. Indeed, it says that the identity shall remain confidential:

The Parties agree that all documents delivered pursuant to his MOU and all subsequent agreements will remain confidential. Except to the extent compelled pursuant to subpoena, summons order or other judicial process, no Party shall disclose such confidential information, without the consent of the other Party.

What the —-?! There is no way the City of Richmond can move forward on this negotiated deal without laying bare all terms and conditions and revealing the identities of all participants. The potential for self-dealing is just too apparent. If Jones entertains any ambitions for statewide office, as he is reputed to, he needs to clean up this mess right now.

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11 responses to “Fishy Business in Richmond”

  1. larryg Avatar

    Richmond needs to consult with VDOT on the “proper” way to configure a P3 project.

  2. JohnS Avatar

    Uh oh- corrupt Democrats in distress… better call Uncle Terry to the rescue!

  3. larryg Avatar

    It’s beyond belief to me given the school needs in Richmond that these folks are riding this horse…

    but wait, WAIT – only Dems do this kind of stuff?

    holy bat crap.. no GOP ever does this?

    CAll the LAW!

    jeeze louise

  4. Peter Galuszka Avatar
    Peter Galuszka

    Despite Mr. Bacon’s insistence that Bob and Maureen McDonnell have no spoking gun and did nothing wrong — U.S. District Court Judge James Spencer (Reagan appointee no less) said there’s enough to go ahead with a corruption trial.
    He also refused the “throw Maureen under the bus” strategy so she could offer exculpatory testimony to get Bob off the hook (hubby didn’t know kind of thing).
    That said, there is that pesky little problem of not disclosing those little loans from Uncle Jonnie on federal bank loan applications.
    It’s like global warming — ain’t no corruption either.
    Must say that the Shockoe Bottom deal gets stranger and stranger but who’s really behind that? Besides the one Bottom developer who got in trouble some years ago, it appears that the entire Richmond business elite with Venture Richmond as a front is for it all.

  5. billsblots Avatar

    My God Richmond really is becoming old-school Detroit. Does the Mayor have his version of Kwame Kilpatrick’s Bobby Ferguson?

    “Evidence at trial showed Kilpatrick often went to bat for his buddy and punished contractors who didn’t make room for Ferguson on excavation projects. Prosecutors said $73 million of Ferguson’s $127 million in revenue from city work came through extortion.”

  6. spencer114 Avatar

    The deal is no more and no less “fishy” than any development deal involving so many people, developers and properties. It is no surprise to me (it shouldn’t be to anyone) that elected officials have connections in the communities that they represent.

    Those opposed to this deal are just grasping to find things that appear (but in the scheme of things aren’t) fishy. This deal was done years ago. The back and forth in the press now is just the dog and pony show for the public.

    1. larryg Avatar

      just FYI – Fredericksburg is in the process of trying to get the Hagerstown Suns to move to Fredericksburg and the city is involved with the effort.

      the supporters are singing a familiar tune to the Richmond issue.

      Spotsylvania County – just recently approved a NASCAR minor league racetrack to move from Prince William county to Spotsylvania and millions of dollars of improvement to an I-95 interchange is necessary and the county is paying for much if not most of it by diverting some of their fund allocations from other projects to this one – because they believe it will bring a lot more business income and business spin-offs to the county.

      (and I suspect they are correct and I do support it).

      but you do have to – at the least – understand that it’s going to take a lot of increased business tax revenue to pay for the 12 million dollar re-do of the interchange …

      I am conflicted by these types of things because it’s hard to really do a valid cost-benefit study about something that has the potential to turn into a bonanza or a flop.

      these are the types of issues that private entrepreneurs face all the time with their own money – it can take a leap of faith – to put money into something knowing it’s not a guarantee and you could lose your money.

      so it’s not surprising that they seek “partners” to spread out the risk and if one of them can be the government – well.. that can be important – because a lack of support from govt can doom a project. Conversely, when the govt chooses to support a project – they too are taking a risk if that business flops anyhow.

      what Va might need is a rule that says that before tax money can be committed to any private venture – state or local – that they must have the proposed venture analyzed by the Virginia State Auditor – using standard industry accounting principles. Perhaps that should also be extended to VDOT’s P3 efforts.

      In other words, there can be no bigger conflict of interest that a city or county or VDOT performing their own economic feasibility study of –

      not their project – the taxpayers project.

      I’d like to see Richmond, Fredericksburg and Spotsylvania required to have an independent analyses done for any economic development project that will in turn be made available to the public.

      Come to think of it – why not require any road proposed by VDOT – the economic development part – be subjected to the same rules.

      see – this is how that nasty additional regulation gets enacted..

      we don’t like regulation but we also don’t like Richmond playing fast and loose with taxpayer money.

      choose your poison but once you do – don’t be a hypocrite about it later on.

  7. JohnS Avatar

    Trying to regulate how these economic development projects are evaluated and decided is a pipe dream. The best we can hope for is a transparent process that allows for public bidding and not cherry-picked contracts handed out by these EDAs in closed door meetings. Basically, the complete opposite of what is happening in Richmond with Shockoe Bottom.

    And Spencer- if it is true that this deal was done years ago then it stinks even more..

    1. larryg Avatar

      I think the State SHOULD REQUIRE – a 3rd party analyses done by an entity approved by the state – or the Auditor of Public accounts.

      Va law REQUIRES each jurisdiction in Va to file every year to deliver to the Va Auditor, a complete accounting of their revenues and expenditures.

      Va law REQUIRES a bidding process for many projects also.

      why not a required process for expending tax money on private projects?

      VDOT certainly seems to need such rules for P3 projects.

  8. JohnS Avatar

    Re: “why not a required process for expending tax money on private projects?”

    I’m not opposed, just don’t think it will ever happen.

    Reporting requirements are one thing, but estimations of cost/benefit with these projects (as you alluded to with the Fredericksburg racetrack) get real tricky. And then you have to factor in the underlying politics..

    1. larryg Avatar

      well.. yes… but it’s not impossible. For instance, my County has 3rd party auditors and bond counsel… to give them an independent analysis.

      but I’ll admit – that when a proposal is made – there are no real guidelines – it’s totally katy-bar-the-door …

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