VCU President Michael Rao
by Peter Galuszka
There’s long been the “Virginia Way” of ruling oligarchs making decisions in backrooms while leaving the public out of the picture. But then there’s also the “Richmond Way,” which is the same thing on steroids.
The key focus today is the so-called Navy Hill District Corporation, a group headed by Dominion Energy chieftain Tom Farrell that wants to replace the aging Richmond Coliseum and build a $1.4 billion mixed-use project on 10 blocks just north of Broad Street downtown.
With Richmond Mayor Levar Stoney complicit, the group which involves some of the city’s biggest movers and shakers has worked mostly in secret and has gone to great lengths to keep the public as far away from planning as possible.
Richmond has had its share of flops when it gets into top-down, centralized economic planning somewhat reminiscent of Moscow, where I used to live and work. One was the 6th Street market, a failed project not far from Navy Hill. The city, which has a poverty rate of about 25%, is paying millions to the Washington Redskins, one of the richest firms in the National Football League, to train at a city facility for three weeks every summer.
Navy Hill also had an inauspicious start. When the city sent out requests for proposals for replacing the Coliseum a few years ago, it got exactly one proposal – from Farrell’s group.
They retreated behind closed doors and eventually came out with a revised plan, it had a Hyatt Regency Hotel, mixed-use apartments and retail and restaurants.
It would be funded through instruments called Tax Incremental Financing. Founded in California in 1952, TIFs use future revenues from a project to help pay it off. According to Richmond analyst Richard Meagher, project developers and a city create a “district” and freeze the tax rates on the property there. And increase in valuation goes into a TIF fund that would pay off debt.
A curious situation developed early on in the project when the TIF district was expanded from 10 blocks to 80 blocks to include Dominion’s shiny new headquarters tower. It plans on building a similar building next door.
The city and Navy Hill have stonewalled much discussion on their progress and have provided few details. Proponents have throttled a proposed referendum on the project.
All the while, the city and Navy Hill have been busy skirmishing to battle back meddlesome interlopers, journalists and activists who want to know more about what is going on.
Style Weekly and Paul Goldman, a political activist who once headed the state Democratic Party, tried the Freedom of Information Act and failed, at least initially. When the city did respond to Goldman’s FOIA requests, it billed him $2,018.20, which he fought in court. When the Richmond Times Dispatch sought similar documents under the FOIA, it was billed only $269. (I guess that was the “friend” rate.)
The most recent display of sleazy maneuvering just came out of a few days ago, Richmond political author Jeff Thomas and Virginia Public Media (VPM which formerly was the WCVE public broadcasting group) were curious about some fawning op-eds praising the project in the Times-Dispatch. One was apparently written by Michael Rao, president of Virginia Commonwealth University. Another one was supposedly co-written by the two presidents of Virginia Union University and Virginia State University.
The FOIA yield was revealing. It turned out that in the Rao case, the story idea was hatched by a public relations official in the employ of Navy Hill. He contacted a top public relations official at VCU who eagerly cooperated. After some email back-and-forth, the opinion piece titled “Navy Hill Would be Transformative for All” was published in the newspaper under Rao’s byline. The other op-ed came out in similar fashion.
When asked about the oddity, RTD Executive Editor Paige Mudd said that the newspaper would not have published Rao’s column if the paper had known that he didn’t write it. The RTD apparently had requested emails regarding the formation of the op-ed under the Freedom of Information Act, but did not pursue the matter.
It’s not the first time in the state when a public relations unit of a major real estate developer vetted a supposedly independent op-ed written by a prominent academic.
Professor Steve Fuller, a prominent regional economist at George Mason University, recently wrote a laudatory op-ed about Amazon’s huge new headquarters project in Northern Virginia. The piece was reviewed by Amazon and then was published in a regional business newspaper, according to The Washington Post.
Opponents of the Navy Hill project note that it is wrong for the city to muscle its way into the Navy Hill project when there are so many pressing problems such as fixing up and improving the city’s public school system.
Under the TIF scheme, tax money from the project won’t go directly to meet the city’s needs. One could argue that meals and sales tax funds could boost schools, but if the project is so economically viable, why does it need TIFs?
Meagher notes on his blog that one big problem with TIFs is if they put up the scheme and the development doesn’t happen. He says the city claims it has $900 million in commitments from developers, but then again, who are they, what will they build and where? He cites other possible snags for the financial scheme, which somehow hasn’t gotten much attention or debate from Richmond’s ruling elite.
One odd thing about Richmond is that it is undergoing a renaissance, led mostly by Millennials who have done it the old-fashioned, sweat of the brow way. A lot of the new art galleries and related restaurants, for instance, had their origins in the “First Friday” street fests along Broad Street.
These sprang up organically simply because artists thought it was a cool thing to do. They did not need big, complicated public finance schemes, secret meetings, a non-forthcoming mayor, phony editorials by college presidents or Tom Farrell.
