Second Thoughts on the Shockoe Bottom Baseball Plan

Mayor Jones unveils the Shockoe stadium plan. Image credit:
Mayor Jones unveils the Shockoe stadium plan. Image credit:

by James A. Bacon

I should have known: Mayor Dwight Jones’ plan to build a new baseball stadium in Richmond’s Shockoe Bottom was too good to be true. Two days ago, I posted a generally up-beat appraisal of the proposal on the grounds that it would generate up to $187 million over 20 years while costing the city only $80 million. Now we find out that those numbers come with two very big asterisks. First, the tax revenue forecast assumes that the city successfully re-develops acreage on the Boulevard where the present baseball field is located. And second, the cost estimate doesn’t include interest on the bonds used to finance the project.

Of the $17.7 million in projected annual revenue from the plan, $13.5 million would come from re-developing the Boulevard, reports Graham Moomaw with the Times-Dispatch. The mayor has given no indication that any private interest is waiting in the wings to develop that property, so revenue projections should be regarded as speculative at best. In terms of hard numbers, only $2.1 million would come from baseball revenues, primarily a lease with the Richmond Flying Squirrels, and another $1.9 million from a hotel, grocery store and apartment buildings in Shockoe. 

On the cost side of the equation, the city would pay $79.6 million to build the stadium, invest in public utility infrastructure to prevent flooding, and do some historic preservation associated with Lumpkin’s Jail and the African graveyard. According to Moomaw, the city would pay $5.6 million annually to support the debt payment. Assuming the bonds have a standard, 20-year maturity, that would amount to $112 million — $32 million more than the mayor let on when he made the big announcement.

The numbers apparently also assume that the city incurs no additional expenditure to re-develop the Boulevard tract. (Moomaw makes no mention of such a cost.)  What are the chances of that?

A Davenport & Co. analysis obtained by Moomaw contends that the Mayor’s plan offers the “greatest net benefit” because it both sparks development in Shockoe Bottom and frees up the Boulevard property, near the intersection with Interstate 95, for re-development. Fair enough.

But are those benefits worth the $3.5 million annual impact on cash flow ($5.6 million in bond payments minus $2.1 million in Flying Squirrels lease payments), added strain to the city’s bond-carrying capacity and the risk that re-development of the Boulevard might not pan out as quickly as expected? One must ask, how much tax revenue could the city generate by investing $80 million elsewhere?

This new information raises serious questions. I’m not saying the mayor’s proposal is a bad idea, but I do think it requires serious scrutiny before City Council moves forward with it.

Update: Writing for Style Weekly, Ned Oliver provides details of the development City Hall anticipates for the Boulevard: more than 1,000 apartments, nearly 800,000 square feet of retail, nearly 1 million square feet of office space, a hotel, a medical office and a sports-fitness complex. As Oliver observes dryly: “It’s unclear if the city has secured letters of intent for the Boulevard development as it has for the Shockoe Bottom plan.”

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14 responses to “Second Thoughts on the Shockoe Bottom Baseball Plan”

  1. Peter Galuszka Avatar
    Peter Galuszka

    One wonders what other untold links there might be to make this fly financially.

    I really can’t understand Richmond. The Boulevard is just fine as a baseball spot. Or an island on the James (not possible) or why not put the damned thing in Short Pump.

    Admit we love cars and screw the Smart Growthers!!!!!!!

  2. reed fawell III Avatar
    reed fawell III

    “This new information raises serious questions.”

    I agree totally.

  3. DJRippert Avatar

    Dear Mr. Bacon:

    As it turns out I have acquired the rights to the Robert E Lee Bridge in Richmond, VA. I would like to paint it burgandy and gold and then lease it via a PPP to the City of Richmond. As you may know, I am a very civic minded person and will offer the use of the bridge to the people of Richmond at very low rates. I have experience in bringing attractive deals to Richmond but I am very busy. Would you be interested in representing me in the matter with Mayor Jones and the Richmond City Council?


    Dan Snyder
    Owner – Washington Redskins

  4. Breckinridge Avatar

    Oh, and when they measure and report the revenue gained from the new development in Shockoe Bottom, do they subtract the revenue lost from the landowners and businesses now there who would be replaced. Is that revenue net or gross? The existing businesses are paying something, although admittedly much less.

    Many, many ways to put a thumb on the scale.

    Now if they do have a use for the Boulevard area (and what a nice industrial location it would be) that is a different matter. But right now, why couldn’t a similar mixed use development with a ballpark, multifamily housing, retail, restaurants go there? With better traffic and fewer people displaced?

    Still skeptical.

  5. I’m skeptical too although it’s my understanding that Doug Wilder is prepared to move his proposed Slavery Museum from Fredericksburg to RIchmod.

    I’m still caught between what the private sector will do – in terms of something visionary like this – and what just won’t get done unless govt leads it.

    the best, most vibrant cities in the world – to include NYC seem to have the major involvement of govt . It might be driven by the private sector but it’s envisioned and guided by the govt and to include provisioning of public infrastructure and services such as police.

  6. billkuster Avatar

    Breckinridge, not sure the issue you have about existing businesses. The site plans show the development fitting around the existing businesses with the possible exception of the Exxon Gas station, which others have noted is the only one in the area and could probably easily move and succeed close by. The current location of the potential development is empty, unused parking lots. (I believe city owned).

    Havana 59 and other businesses in the area I would exoect are thrilled with this potential development. (The restaurants in the neighborhood have pro-stadium plan signs in their windows).

    1. Architectural renderings are misleading and aren’t the same as site plans. The city has yet to produce plans, to scale, which show the development footprint and related impacts. The public has a right to know this information.

  7. NewVirginia Avatar

    Is there also a proposal to get Richmond an upgraded baseball team to play in this upgraded baseball stadium?

  8. NewVirginia Avatar

    A serious question – why is Richmond pinning its stadium dreams on a mediocre AA baseball team? Minor league baseball is and always has been a sideshow, not something most people follow seriously. Baseball itself (sorry to offend anyone) has a slight downward trend in terms of popularity.

    If Richmond is going to use valuable real estate in the middle of the city to build a stadium that will serve as a centerpiece, why not consider one of these options:

    A new soccer stadium. The Richmond Kickers are already a popular and successful minor league team that has beaten MLS teams in the U.S. Cup. Soccer’s popularity is growing by leaps and bounds, especially in the mid-atlantic. Build a dedicated, high-quality soccer stadium and start angling for an MLS team. An MLS franchise is financially feasible for a city the size of Richmond and, as the first major league team in the state, could become hugely popular, just as other professional teams in one-sport towns are.

    OR build a football field for a VCU football team. VCU is big enough and right in the middle of a hot recruiting area to have a solid Division I-AA team in only a couple years. There is already a club team and the school has looked at options for taking it varsity. College football could become huge in the city even with limited success and would far outstrip minor league baseball in revenues. It could become a city team in the same way the Gamecocks are Columbia, SC’s and NC State are Raleigh’s.

    OR do both. College football and professional soccer are not 100% complementary stadium users but they come pretty close.

    1. Ok, so the proposed stadium would seat 7500 max it seems – and that doesn’t look like it leaves much room at all.

      IF VCU got a football team (and it became I-AA in a “couple years”), do you really think we could build a large enough stadium in the bottom? Average attendance for Division I-AA was 9,041 (see Robins Stadium has a capacity of 8,700 and and fills up.

      Richmond Kickers average attendance in 2012 was 3,484 and Squirrels average attendance in 2012: 6,257 and 2013: 6,689.

  9. NewVirginia Avatar

    Even a new VCU basketball arena would make more sense…

    1. See my comment above. Siegel Center capacity is 7,600 and the proposed stadium for the bottom is 7,500.

  10. I suspect this is more of a strategy to see if potential private sector players might get interested rather than a soup-to-nuts “plan”.

    even developers start with conceptual renderings… to sell their project “enough” to go to the next step – site plans.

    this thing is totally loosey goosey… if some guy showed up with a pro soccer or hockey team – the “plans” would miraculously morp overnight!

    I cannot blame Richmond – or NoVa or Hampton Roads, Lynchburg, etc for attempting to re-develop and re-energize their locations.

    but it’s sorta like priming the pump using some tax dollars to start the process… but I doubt seriously Richmond has the financial underpinnings to be the primary developer.

    1. There’s always a subtle game of deception with projects like this. I just hope the city fully vets these “plans” before spending a boatload of money on consultants and all that. Otherwise the argument becomes, “we have to build it because we’ve already thrown too much money at it”. Call me cynical? Guilty as charged.

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