Richmond Mayor Levar Stoney’s administration has paid outside consultants and lawyers close to $500,000 since January to vet the $1.4 billion proposal centering on a new downtown arena.
The Stoney administration has spent about $481,000 scrutinizing the lone pitch it received to replace the Richmond Coliseum and redevelop a 10-block swath of prime real estate north of Broad Street, according to monthly invoices through August that the Richmond Times-Dispatch obtained through a Freedom of Information Act request.
Members of the Richmond City Council said Monday that the administration had not told them of the climbing costs associated with what Stoney has called his “unprecedented due diligence” on the plans.
The highest amount — $225,586 — has been paid to Davenport & Co., a Richmond firm that serves as the Stoney administration’s financial adviser. The city has relied extensively on Davenport in its review of the plans and throughout negotiations despite several top City Hall administrators dedicating significant time to the project. The total does not account for time city employees have dedicated to the project to date.
In addition to Davenport, the city has also paid two outside law firms to assist in its review and negotiations. Faegre Baker Daniels has billed the city for about $173,000 since the beginning of the year. Hirschler Fleischer, a local law firm, has billed the city for about $23,000 since March.
The city incurred the cost of reviewing the proposal it received from NH District Corp., a coalition of corporate leaders headed by Dominion CEO Thomas F. Farrell II that formed a nonprofit to submit its plans to the city.
The NH District Corp. proposal calls for a $220 million, 17,500-seat arena; 2,800 apartments and condominiums; a 527-room hotel; 176,000 square feet of commercial space for retail and restaurants; a $10 million rehabilitation of the historic Blues Armory; the construction of a new GRTC transfer plaza for bus riders; a Virginia Commonwealth University medical office building; and other infrastructure improvements.
The Stoney administration announced it was entering formal negotiations with the group in June. Invoices show some of the hours billed to the city predate NH submitting its proposal in February.
A majority of Richmond City Council members polled Monday said the figure was news to them. The spending drew a rebuke from some on the nine-member body.
“How much?” said Kimberly Gray, the 2nd District councilwoman. “I can’t wrap my mind around half a million dollars for studying a Coliseum deal that we haven’t even had a public conversation about as council,” Gray said.
In a written statement from Finance Director John Wack, the administration de-emphasized the spending. The $481,000 it paid to consultants for assistance in its review amounted to “about .03 percent” of the investment NH District Corp. had proposed, Wack said.
Gray cast the spending in different terms.
“$480,000 would have gone a very long way toward bathrooms in RPS,” she said.
“To ensure a thorough and meticulous vetting of all of the facets of this complex proposal and protect the city’s interests, we have utilized the variety of skills and expertise of city staff and outside consultants,” Wack said.
The money will not affect the city budget that took effect July 1, he said. The sum was paid with money budgeted last year under a $605,000 line item in the Department of Finance’s budget listed as “financial and investment management services,” Wack said. The spending was also offset by a $50,000 fee the private group submitted with its proposal, required under the city request for proposals, Wack said.
Council President Chris Hilbert said a Times-Dispatch inquiry was the first he had heard of the costs.
“That seems like a lot of money,” Hilbert said. “[The proposal] is not before us yet. We need to be prudent with the taxpayers’ money.”
The council president is among a bloc of council members that has weighed whether the council should commission a separate review of the proposal if Stoney ultimately submits the plans for consideration.
Costs associated with the administration’s review will climb.
The invoices do not reflect the full amount — $113,000 — the Stoney administration has agreed to pay Chicago-based Hunden Strategic Partners. At the mayor’s insistence, the city hired the firm over the summer to conduct an economic impact analysis of NH District Corp.’s plans.
Hunden was supposed to produce a report with its findings by the end of August. As of last Thursday, the city still had not received it.
Others on the council said the scope of the proposal demands thorough vetting, which comes at a price.
“If it’s a billion-dollar deal, I think you’d want to make sure everything has been thoroughly looked at,” said 5th District Councilman Parker Agelasto.
In a release last week, Stoney said negotiations with NH District Corp. were progressing. The two sides had “reached consensus” on key priorities, such as the number of affordable housing units included in the plans and the percentage of spending that will be earmarked for minority-owned firms.
Said Stoney, “While this is not a done deal, I’m optimistic our negotiations will continue to be productive.”