Richmond has agreed to sell the dilapidated Public Safety Building at 510 N. 10th St. for $3.5 million.
The pending sale of the city-owned property sets the stage for a $325 million redevelopment Capital City Partners LLC pitched last spring after the Richmond City Council rejected the $1.5 billion Navy Hill plan.
The redevelopment project will include office space for VCU Health, new facilities for The Doorways and Ronald McDonald House Charities, a child care center, ground-level retail and speculative office space.
If approved by City Council, which will consider ordinances for the sale later this month, the redeveloped property would generate $55.9 million in local real estate tax revenue over the next 25 years, city officials said.
“Redeveloping the old Public Safety Building will generate much needed tax revenue for affordable housing, schools and our neighborhoods while creating opportunities for minority businesses,” said Mayor Levar Stoney.
As part of the negotiated agreement the city announced Monday, Capital City Partners would be responsible for the demolition of the Public Safety Building to make way for the new development. Tentative plans also call for reconnecting East Clay Street between 9th and 10th Streets.
Additional terms negotiated by the city include 40% participation by minority-owned businesses; childcare slots for Richmond families not affiliated with VCU or its health system; and the creation of a $500,000 fund to support small business leasing space in the development, organizations that support small business and scholarships for Richmond Public Schools graduates who live in public housing to attend a trade/technical school, community college, or college or university to pursue a post-secondary credential.
Capital City Partners, the development firm behind the Navy Hill plan, submitted an unsolicited $3.17 million proposal in May centering on the Public Safety Building. The council facilitated further negotiation a month later by voting to designate the building as surplus property.
The 66-year-old building is near the shuttered Richmond Coliseum that the developers hoped to overhaul and make the anchor of their previous plan, which called for 2,000 apartments and condominiums; a high-rise hotel; 1 million square feet of commercial and office space; 260,000 square feet of retail and restaurant space; and a renovation of the historic Blues Armory.
An advisory commission the City Council formed in 2018 to review the Navy Hill proposal recommended selling the property even if the legislative body rejected the ill-fated redevelopment scheme, said Leonard Sledge, the city’s director of economic development.
Henrico County in December announced plans for a massive $2.3 billion development that includes a 17,000-seat arena off of East Parham Road and Interstate 95.
Stoney has said it’s unlikely that the region can support two arenas of that size, putting pressure on the city to find a new anchor for future redevelopment. The city has yet to say what it plans to do with the coliseum.
Sledge said the sale and redevelopment of the Public Safety Building aligns with the city’s goals to reduce poverty, create jobs and increase funding for public education.
“There’s no public funding whatsoever in this project,” he said in a presentation to the City Council on Monday
The 3-acre property and building has an assessed value of $15.4 million.
Sledge said the negotiated $3.5 million sale price, based on a separate appraisal and the developer’s anticipated expenses for demolition and public infrastructure improvements, is still a good deal for the city.
The city estimates that needed repairs and maintenance to the building, which generates no tax revenue and costs about $390,000 annually to maintain, would cost approximately $21 million. Plans to relocate city offices currently located there are being finalized.
The demolition of the building will require GRTC to relocate its temporary bus transfer plaza that’s been located along Ninth Street since 2014.
In anticipation of the sale, GRTC and city officials have discussed moving it to a new temporary location in a portion of the parking lot along Clay and 8th Streets.
The plaza sees about 11,000 people come off and on buses each day, making it the busiest transfer location in the city. Bus stops at Broad and 4th Streets are the second busiest transfer zone, with about 6,300 trips each day, according to information from the transit company.
GRTC spokeswoman Carrie Rose Pace said Monday evening that it is still discussing the move with city officials.
A permanent transfer plaza was included in the Navy Hill plans. City and GRTC officials recently restarted discussions about plans for a permanent site.