First are these questions answered by the City
From: Flynn, Rachel O’Dwyer - DCD [mailto:Rachel.Flynn@Richmondgov.com] Sent: Wednesday, March 18, 2009 12:30 PM
To: Squire, Betty L. - Council Member
Cc: Denslow, Suzette - CMO; Khara, M S. - DPW; Johnson, John R
Subject: Church Hill Questions on the stadium
Betty and John, My answers are in RED below. As a general note, the City
has contracted with Davenport Consulting for their independent financial and
economic assessment of the Ballpark proposal. No further review is being
undertaken until that assessment is complete - which is due in about sixty
(60) days. Let me know if you have further questions. Thanks, Rachel
________________________________
From: Squire, Betty L. - Council Member
Sent: Monday, March 09, 2009 1:27 PM
To: Flynn, Rachel O’Dwyer - DCD
Cc: Khara, M S. - DPW; ‘John.Johnson.ctr@dla.mil’
Mr. Johnson, your email has been forwarded to community Development and
Public Works for answers to your questions.
This email is being forwarded for any input regarding these questions.
Please let me know as soon as you can so that I can get back to Mr. Johnson.
Thank you.
________________________________
1) Has the Virginia Department of Historic Resources been asked their
opinion on the use of historic tax credits for the development as presented?
I would recommend that you contact Kathleen Kilpatrick directly about this
issue. She is the Executive Director at DHR @ 367-2323. What is the effect
on the St. John’s Church Historic District of the development? The
structures on not in the St. John’s Church Historic District - so the City
could not require any CAR action on this development. During staff review
of the final design, we would keep in mind the fact that the development
borders the O&HD on 18th Street.
2) Broad Street between Church Hill and Shockoe Hill is the principal route
taken by ambulances to and from MCV and fire engines to and from Engine 1 at
24th and Broad. Have the appropriate EMT’s been consulted about the impact
of this development on their mobility? It is my understanding that the Fire
Department is reviewing the proposal, but to confirm this I would contact
Chief Robert Creecy at 646-5451
3) As with the development of the Downtown Master Plan, will the City hold
a series of meetings with local parties to disseminate information and
respond to local questions? My understanding is that the developer is
currently going to as many community meetings as possible, as a starting
point. Assuming that the proposal moves forward, I am sure that the Mayor
and City Council will want to seek public input.
4) By what criteria will the City judge noise and noise abatement issues?
The City Code addresses noise control - in Sections 38.31 to 38.60. The
Police Department enforces it. This is an issue that the developer would
have to address in their SUP application - and that staff would review
before making any recommendations about the development.
5) What hydro-engineering studies will the City independently undertake to
assess flood-plain concerns? Hydro-engineering is handled by the Department
of Public Utilities and Bob Steidel is the contact at DPU. His number is
646-8311. Have you considered alternative plans? Bob Steidel is the
contact for this question.
6) What environmental impact study does the City plan to address the
proposed GRTC bus terminal? Both DPU and DCD would review the plans for any
new structures in the 100 year and 500 year flood plains to ensure that GRTC
complies with all local, state, and federal codes.
7) What additional infrastructure costs will be incurred to accommodate the
increase in traffic flows? How much will it cost the City, the state, and
the federal government? M. Khara with DPW is the contact for this question.
I’ve copied him on this e-mail - and his # is 646-5413.
What long term impact studies on the existing local road network has the
City undertaken? M. Khara with DPW is the contact for this question.
9) What public land is being donated to the developers and what is its fair
market value? The City owns the following properties on the site of the
proposed Ballpark: 1) 1615 E. Broad @ $473,000, 2) 1621-1627 E. Broad @
$104,000, 3) 212 N. 18th @ $874,000, 1614 E. Franklin @ $298,000. These
total $1,749,000. In addition, the City owns a parcel of which it appears
the Ballpark development (including a surface parking lot) would occupy
approximately half the parcel. That parcel is identified as 500 E. Main
(but it spans from Main Street to Broad Street) @ $1,933,000. If they used
half, that would equal $966,500. The City is no where near the negotiations
of land donations - so we don’t know right now what, if any, land would be
donated for the project.
These questions were proposed to the developer:
1) Please respond to the following:
• Paul Goldman’s editorial in Style Weekly 1/28/09—Mr. Goldman is entitled to his opinions. His editorial was written before we had the opportunity to review our financing plan with him.
• Tony Pelling’s Letter to the Editor of the Times-Dispatch, 1/30/09—Mr. Pelling is also entitled to his opinion. One man’s “susbidy” is another man’s shrewd investment in economic development that will benefit the entire City both economically and fiscally.
• An article by Paul Martin on the need for the ballpark to be included in the development from an average density point of view. We are unaware of any such article and, as a result do not understand the question. The ballpark is included in the project because it provides the physical means—with its concourse constructed above the flood plain—to make the surrounding private investment possible. The new private investment generates the new incremental taxes that pay off the bonds on the ballpark without using any City (or state) bonding capacity or obligation and without using any existing tax revenues. To our knowledge, the ballpark has nothing to do with the allowable density of the project, which is compatible with the new Downtown Master Plan in that regard. Indeed, the ballpark provides the physical solution to achieve the DMP’s vision for a pedestrian-friendly streetscape of ground level retail shops in Shockoe Bottom.
2) What minimum bond rating is required? What is the maximum interest rate that the project (will) support?
No one can answer these questions until the financing structure is completed and an investment grade analysis of the proposed bonds is completed, which will likely be in early 2010.
3) Your proposal requires that the
Richmond Sports Facilit(ies) Authority pays all operational costs, including maintenance. If it fails—who will pick up the bill?
Our proposal specifically says the baseball TEAM would be responsible for operating and maintaining the ballpark and paying those expenses. We have reiterated this consistently in every piece of information we have distributed on Shockoe Center—including the PowerPoint presentation to the CHA, and in the 40 Frequently Asked Questions and the Financing Plan, both of which were available to the committee.
In your response to ACORN, you note that failure of the bonds could resulting a foreclosure on the property. What is the likelihood that anyone, other than the City, would step forward to buy the property.
First, of course, we do not anticipate that the bonds will fail. If they pass an investment grade analysis of their soundness to be sold we expect that they will be successful.
Second, if revenues do not fully meet projections, it does not necessarily follow that there will be a total default. More than likely, terms would be re-negotiated before that to satisfy the bondholders. About 75% of the anticipated new revenue stream dedicated to debt service payments is expected to come from non-baseball sources. At a minimum anticipated debt coverage ratio of 150%, the non-baseball new revenue will cover the debt service payments, with excess revenue left over.
Third, in the unlikely event of foreclosure, the bondholders would be the ones to step forward and buy the property, unless some other party out-bid them at the foreclosure. In neither scenario is the City required, either generally or morally, to step in and acquire the property.
4) What evidence do you have to support your current optimistic economic forecast?
The reason for our belief in the future of Richmond is simply optimism from having been through recessions before and always coming out of them with greater growth and prosperity. The current recession started in economists’ terms in December 2007. We hope that it will be possible to sell the bonds in the first quarter of 2010, more than two years later. But, if not, the bonds won’t get sold and the project won’t get built and our investors will put their $100 million in capital investment to work elsewhere. And, those who oppose the ballpark will not have to worry about it. They will continue to have Shockoe Bottom and its flood plain looking much like it does today – if not worse.
5) What acoustical and lighting studies support your contention that lighting and noise from concerts and events in addition to ballgames will have minimal impact on Church Hill? Where are their successful applications of your suggested technologies?
The issues of noise and lighting are of the greatest importance to the developers of Shockoe Center because their residential, hotel and office patrons will be the most directly affected. Indeed, it is crucial to the developers that neither noise nor lighting be a problem – and in solving those issues for their tenants, they will also solve it for every surrounding neighborhood as well.
This ballpark will encapsulate most of the noise it will generate. No, it will not have a roof, but it will have 60-foot high surrounding walls of commercial and residential buildings to minimize the impact of noise outside the ballpark. The digital age has improved the way sound is distributed in public venues. The old method of a few big blasting speakers has been replaced with the new technology of many smaller speakers focused on concentrated areas of the audience. Similarly, directional lighting technology has greatly improved to avoid the waste of light spill-out.
Much like tuning a piano after delivery, meaningful lighting and acoustical tests can only be conducted after construction for any specific site—and they will be in this case.
6) What has been the history of ballpark developments in residential, historic downtown areas where AA teams play – both from a commercial viability perspective and the impact on local environment?
Thank you for this “softball” question. That is why we proposed Shockoe Center as we have. And it is why we are able to attract developers willing to make the “up-front” commitments to create the economic development surrounding the ballpark.
Commercial viability: Of baseball—Minor league baseball has set new attendance records in each of the past six consecutive years. Most cities and Minor League Baseball attribute that surge in attendance to a boom in new, fan-friendly ballparks located in or near downtown areas not unlike Shockoe Bottom. Our analysis indicates 80% of the last 60 new ballparks fit this criteria and have been successful for their communities as well.
Of the downtown area—In most cases, new development has occurred around these new ballparks in an effort to capture a bigger share consumer spending from the thousands of fans before and/or after a game. In Shockoe Center, most people would regard $100 million in new private investment in the Bottom as solid economic development. That scale of investment must happen simultaneously with the opening of the new ballpark to generate the new revenues that make it financially possible to pay off its bonds. Obviously that is development generated by the ballpark. But, and this is what some fail to understand: The ballpark solves the issue of how to build profitably above the flood plain, which makes the private investment physically possible. Shockoe Bottom is an extremely attractive commercial/residential location–once the flood plain problem is solved.
Impact on local environment—Baseball and related development are positive for historic areas. They bring people and vitality to these areas and make more people aware of their heritage even if it only through brief passing encounters with it.
7) Why is it preferable to create a new ballpark next to historical residential areas when the current Boulevard site avoids this conflict and offers significantly better transportation and parking access?
First, we strongly disagree with the premise at the heart of this question. Shockoe Center will be at the intersections of Interstates 95and 64 and the Downtown Expressway, putting all parts of the region within minutes. It is also within walking distance for much of downtown. And this point has been critically important to the success of most recent ballparks developed in downtown areas. Shockoe Center’s access and parking is superior to The Diamond. Fans traveling south from I-64 and on I-95 will be able to take the
Franklin Street
exit, which will put them off right at the large state parking deck. Fans traveling north from the Expressway and I-95 will take the Broad Street exit, which will put them off beside a new parking deck to be built just north of Broad. Fans from the downtown area will simply walk. The Diamond is a commuter ballpark with large surface parking lots. The few businesses there see very little business from The Diamond because of this commuter design. People drive to the games and afterwards get in their cars and go home. At Shockoe Center we will create synergy with our environment that helps the neighborhood with economic development, flood management and new customers for area businesses and the neighborhood helps us with convenience of location, interstate access, existing deck parking and an attractive historic environment.
Also you have very recently disclosed that the Boulevard site will now include a sports center for VCU, VU and J. Sargeant Reynolds. Why wouldn’t the ballpark fit into that complex as it could also be used by the local universities for both training and championship games?
To concentrate all sports venues at the Boulevard would clearly require City taxpayers, and potentially County taxpayers if they are willing, to fund a new ballpark using their debt capacity through a general obligation bond issue. This puts the debt service liability squarely on the backs of the taxpayers and limits our ability to construct new schools and other vitally needed infrastructure. Why should we, as taxpayers, ignore the opportunity to use non-taxpayer capital for a new ballpark in Shockoe Bottom and prefer instead putting the City on the hook for a new ballpark to replace The Diamond?
As we have discussed, the ballpark we propose will be used by VCU for its home games and for a few high school playoff games. Combining professional baseball and amateur sports complex does not make as much sense as it might sound. The short answer is that building a new ballpark on the Boulevard would not leave enough room for significant economic development there. Further, that site does not offer the benefits that minor league baseball has found to be important to its success—a downtown walkable location in or near an area of historical interest and an entertainment district. Shockoe location offers the potential of a multi-modal transit hub.
What do you envisage will be the impact on local residential and commercial property values in Shockoe Bottom, Union Hill and all of Church Hill?
We expect property values in Shockoe Bottom to increase. Property values in Church Hill and Union Hill have been increasing for many years, at least prior to the current housing recession. Frankly, we expect that trend to resume, but we do not believe that Shockoe Center is close enough to either to have much impact.
Would you be prepared to fund an impact study on local housing values?
No.
9) Do you require the purchase under “Eminent Domain” rules of any buildings or land currently owned by the private sector?
No.
10) You have stated that the tax revenues to be used will be “new.” Will you, therefore, not include any revenues derived from businesses that relocate from other areas of the City?
No. There would be no way to administer it. That is certainly a possible scenario, but more likely scenarios are new businesses and expansions of existing local businesses elsewhere into an additional location in Shockoe Center. Net new growth, in other words.
