Ballpark plan needs city help, consultants say

MICHAEL PAUL WILLIAMS: Baseball in the bottom, they will come (VIDEO)

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PDF: Executive summary of report

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Consultants hired by the city of Richmond say it's highly unlikely that a ballpark development in Shockoe Bottom can be built without the city, in effect, co-signing for the loan.

Developers pushing for Shockoe Center, however, have said that tax revenue generated by the project would be sufficient to finance the $60 million stadium.

Mayor Dwight C. Jones released yesterday a preliminary report on the viability of Shockoe Center, the $318 million development that would also include restaurants, offices, hotels and residences.

The study calls the project "highly feasible" with city credit support and "highly unlikely" to be financed otherwise.

If city backing were provided, the ballpark could be financed at a substantially lower cost, but it also would use nearly 11 percent of the city's debt capacity, according to the report by Davenport & Co. and two other firms. The city also would be liable to cover bond payments if tax revenues generated by the development fall short of projections.

At a news conference, Jones said he has made no decision on whether the city should provide the public support to attract bond investors.

"We know that we have to do something" to make the project viable, he said. "If we determine it's in the best interests of the city, then we'll have to back it with our credit."

He did not rule out keeping baseball on the Boulevard or pursuing a stadium elsewhere, but he said he believes Shockoe Center could help transform the Bottom by overcoming the area's severe flooding problems and by positioning the city for funding to bring high-speed rail to Main Street Station.

"Let's be clear: I'm not the only decision-maker here," Jones said. "I'm sure that there will be competing ideas for how we bring Shockoe to its full capacity."

City Councilwoman Ellen F. Robertson said the suggestion of city credit support for the project "is a major difference from what we've heard at this point, but I agree with the mayor: It's worth evaluating."

The study says Shockoe Center would have to produce at least $67.3 million in annual sales to avoid tapping the city's credit support, assuming it's provided.

The $67.3 million would amount to a 2.1 percent increase in total citywide sales from 2008. The average increase was 3.9 percent from 2005 to 2007. Asked whether a 2.1 percent increase is realistic in an economic downturn, Jones described the amount as "not really too far a stretch."

Under its proposal, Highwoods Properties has called for financing the ballpark with tax revenues generated by private development that would occur simultaneously in Shockoe Center. The developers had recommended that approach to keep the ballpark from being a drain on existing city tax revenues, but they also acknowledged that their ability to sell the bonds was far from certain.

"This is a step in the process," Ralph L. Axselle Jr., an attorney for Shockoe Center, said after yesterday's news conference. The mayor has "offered us a path to go forward, and we'll take it."

In addition, Jones called for Highwoods Properties to work with other groups to coordinate their plans for the Bottom. In addition to Shockoe Center, the area is being eyed for a bus-transfer center, a black-heritage site, and high-speed rail.

"Smart people will begin to work together and to make sure that all of these competing interests are met," Jones said. "Clearly, a lot of stars have to line up for us to move forward."

The mayor set no timetable for a decision on Shockoe Center. Highwoods Properties had set Aug. 1 as a deadline for preliminary approval. Axselle said some decisions will need to be made by this fall to keep the ballpark on target for its planned opening in spring 2012.

Charlie Diradour, a real estate investor who has pushed to keep baseball on the Boulevard, called the consultants' report "the argument against" Shockoe Center.

He said he believes baseball can be accommodated on the Boulevard at a lower cost and potentially with support from surrounding counties. He said the city can't afford to dedicate nearly 11 percent of its debt capacity for a stadium.

"We've got schools that need to be built in this city, and the jail is in deplorable condition," he said.

The city spent $100,000 on the study, which was conducted by Davenport & Co. of Richmond, Economic Research Associates of Washington, and Chmura Economics & Analytics of Richmond.

The firms had endorsed the idea of a ballpark for the Bottom in a report last year to then-Mayor L. Douglas Wilder. A final report on the project's viability is expected in a few weeks.

Contact Will Jones at (804) 649-6911 or wjones@timesdispatch.com.