Richmond stepping up development strategy

Richmond Mayor Dwight C. Jones said he's ready to get serious about economic development in the city, particularly in Shockoe Bottom.

That's where the new Department of Economic and Community Development will set up shop, in historic Main Street Station.

It's also where the city hopes to attract millions of dollars in private development, including a commercial project that officials say is being courted with $10 million in newly approved federal stimulus bonds.

Similarly, the administration said in an exclusive interview Friday that it is looking to start a loan program to spur investment citywide by small and minority-owned businesses, as well as housing developers. Officials said it's part of a strategy to make the city an aggressive deal-maker that has access to capital and is no longer content to simply distribute grants to worthy projects.

"We'll not be able to cut our way out of the recession or tax our way out, so we've got to grow our way out," Jones said Friday, echoing themes from last month's State of the City address.

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Main Street Station

In his first major move at City Hall, Jones reorganized the Department of Economic Development and the Department of Community Development into a new Department of Economic and Community Development. In April, 33 employees from the merged department will move to the city-owned train station. It'll free up offices on two floors of City Hall and allow the city to stop renting space at 501 E. Franklin St., saving about $100,000 per year, officials said.

Jones said the decision also underscores a commitment to revitalizing the Bottom, with high-speed rail, urban infill development and a slavery museum.

"Our being there kind of says that, 'We get it. We're not only going to help you from City Hall, but we're going to be part of the neighborhood,'" he said.

Federal stimulus bonds

Officials recently learned that the city would be able to tap $34 million in bond financing to support private development projects under the American Recovery and Reinvestment Act. Initially, the city was allotted $8.8 million in bonds, but officials said they jumped at the chance to get capacity that was declined by other localities.

Now, officials said, they're talking to a developer about a project in or near Main Street Station, with $10 million in bonds as an incentive. They also are planning to provide $3.5 million in bonds to support plans by Cephas Industries to start a biomass recycling and manufacturing facility in the Broad Rock Industrial Park.

The federal Recovery Zone Facility Bonds are intended to help finance projects that are ready to go. While details of the prospective Main Street Station development haven't been finalized, the potential investment is "definitely not pie in the sky," said Peter H. Chapman, the city's deputy chief administrative officer for economic and community development.

Other projects approved for financing include outfitting space according to a tenant's needs in a building at the Virginia BioTechnology Research Park, a parking deck at the planned Manchester on the James apartment complex in South Richmond, and a planned conversion of the P. Lorillard Co. warehouses on Tobacco Row into an office and retail development.

Loan program

With the fiscal year starting July 1, the city plans to establish a loan program using about $2 million in federal Community Development Block Grant funds that have been allocated to the city but not committed for specific uses.

Details, including loan terms, haven't been fleshed out, but the idea is to create a pool of capital that can be replenished and can grow over time as loans are repaid with interest.

"We are going to be flexible, but I want to underscore the fact that this is not free money," Chapman said. "Regardless of the scope of the project . . . there is going to be an expectation that the money is going to be repaid."

Shockoe Bottom study

The city is hiring a consulting group, an affiliate of StreetSense in Alexandria, to prepare a development strategy for the Bottom. The $125,000 study is expected to identify one or more anchor projects that would be market-tested and followed perhaps by a request for proposals for the use of city property. The study is expected to take about six months and to build on the vision outlined in the Downtown Master Plan.

"We want to put something on the ground, make some stuff happen that can provide some synergy for the community," Jones said.

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