RVA-Area Development Deals!
Vaportecture at its finest
There were two big developments (as in, literal developments) in greater Richmond yesterday. The city of Richmond launched a survey related to a possible resort casino; and nearby Henrico County is taking on their version of the Navy Hill arena project.
First, the casino: the city’s survey is pretty much hot garbage. It’s not a survey so much as a cheerleading instrument, with a list of benefits masquerading as a series of questions. A respondent only really gets to rank benefits, with no questions about costs or asking of any concerns. The survey essentially asks, “Will the new casino be awesome, awesomer, or awesomest?”
To be fair, though, the state government has determined the casino development process in Virginia. For example, Richmond cannot determine the location or vendor ahead of time without fielding proposals. Overall, casinos are widely seen as a growing cash-cow business, good for tourism and tax revenues for cash-strapped local governments. You may, like me, feel ambivalent about gambling. But unlike “gaming emporium” developments like Rosie’s that are often criticized as preying on low-income folks, resort casinos target middle and upper class tourist dollars.
Still, it’s clear that this casino development begins as a top-down process, with not a lot of consideration of what people want or whether they even want it. If the Mayor learned anything from the Navy Hill debacle, he isn’t able to show it yet.
The sort-of good news is that any Richmond casino requires a referendum. The city can and will decide in November 2021. Last year, 4 other localities around VA were allowed to host similar votes, and all of them chose the casinos by large margins. While this is a gubernatorial election year, this fall will not have the voter turnout that 2020 did, so it’s hard to tell how this will affect the results. Still, as usual, the momentum will be on the developers’ side.
As for Henrico’s “Green City” announcement, I already suggested that it’s best to take a wait and see approach. So far we are following the blueprint of these kinds of deals, so we are currently in the “fanfare” stage with big announcements, lots of promises of jobs and “economic impact,” and various pictures of “vaportecture.” We don’t have details right now, only very fancy language from the developers about how “human settlements” have “evolved.” (Insert eye-roll emoji here.)
If we follow the blueprint, we will later find out that some of the promised jobs and projects won’t materialize, or the timeline will change, or some other result will fall short. (None of these possible downsides are discussed in the breathless Henrico Citizen report, which is essentially a NH Corp press release – the developers have to be happy with their PR efforts so far.) Arenas are expensive, and it’s not easy to generate enough revenue from any development to cover costs.
Still, this could end up being a good deal for the county. Henrico will depend on a version of a Tax Increment Financing (TIF) mechanism that uses future revenues from a project to fund that project. But there’s one big difference from the RVA version of the arena project: Unlike Navy Hill, the developers project enough revenue from the site itself to eventually pay for itself. So there’s no need to grab existing tax revenues.
Henrico used essentially the same finance structure to build up Short Pump, and that area of the county has been wildly successful in terms of tax revenue and that sort of economic development (though not good for people who hate soul-sucking retail corridors). Still, Short Pump didn’t have that expensive arena. We know that they do not generally pay for themselves, so Henrico is making a bet that the surrounding development will subsidize construction and operation.
No matter what, Henrico offers a better deal for developers - an existing site on cheap land, and fewer political pressures due to a different political/racial structure. Still, the county will surely face the same questions that RVA did (and any big development does) - about costs, economic "impact" and cannibalization, and equity. It’s their turn now.
And, as always, local politics will continue to revolve around land use. It’s what we do.