Well, the Redskins are coming to town. For a few weeks each summer, that is, for training camp, and the City of Richmond is building them a brand new training facility on a swath of land behind the Science Museum.
Now, don't misunderstand me. I'm glad the Redskins are coming to town. And I personally believe the selected site is much preferable to the City Stadiumsite, apparently the runner up location. But, there is all kinds of wheeling and dealing between the City administration and others that looks curiouser and curiouser. And frankly, the City's deal with Bon Secours is just flat out a bad deal.
Why do I think it's a bad deal? Bon Secours is ponying up $6.4M for the new training facility, and in return it is getting naming rights and the ability to use the facility for its own programming. Okay, maybe that is fair and reasonable; Buy naming rights for recognition plus the opportunity to use the facility to provide your own services the vast majority of the time. $6.4M seems like a fair price. IF the deal stopped there.
But Bon Secours also got the Westhampton School campus at Libbie and Patterson for a ridiculously below market long-term lease of $5,000 per year for 60 years, a whopping grand total of $300,000. No word on whether or not there is at least a rent escalator in the lease. [NOTE: Real estate professionals estimate the property is worth between $20M-$30M dollars.]
THEN, apparently the City is also kicking in some additional land near Richmond Community Hospital for Bon Secours to develop for additional medical services.
Wow. Who knew nuns could be so Machiavellian? Or that the City was such a terrible negotiator.
Can I just say my objective evaluation of the deal is the City got screwed. I mean yes, the City ends up with the Redskins training facility here in town beginning in 2013, for at least eight (8) years, but by giving away the proverbial farm. And if they had enough money in Economic Development Authority bonds to fund the thing to start with, why not just go that route, take Bon Secours' $6.4M in naming rights/anchor tenant money, and raise the other $3.6M through other sponsorship opportunities, or leases for use of the facility?
For $6.7M investment, Bon Secours gets:
- Naming rights for the facility;
- Position as the "anchor tenant" at the facility, including the development of its own sports medicine and rehabilitation facility, which will presumably generate profits for Bon Secours;
- 60 year lease of Westhampton School [NOTE: Propererty value estimated to be $20M-$30M on the open market]; and
- Additional land from the City of Richmond to expand services at Richmond Community Hospital.
Looks to me like getting the Westhampton School property alone would have been a super deal for Bon Secours, without all the rest of the sweeteners. Bon Secours has been eyeing that site since the School Board moved Richmond Community High School. So have all kinds of developers who recognized what a prime piece of real estate the City was sitting on. But whoever ended up with the property was going to have to go 10+ rounds with the neighborhood associations for the very affluent surrounding neighborhoods, who all had varying opinions on what should or shouldn't be done with the property.
Bon Secours managed to get the dirt absurdly cheap, and present the entire deal as a fait accompli, effectively eviscerating any community opposition to the project. Done deal, presented all wrapped up with a bow. Nuns 1, neighborhood 0.
Of course the folks involved in negotiating this deal are pushing it as "good for the whole City." See this opinion piece by Michael Frazier, the Chair of the committee that was responsible for site selection, and presumably somewhat involved in the Bon Secours/City of Richmond negotiations.
Others have commented on the rush to lionize this deal, such as Terry Rea on his SlantBlog. This Richmond Times-Dispatch article details many of the objections and many of the objectors, including Bruce Tyler, Marty Jewell, Manoli Loupassi, Paul Goldman, and others. The scary reality: City Council is set to vote on the deal tonight, and I suspect it will get rubber stamped, no matter how cr*ppy a deal it really is.
At the same time, the lame duck City of Richmond School Board is set to vote tonight to "surplus" several parcels of property, including the Arthur Ashe Center on Boulevard and the Arlington Road warehouse site, both very proximate to the site of the Redskins training facility. Chris Dovi writes a great blog post for Richmond Magazine about why such a step is, at the least, concerning. Taking the step of declaring the properties surplus means the City of Richmond administration then gets to manage the sale of the properties, with the proceeds going back to the City of Richmond School Board, not to the City of Richmond coffers. In light of the cr*ppy deal the City cut with Bon Secours, I can't help being very concerned about the implications of this move, especially when seven (7) of the nine (9) School Board members are immune from any type of political fallout, since they won't be returning to the Board.
What if the City decides to enter into a long-term below-market rate lease with some developer for the Arthur Ashe property, rather than selling it on the open market for fair market value? What if the City decided to pursue its own economic development agenda, using these "surplus" properties as bargaining chips with the private sector development world in behind-closed-doors meetings? What if big deal economic development decisions that will impact the City for generations to come were negotiated in secret, then packaged and presented as "done deals," with no opportunity for public input? Could never happen, right?
Oh, yeah, right. It just did.
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Posted by: Homes Foreclosure | December 21, 2012 at 04:49 PM