Diamond Area / Hermitage Rd Corridor / Ownby District

[I miss RVA]

5 minutes ago, wrldcoupe4 said:

Have heard rumors of issues with the deal lately before this, but had been hoping it was just talk.  Not a good sign. 

Oy vey...

Issues... are you at liberty to clarify? Am guessing these issues would be specifically with the developer? Or does the city have any part in this?

[Hike]

Remind me of the location for the new park?  Reason I ask, is there demolition of structures involved? My idea would be to do these which can mitigate any concerns, go do some of the following;  like, shove some dirt around, knock over a building, set up a trailer, add a port-a-potty, put up barrels, cones, flagging, fencing,  a blinking truck, a sign that says future home or coming soon, minds would be at ease and could give the design team time to work. My hope is that the design teams are working diligently in the background. There are a lot of players now that are all trying to play in the sandbox at the same time. I’m assuming everyone is contracted and getting paid that is involved in this phase, and if they are, they have their hands full. Just getting programs and scopes from these is time consuming, there’s the MLB group, the city, VCU, the architects, engineers, the GC, just off the top of my head, all trying to press to get it done…..I hope.  I do feel it can be done, I hope they are working on it right now and all not just sitting around waiting for the city, please tell me they’ve already started!

Edited April 11, 2023 by Hike

[wrldcoupe4]

It’s on the grassy patch just south of the Diamond. 

12 minutes ago, I miss RVA said:

Oy vey...

Issues... are you at liberty to clarify? Am guessing these issues would be specifically with the developer? Or does the city have any part in this?

I haven’t heard anything specific. But, if you underwrote something big like this 12-18 months ago, there’s a good chance it doesn’t pencil today.   The City had a lot of asks for the project too, which makes it that much harder. 

[eandslee]

10 minutes ago, wrldcoupe4 said:

It’s on the grassy patch just south of the Diamond. 

I haven’t heard anything specific. But, if you underwrote something big like this 12-18 months ago, there’s a good chance it doesn’t pencil today.   The City had a lot of asks for the project too, which makes it that much harder. 

Sounds like the economy with either kill this project or significantly delay it then. If it doesn’t pencil…it doesn’t pencil and no one will move forward with anything.  Just great….

[I miss RVA]

16 minutes ago, wrldcoupe4 said:

I haven’t heard anything specific. But, if you underwrote something big like this 12-18 months ago, there’s a good chance it doesn’t pencil today.  

The City had a lot of asks for the project too, which makes it that much harder. 

Oy vey!!! Wow... Thanks, Coupe.

Man... to your two points:

1.) The continued uptick in interest rates and still-elevated construction costs are the the primary factors of why it wouldn't pencil now, yes? Of the two - which is more impactful? (General costs/supplies, labor, etc. or interest rates?) Haven't overall costs stabilized somewhat from last year, when they were skyrocketing?

2.) City & asks: Yeah... this is very true. They did and still do. Man... Well, this would certainly explain why the folks at City Hall are not returning phone calls and emails. Damn...

Edited April 11, 2023 by I miss RVA

[I miss RVA]

@RVABizSenseMike-- have you guys heard any kind of word on the street about this? It seems like the RT-D stumbled upon these developments while they were just doing some follow-ups. As you've seen in the thread, apparently there've been some rumblings within the CRE industry.  It's got a bad feel to it. 

[wrldcoupe4]

A big project like this exceeds my brain power. Just sharing generalities that shouldn’t be surprising to many. 

[I miss RVA]

7 minutes ago, wrldcoupe4 said:

Just sharing generalities that shouldn’t be surprising to many. 

You've got a point there. It probably shouldn't be all that surprising, all things considered.

Based on the timing of when the city finally got off their tuchuses and initiated the process (if memory serves, wasn't there a ridiculously long delay in the city even getting the initial RFP's out the door? Or am I just imagining things?) - do you think had they gotten a much earlier jump on this that perhaps the current economic environment would be less impactful? Or would it still have ground things to a halt even if construction had already started? (a la the big Amazon project in NOVA that recently just stopped cold, mid-construction...)

Edited April 11, 2023 by I miss RVA

[wrldcoupe4]

Timing is everything, and this process probably started a little too late. Access to capital and borrowing costs were completely different a year ago, 2 years ago.  But that’s hindsight for you. 

[Icetera]

54 minutes ago, Hike said:

Remind me of the location for the new park?  Reason I ask, is there demolition of structures involved?

From what I recall, the location for Phase 1 is basically all of the cleared green space here (Ballpark left), then Phase 2 replaces the old stadiums:

[I miss RVA]

4 minutes ago, wrldcoupe4 said:

Timing is everything, and this process probably started a little too late. Access to capital and borrowing costs were completely different a year ago, 2 years ago.  But that’s hindsight for you. 

 !!!

And if I remember correctly, we all were getting pretty agitated on here that the city was taking SO long to initiate the process - and that the selection process dragged on and on... Man...  How the heck is it that the city seems to keep coming up a day late and a dollar short on big redevelopment efforts like this?

Edited April 11, 2023 by I miss RVA

[RVABizSenseMike]

20 hours ago, I miss RVA said:

@RVABizSenseMike-- have you guys heard any kind of word on the street about this? It seems like the RT-D stumbled upon these developments while they were just doing some follow-ups. As you've seen in the thread, apparently there've been some rumblings within the CRE industry.  It's got a bad feel to it. 

We are tracking this, stay tuned. 

[I miss RVA]

1 minute ago, RVABizSenseMike said:

We are tracking this, stay tuned. 

Thanks, Mike! 

[Virginian11]

Wonder if they can roll this into greencity?  Henrico, you’re on the clock!

[BigBobbyG]

56 minutes ago, Virginian11 said:

Wonder if they can roll this into greencity?  Henrico, you’re on the clock!

While this would be better than no squirrels in the Richmond metro I really hope they work it out in the location it's planned for.  It's purely emotional reasoning but I hope they stay in the city proper, maybe they can work out a deal with the MLB if they are a few months late?

[Hike]

28 minutes ago, BigBobbyG said:

While this would be better than no squirrels in the Richmond metro I really hope they work it out in the location it's planned for.  It's purely emotional reasoning but I hope they stay in the city proper, maybe they can work out a deal with the MLB if they are a few months late?

If there is truly a problem, delaying was my thought too, just keep paying penalties and buy some time. With its attachment to VCU, I’m not too worried about it going to Henrico, doubt VCU would accept that deal. 

[Flood Zone]

50 minutes ago, Hike said:

If there is truly a problem, delaying was my thought too, just keep paying penalties and buy some time. 

This is a Triple-A size market, and the Squirrels have finished 1st or 2nd in the Eastern League in attendance, despite playing in a purported albatross of a ballpark (and the Squirrels having been essentially promised a new one for over a decade now). Bluster notwithstanding, it's extremely unlikely they're going anywhere, and I'm sure MLB will be happy to extort a bit more money in return for any reasonable delay. Remember, 2025 is an edict - not any kind of existential marker. 

None of this should be interpreted as any kind of endorsement for lollygagging, were that to be what is happening here.

[I miss RVA]

1 hour ago, BigBobbyG said:

While this would be better than no squirrels in the Richmond metro I really hope they work it out in the location it's planned for.  It's purely emotional reasoning but I hope they stay in the city proper, maybe they can work out a deal with the MLB if they are a few months late?

I tend to think MLB will be more patient provided they see evidence of a new ballpark. Like... you know... construction ACTUALLY happening and being pretty far along. Now, if we keep waiting and delaying for the economy to straighten out - and it takes a year, 18 months or more for more favorable economic conditions to be in place so this whole thing pencils, I somehow doubt MLB will be overly understanding if we're just breaking ground a month or two before the 2025 season is set to start.

Edited April 12, 2023 by I miss RVA

[I miss RVA]

I grabbed a portion of the thread about the ballpark situation on the RVA subreddit. No idea of what the individual is saying either about himself or the situation is true, but if it IS true, we have some interesting insight that, of course, will lead to a ton of speculation and a zillion more questions. Still - it's worth seeing.

Also it seems that what we're seeing here is tantamount to little more than finger-pointing (provided the source is legit & on the up-and-up). A healthy dose of skepticism is warranted here unless anyone with their ear to the ground might be able to corroborate.

If, in fact the city is doing the foot-dragging and it's not necessarily a financing issue on the developers' side - then what's the deal with that?

 

Edited April 13, 2023 by I miss RVA

[wrldcoupe4]

Sounds about right. 

[Flood Zone]

RBS has an article up this morning that touches on this subject, in part.

[I miss RVA]

6 hours ago, Flood Zone said:

RBS has an article up this morning that touches on this subject, in part.

Yep! And herewith is Mike's reporting. As always, a few takeaways and thoughts:

First and foremost - KUDOS to @RVABizSenseMikefor his absolutely OUTSTANDING reporting on this story.

As a former journalist with The Associated Press, I have to say I am very impressed with the depth, breadth and scope of this article -- and the delivery of the facts and details in a clear style that even we layman can understand, along with the writing flair that's uniquely Mike's. This is good old fashioned shoe-leather journalism at its very finest, and if I were in a position to have any say, I would gladly & absolutely nominate both Mike and this article for a Virginia Press Association award for top business writing. Mike, this is one of your best pieces that I can remember reading, if not THE best - and I honestly do hope someone in the industry puts you up for a VPA award for 2023. You definitely are worthy.

Okay - that said, some interesting takeaways:

TICK TICK TICK... One of the more encouraging nuggets is that while there have been a handful of projects that developers have essentially scheitze-canned their projects and are putting the shovel-ready, plan-approved sites up for sale, the lion's share of developers appear NOT ready to throw in the towel and are willing to ride this out. Fulton Yard, being on example. Level 2's two apartment building projects on N. Arthur Ashe Boulevard being another. (And the folks at Level 2 indicated in the article they're planning to move forward with their developments - which is VERY good news!) All of which leads me to ask:  when all of this settles and once interest rates get pulled back, given the continued flow of businesses & residents to a now fairly rapidly growing RVA market, will we see a tidal wave of construction sweep over RVA (city & metro) down the road? Meaning - will all these developers who are on hold at the moment all come loaded for bear launching construction of their developments once the economy is more favorable? Asking all of our gurus - particularly @wrldcoupe4& @upzoningisgoodfor your thoughts.

MARKET SIZE... This is something I've lamented about being RVA's HUGE stumbling block - still positions Richmond BEHIND other (obviously larger) markets - however, this slowdown is hitting EVERYONE. From Mike's reporting:

Volatile markets tend to lead real estate investors back to focus on larger cities, (Andy) Little (of John B. Levy & Co.) said, but he added that no market is immune from the current slowdown. 

That echoes what I've said all along - the (now much larger) Carolina cities, the Austins, the Atlantas, & the Nashvilles of the world tend to bounce back faster than Richmond (or be impacted less) because of market size. We're still too damn small, and as has been recently discussed on these forums, we're still being WAY outpaced by our direct competitors in terms of population growth, and that needs to change.

HOWEVER...

RVA HAS CROSSED A RUBICON (of sorts) -- Even with the market size problem in play, the RVA of today has a BIG advantage over the RVA of decades past: we're (finally) becoming a known entity, if nothing else, within the CRE industry from the standpoint of investment & development. Again, from Mike's reporting, quoting Andy Little:

“Richmond was really on a nice tear, getting on the radar screen of a lot of big investment groups. I hope that momentum continues..."

This is a HUGE change from years gone by. RVA is no longer an unknown quantity and has been garnering name recognition nationally. The last 8 to 10 years have seen Richmond emerge from a cocoon of sorts - and we all know, success begets success. That said - again a question to our gurus - how does that position Richmond going forward for a BIG upswing in construction & growth once the market settles back down?

At least one developer -- and hopefully his views are echoed across the entire industry -- sees RVA maintaining the upward trajectory as one of the country's up-and-coming HOT go-to cities. From Mike's article:

Even while navigating a high-pressure deal like the Diamond District planning process, (Jason) Guillot (of Thalhimer) said that he thinks Richmond is “unequivocally in a sustained growth pattern for years to come,” and that he’s optimistic interest rates will be a short-term problem. 

“In the long term we should all be very bullish about our region as more businesses and people make Richmond their home,” Guillot said. “Even the Fed can’t slow down Richmond.”

I'm trying not to be overly Pollyannish about this - but I can't help but feel optimistic because it appears that the CRE INDUSTRY ITSELF is optimistic about Richmond. Bullish, as Guillot put it. Indeed, from his lips to God's ears, folks.

Thoughts?

From today's Richmond BizSense:

https://richmondbizsense.com/2023/04/13/undeniably-the-biggest-challenge-richmond-developers-reckon-with-rising-interest-rates/

Edited April 13, 2023 by I miss RVA

[I miss RVA]

Posting this just to point out how very different mindsets can be in terms of whether or not a city/metro is progressive/forward thinking and bullish about themselves. Sports Illustrated (SI.com) is reporting that Salt Lake City has entered into the conversation for possible MLB expansion. Why is that pertinent to Richmond? Of any city/metro in this country that's comparable in terms of pure size (and Richmond has the edge in this - at least for now) - it's Salt Lake City. To wit:

Salt Lake MSA estimated 2022 population - 1.192,000 

Richmond MSA estimated population (by at least one estimate) - 1.339,000

Yes - I realize as @wrldcoupe4has said many times it comes down to the old real estate mantra of "location, location, location."  RVA is too damn close to Washington-Baltimore, whereas Salt Lake City is pretty much the only game in town in their region. By a wide margin. However, RVA COULD THEORETICALLY pull from the additional 1.8 million in Hampton Roads - so our combined markets would total 3.1 million.

I'm just finding it interesting that a market that's smaller that Richmond is bullish and forward-thinking enough to actually think they have a legit shot at an MLB franchise. There's a rather impressive list of considerably larger markets ahead of them on the list that have a much better chance at landing a club. But kudos to SLC for even trying - while we're still trying to figure out how to build a bloody minor-league ballpark for a AA-level team.

No idea if this is behind a pay wall or not - I subscribe so I'm able to read it.

https://www.si.com/mlb/2023/04/13/salt-lake-city-reportedly-wants-mlb-expansion-team?utm_source=Iterable&utm_medium=email&utm_campaign=campaign_6605105

[RVABizSenseMike]

2 hours ago, I miss RVA said:

Yep! And herewith is Mike's reporting. As always, a few takeaways and thoughts:

First and foremost - KUDOS to @RVABizSenseMikefor his absolutely OUTSTANDING reporting on this story.

As a former journalist with The Associated Press, I have to say I am very impressed with the depth, breadth and scope of this article -- and the delivery of the facts and details in a clear style that even we layman can understand, along with the writing flair that's uniquely Mike's. This is good shoe-leather journalism at its very finest, and if I were in a position to have any say, I would gladly & absolutely nominate both Mike and this article for a Virginia Press Association award for top business writing. Mike, this is one of your best pieces that I can remember reading, if not THE best - and I honestly do hope someone in the industry puts you up for a VPA award for 2023. You definitely are worthy.

 

Thank you for the kind words, I really appreciate it. 

[Flood Zone]

1 hour ago, I miss RVA said:

Yes - I realize as @wrldcoupe4has said many times it comes down to the old real estate mantra of "location, location, location."  RVA is too damn close to Washington-Baltimore, whereas Salt Lake City is pretty much the only game in town in their region. By a wide margin. However, RVA COULD THEORETICALLY pull from the additional 1.8 million in Hampton Roads - so our combined markets would total 3.1 million.

I'm just finding it interesting that a market that's smaller that Richmond is bullish and forward-thinking enough to actually think they have a legit shot at an MLB franchise. There's a rather impressive list of considerably larger markets ahead of them on the list that have a much better chance at landing a club. But kudos to SLC for even trying - while we're still trying to figure out how to build a bloody minor-league ballpark for a AA-level team.

(1) The problem isn't really market size, even when considered as a combination with Hampton Roads. I mean, it is market size, but the more immediate death knell would be TV rights. The O's and the Nats are STILL litigating over the latter's junior share of MASN money that was due over a decade ago.  (We're part of that TV rights area, and so is Hampton Roads, and so is Raleigh.) MLB wouldn't touch that and further divide it for a long time, at least until the O's can't maintain MASN any longer. The age of regional sports network money is dying, which is why baseball has gone all-in on the sports book money.

I think we'll eventually see an NBA team in Virginia Beach, assuming an area is over built there, of course. Outside shot of an NFL team one day. I'd support the former, and, until hearing news that Snyder has reached an agreement to sell today, I would've considered the latter.

(2) SLC's bid would be a longshot. And they're in a CSA that totals 2.7 million, 22nd in the country. Not great, but not terrible; it wouldn't be the worst TV market in MLB. Above caveat about RSNs applies. Nashville and Portland are stronger expansion candidates, with years of lobbying at the local and state levels.