Theater Row, HostageThe city appears to be holding itself hostage by failing to acknowledge a billing mess over the refinancing of the city-owned Theater Row building on Broad Street.
The city embarked on a mission in 2006 to make Theater Row, which houses the Department of Public Utilities, available to private tenants wanting to be near the new federal courthouse across the street, a move that would require refinancing the building.
Opening the building up to private tenants would bring in new revenue for the city, and was vital to the economic development downtown, city officials said. But the city abruptly ended the refinancing process in the spring of 2007 without explanation.
The consultants hired by the city to help refinance the building claims the city is refusing to pay the contractors hired to do the work.
But here's the twist: The National Development Council, a New York-based economic development consultancy, was also hired by the city to administer a small business loan program in Jackson Ward in 2003.
City Council gave $450,000 to the New York consultancy to start the Grow the Ward fund to help end blight and promote small businesses in the neighborhood — and five years later most of the money is still with the company.
In a November 2007 memo to its unpaid Theater Row contractors, Bob Davenport, president of the consultancy, indicates that the $380,000 remaining in the fund should legally be returned to the city as they are no longer under contract. Even so, he says in a memo obtained by Style, he may have no choice but to use the remaining money settle up with the unpaid contractors in the Theater Row project. (It's also unclear whether the unpaid bills are affecting Virginia Commonwealth University's recent offer to purchase the building.)
That would mean the fund set up to revitalize Jackson Ward — in five years, only $70,000 in loans were made — would disappear.
“That's outrageous,” says Oliver Singleton, president of the Jackson Ward-based Metropolitan Business League, and former chairman of the Richmond Redevelopment and Housing Authority. “The city needs to pay its bills. The Grow the Ward Fund should be to promote business in Jackson Ward.”
In the November 2007 memo, Davenport informed contractors that the development council was “holding nearly $380,000 of monies from the City. …On two occasions, we have proposed to distribute these monies to you to partially offset the City's obligation to you. On one occasion, they rejected this offer. On the most recent occasion, they simply ignored our letter of a month ago. I believe this is an indication that they have no intention to negotiate in good faith.”
Davenport goes on to say that the consultants' options were to either sue the city or pay the contractors out of the Grow the Ward fund. Both Davenport and the city administration declined to comment.