Every day, people ask me: Paul, what goes with our Richmond leaders' obsession for sweetheart deals?
First it was Mayor Dwight Jones and his no-bid Shockoe stadium, Redskins training camp deal, and taxpayer-funded giveaways to Stone Brewing Co., based in California.
Now, Mayor Levar Stoney wants to outdo Jones. Stone Brewing is brazenly saying the crony deal with Jones isn't sweet enough. It is demanding to have the city replace the agreement with perhaps the sweetest crony deal in city history, better than the Redskins deal by far.
And Stoney? He's fine with that.
Maybe the word "obsession" is misplaced. But something about the new Stoney-Stone deal doesn't pass the smell test. Here's why.
Jones' Initial Sweetheart Deal
An independent analysis of the 2015 Jones-Stone deal for a brewery and bistro in Fulton found it cost taxpayers 300 percent more than comparable agreements across Virginia. Stone got tens of millions in taxpayer-fronted subsidies and other perks to build the brewery in its first phase. That's finished. Now comes a second stage obligating Stone to renovate the historical Intermediate Terminal Building into a bistro restaurant on nearby waterfront property along the James River. For this phase, the craft brewers finagled an additional near $10 million in city-financed goodies, along with roughly $10 million in free land and buildings. City Hall doesn't refute this analysis.
The council, afraid to buck the Jones political machine, backed him 9-0.
Stoney Feeds the Sweet Tooth
Candidate Stoney criticized Jones' crony deals. Talk is easy. But around January of this year, according to the mayor's office, Stone privately informed the mayor they wanted to break the contract. Why? The company claimed the terminal lacked historical value and had been constructed in 1937 with a weak structure lacking reinforced concrete, making it impossible to economically renovate into the promised bistro.
But Stone had a solution: The company gets to break its obligations and ask the city for a sweeter deal. Richmond pays to demolish the historical structure, lets Stone eventually get the now cleared land free of charge, while the brewer still gets the $8 million up-front money in the current contract even though the new bistro will be half the size of the restaurant promised in the original contract.
Stone went public with the demands in March. That's when I expected Stoney to stand up for the public interest and take the opportunity to save the city millions by getting out of a bad deal. It didn't happen. In April, the mayor's office introduced at City Council the necessary ordinance to give Stone all it wanted.
And you thought California was the land of the gold rush? The deal seemed destined for quick approval.
Defending the Public Interest
Based on my experience, I knew the Stoney-Stone deal didn't pass the smell test. Stone had not used the right structural testing, yet City Hall didn't question it. Stone indicated the building lacked historical value. The city backed the company here too.
I knew they were wrong. I walked the property with a top structural engineer, talked to a highly regarded local expert on historical renovation. Stone and City Hall claimed the 1937 construction specs and architect design drawings couldn't be found. Wrong: I found them with two phone calls.
Presto: I paid $261 and got the plans from the Library of Virginia, across the street from the mayor's office. A further search by my historical expert found a wealth of information proving the building's historical value. At all times, City Hall could have likewise found this information. After asking the Virginia Department of Historic Resources to look into the issue, it sent a letter June 7, saying the info the city provided to justify demolishing the building was insufficient. The mayor and his council allies are now trying to find a new strategy to give Stone what the company wants. The mayor's ordinance is delayed until at least the July 23 council meeting.
Does the mayor's ordinance violate the law? City Hall claims Stoney only needs five out of nine Council votes for his deal. But legal memo to council from lawyer Charles Nance and myself points out that the Virginia Constitution requires seven votes to sell any "right" of the city to waterfront property. A little noticed 2015 ordinance by Councilman Parker Agelasto kept a revisionary city right in the property, saying the building and land would return to Richmond if Stone reneged on the original contract terms. Thus the city must agree to forfeit this right before the structure can be demolished.
Bottom line: With Stone indicating an anticipatory breach of a legally binding contract, Stoney and council can save Richmond millions and eliminate government-funded unfair competition to local restaurants. Perhaps sensing a rising tide of outrage at this cronyism, Stone has hired a lobbying firm close to Stoney, the same outfit used earlier this year to arm-twist City Council into raising the meals tax without the usual prior meetings in each district to give residents' input.
Stoney, like Jones, finds millions to finance glitzy new buildings while claiming there isn't any money to repair neighborhoods or do the necessary basic maintenance on the most aged, decrepit school facilities in the state. I believe Richmond wants different priorities. Unless something changes, the voters will have to decide in 2020. S
Paul Goldman is the former chairman of the Democratic Party of Virginia. Opinions expressed on the Back Page are those of the writer and not necessarily those of Style Weekly.