Is Carmax Park a Win for Richmond?

Rich Meagher:

Hey, RVA. We’ve had a lot of fun this past season on RVA’s Got Issues covering stories from the state capitol to VCU to City Hall. Through it all, we really appreciate the support from our listeners. Our show is taking a little break for the summer, but don’t be sad. We’ll be back in the fall with all new episodes of RVA’s Got Issues. If you have ideas for what we should cover next season, send us an email at [email protected] and check out our Instagram @richgotissues for bonus content. Until then, remember, Summer Vacay is a great time for catching up on episodes you missed and thanks for listening. This is RVA’s Got Issues. I’m Rich Meagher.

WRVA Archival:

Less than a year ago, we were putting the final piece of structural steel on CarMax Park.

Rich Meagher:

This is a recording from news radio WRVA of opening night at CarMax Park, a new stadium for Richmond’s beloved minor league baseball team, The Flying Squirrels.

 

WRVA Archival:

In three, two, one. Welcome to CarMax Park.

Rich Meagher:

After years of languishing in The Diamond, a ballpark with history but mostly just a big ugly chunk of concrete, fans seem pretty happy with the team’s new home, but it hasn’t been all good vibes. There’s a behind the scenes battle between the team’s owner, Lou DiBella, and the Diamond District developer, Richmond-based commercial real estate company, Thalhimer Realty Partners. That dispute recently spilled into full view when a memo surfaced alleging DiBella’s dog bit a Thalhimer executive on that same opening night in April. DiBella has responded with a defamation lawsuit. Alongside this drama, there’s also some bigger questions about how the city of Richmond paid and continues to pay for the ballpark.

Is the investment we’ve made in the Flying Squirrels worth the cost? There’s no one I’d rather talk through these questions with than my guests two longtime RVA journalists. Scott Bass is news editor of Richmond Magazine. Welcome, Scott.

Scott Bass:

Thank you.

Rich Meagher:

Michael Phillips is the founding editor of the Richmonder and host of MP On The Mic on 910 The Fan. Welcome, Michael.

Michael Phillips:

It was great to have you on my show and it’s great to return the favor.

Rich Meagher:

It’s great to have you here. I think we do need to at least lay out a little bit of, of what allegedly happened on the night of the opening of Carmax Park. It was supposed to be this celebration.

Michael Phillips:

Yes.

Rich Meagher:

You both are kind of laughing about this, right? Because the allegations are, are a little odd about what happened, Scott.

Scott Bass:

My understanding is Luo DiBella’s dog, uh, somehow got loose and, and found its way into one of the suites where, uh, the Thalhimer folks were. Apparently uses the, the bathroom on, on someone’s shoe, the developer, Jason Guillot, and then, uh, Maritza apparently was bitten-

Michael Phillips:

Gets bit.

Scott Bass:

… in the process.

Michael Phillips:

Yeah.

Rich Meagher:

Yeah.

Scott Bass:

Or at least that’s what the memo-

Michael Phillips:

Uh, both sides agree that there was a bite.

Scott Bass:

Okay.

Michael Phillips:

So, so we all, we are, we are in agreement on the bite. What happened next though is, is in dispute because, uh, Jason and Lou get into an argument and there was an allegation of, uh, uh, the kind of slap that is named after a female dog. Uh, we’re not sure what was said. Both sides agree there was an argument between the two over The Diamond.

Rich Meagher:

So there is a real dispute here, but I think we should start by understanding who the players are, you know, the off the field players. We have the Diamond District developers, uh, Thalhimer and particularly two people, Jason Guillot and Maritza Pechin. And those folks are the ones who are supposed to be developing this Diamond District all around the stadium.

Michael Phillips:

And one of the points of contention here is that initially they were supposed to build the baseball stadium, but Lou was unhappy with the way they were working towards that and ultimately they agreed they would give Lou the amount of money they were going to spend on it and he would build the baseball stadium with his people.

Rich Meagher:

So he got his contractors to build it instead.

Michael Phillips:

Yeah. Yeah.

Rich Meagher:

Michael, who is the Squirrel’s president and managing owner, Lou DiBella?

Michael Phillips:

Lou DiBella is a longtime boxing promoter. He’s well known in the boxing industry. He’s actually in the Boxing Hall of Fame. New York guy, if you’ve ever heard him speak, he’s, he’s New York through and through.

Rich Meagher:

Yeah. Yeah.

Michael Phillips:

And he’s of that boxing world. He, he bought a team in Connecticut, uh, and moved them to Richmond when the Richmond Braves departed over lack of a new stadium. Uh, when he moved the squirrels here, 16 years ago now, uh, the city said, “We’ll work to get you a new stadium.” Uh, that did not go as quickly as anybody anticipated. And indeed, Major League Baseball ultimately set a deadline that the new stadium had to open in time for the 2025 season. Uh, well, they missed that one too, but, but we, we did get there eventually.

Rich Meagher:

Eventually. And I should say, uh, among all these other folks, these players, there is a dog.

Michael Phillips:

<laugh>

Rich Meagher:

Uh, Topolina?

Michael Phillips:

Dog in the fight.

Rich Meagher:

Yeah. So-

Michael Phillips:

Topolina is Italian for a little rat.

Rich Meagher:

Oh, okay. So, and, and, uh, Michael the Richmonder ran a great picture of Topolina at a table drinking some water out of a glass, I think.

Michael Phillips:

By all accounts, Topolina is the first love of Lou’s life. Lou, you know, big guy, he’s, he’s, you know, certainly boxing world, big macho guy, uh, with this little tiny rat dog. Uh, it’s a funny sight.

Rich Meagher:

But the underlying dispute is important, right? Because DiBella’s lawsuit does not describe a happy relationship with either the developers or the city. The lawsuit claims that developers were supposed to open, you know, housing, hotel, or retail space, but yeah, the, the team and DiBella don’t seem happy with the pace of development. What, what is this all about here, Scott? What are they talking about?

Scott Bass:

So the reason why the ballpark has been so contentious-

Rich Meagher:

Yeah.

Scott Bass:

… in my opinion, over the last, I mean, it’s been 20 odd some years, right? The approach to building a ballpark has been, we’re gonna build this using, um, what they call tax increment financing, which is you create this special little district, um, and essentially it, it’s a, it’s own little town and you take all the revenues that that special little district creates and you use that money to pay off the bonds to build-

Rich Meagher:

Right.

Scott Bass:

… the ballpark. And that’s been the plan for a long time. The reason why that really did not work well in this case was because in order to generate the revenues to pay off those bonds for the ballpark, um, you had to have the development around it up and, and running and because the Major League Baseball needed the ballpark or wanted the ballpark open by 2025 initially, um, that meant that couldn’t happen. So the ballpark had to be built first so suddenly you couldn’t actually do the tax district.

Rich Meagher:

So, so just to unpack this, right? The, the original thought and plan was you build some hotels, you build some bars, you build some housing and you take the tax revenue from that that you’ve just built and use that money to build a ballpark, right, to pay for building the ballpark. Now you’ve got both the ballpark, you’ve got the area around it, right?

Scott Bass:

The acknowledgement, however, from the very beginning though has been the ballpark is not going to generate enough revenue on its own to pay for itself. And no stadium in, in the country does Major League or Minor League-

Rich Meagher:

Yeah.

Scott Bass:

… um, that I’m aware of. So that’s the issue.

Rich Meagher:

I wanna ask about the opportunity cost here, right? We sunk a lot of money. The city did, right? And literally the city, not this TIF financing, the city council had to vote and say, “Yeah, the city of Richmond is gona back the bonds. We’re essentially, we’re gonna put the stadium on our credit card.”

Scott Bass:

Yep.

Rich Meagher:

Right? We’re not gonna let some other entity do it. We’re not gonna f- fund it through some future off the books mechanism. Why is that a problem?

Scott Bass:

Because remember, like, from the very beginning, the city put it out that we want to have as little involvement with the financing of the stadium as humanly possible. And that was one of the requirements in the RFP. Once the city decided we’re just gonna put the full faith and credit of the city’s tax base behind this project, then I mean, we could build a park anywhere, right?

Rich Meagher:

<laugh>

Scott Bass:

You don’t need to put it in the middle of this site where Thalhimer is trying to build housing and commercial.

Rich Meagher:

Yeah. Let’s put it on the south side, right, where there’s always this concern about not having enough development.

Scott Bass:

That’s one of my issues is that, you know, we didn’t have that conversation because we treat it like an economic development project that was gonna essentially free money. Um, you know, basically that’s the idea behind these TIF districts is that you can build it and it won’t cost you anything. And this, this sort of mythology of privatization solves everything in this country-

Rich Meagher:

Yeah.

Scott Bass:

… kind of fits into this pattern as well, right? All you gotta do is throw money at, at some, some businesses and they’ll figure out, let the free market do its magic kind of thing.

Rich Meagher:

And tax revenue will magically follow.

Scott Bass:

When, when it’s exactly the opposite when it comes to economic development, because most of the time what you’re really doing is picking a winner over someone else.

Rich Meagher:

Yeah.

Scott Bass:

You’re saying this particular company, um, or this particular project is worthy of tax credit while someone else has to, to pay the full, full price.

Rich Meagher:

There’s a history in Richmond of these kind of like big projects. You wrote about this in, in Richmond Magazine, Scott, on your ‘big projectitis’ article, right? But the idea that we are gonna build some big, shiny project and it’s gona solve all the city’s problems, why do we get this pitch that doesn’t seem to end up like the reality?

Scott Bass:

Well, because, you know, since desegregation, um, since the ’70s on, I mean, the city has been trying to recapture its lost tax base. You know, you had all this white flight, um, back in the ’70s, um, everyone left. I mean, Richmond was in this place, that’s why the Coliseum was built.

Rich Meagher:

Yeah.

Scott Bass:

Um, which opened in 72, 73 to try and get the people who working downtown to stay a litle bit longer. Then, you know, you had Sixth Street Marketplace come along and then you had the convention center project come along. Like all these things were, were sort of intended to sort of bring people back to the city, um, and recapture sort of that lost tax base. So what’s really ironic about this whole fight between DiBella and, and Thalhimer Realty in the city is the fact that now you’ve got the owner of this facility essentially trying to block development around it, which I think would be problematic for, for most taxpayers.

Rich Meagher:

I, I wanna get back at this credit card issue though again, because there, there’s other things going on in the city and, and it has to do with this civic kind of conversation that you’re talking about, Scott, that we haven’t done, right? The ballpark, we want a ballpark. Sure, okay. Major League Baseball has put a, a, a deadline on us. Well, so we need the ballpark now. Well, uh, the only way we can build it is if the city builds it and puts it on its credit card. Okay, well, let’s do that, right? There’s no conversation about what does that mean for anything else that we wanna build. Uh, like for example, a courthouse. Uh, right now the city is, uh, it’s under a court order to not necessarily build a courthouse tomorrow, but they need to explain why it is that they’re not doing anything to improve or not enough to improve the courthouse, right?

Scott Bass:

Right, right. There’s a 350 million dollar courthouse that needs to be built and now all of a sudden they don’t have the, the, uh, bonding capacity to do it, but they did have the bonding capacity to float $130 million in, in bonds for a ballpark.

Michael Phillips:

Yeah, a courthouse doesn’t generate any additional revenues the way that, you know, if stadium people go to the stadium, you know, if they come from Henrico, if they come from Chesterfield, they eat dinner, they pay our 13% meals tax, they do all those, you know, courthouse is not gona fundamentally do those things. But, but to your point about the rush, these agreements were not fleshed out when they were signed and we’re, we’re fighting over handshakes and deals and you just say it’s, it’s $130 million project and $2.4 billion development a- and we don’t have firm answers.

Rich Meagher:

Yeah. And in this case, there’s, there was an actual deadline from Major League Baseball and, and these are more than just empty threats, right? Michael, teams do leave cities all the time.

Michael Phillips:

Can and do and I think they would have followed through on this one had the stadium not been built, but that put this tremendous pressure on … Uh, we can run through all the ideas, stadium on Mayos Island, stadium in Shockoe, regional stadium, stadium in Short Pump. We had all these ideas that never flew and, and came to fruition and Major League Baseball looked around and said, it’s been 10 years. You promised us one when we moved, it’s time to put up or shut up and, uh, really created a scramble.

Rich Meagher:

Yeah. And, and I, I guess the, the bigger question here, it might be a good time to ask this question. Why do we care?

Michael Phillips:

<laugh>

Rich Meagher:

Right? Um, so Scott, you’re talking about, well, we need this ballpark as an anchor. Well, maybe not, right? Maybe that’s not so great an argument here, but, but why do we need The Squirrels in Richmond?

Michael Phillips:

It’s bread and circuses, right? You know, it keeps, keeps people entertained, keeps people happy. I’ll, I’ll say this, one of the things Major League Baseball has done, they contracted the minor leagues in, in I think 2021 by about 60 teams. And so now there is more demand for minor league baseball than there is supply of minor league baseball teams. When we talk about the bluffing or not bluffing, I don’t think it was bluffing. Uh, but you know, we measure our civic health through themes like this. Are we a triple A city? Are we a double A? You hear the phrase, a major league city, right?

Rich Meagher:

Yeah.

Michael Phillips:

That comes from, has a major league sports franchise in its city. Uh, we can argue all day long about whether that’s a healthy way to measure civic pride, uh, but, but it’s I think indisputable that were The Squirrels to have left, uh, I think there would have been a, a civic pride blow to, “Oh, Richmond, that’s a town that can’t support sports. It’s a town that, that, you know, they’re not even minor league. Forget being major league. They’re, they’re not even minor league.”

Scott Bass:

I would say that that same argument was made that, you know, if you don’t build this new facility, they’ll leave when the Atlanta Braves, um, were considering pulling the Richmond Braves out of Richmond. Uh, and I, I remember at the time because I covered this, um, it did not take very long for Richmond to get another team. And the reason is because we have a really strong baseball market here. I mean, we’ve had baseball in the city for how long?

Michael Phillips:

Yeah.

Scott Bass:

Um, it’s been successful. The Squirrels have proven that right out of the gate. I mean, they put a lot of their own … I mean, obviously their, their, their community outreach has been pretty incredible and their marketing is, is amazing, um, but they’ve been leading the league or one or two in attendance every year since they’ve been here. Um, so, you know, I, the idea that Richmond would lose a team and then not be able to replace it. Now, maybe losing the team, losing The Squirrels would, would be a blow to our civic pride. And I, and I wouldn’t argue that point, but the idea that we couldn’t find a replacement or that, that Richmond suddenly would be devoid of sports isn’t really … I mean, as soon as Atlanta left, I mean, there were teams lined up looking to come to Richmond because it was an established baseball market.

Rich Meagher:

We’ll have more about CarMax Park when we come back on RVA’s Got Issues.

This is RVA’s Got Issues. We’re talking with the Richmonder’s Michael Phillips and Richmond Magazine’s Scott Bass about CarMax Park. VCU has a, a role to play here, right? The idea has always been, uh, I think since we’ve talked about a new stadium back 30 years ago, that VCU would play their games in the new baseball stadium, but so far, there’s no deal between VCU and the Squirrels to ensure that this is gonna happen. What, what’s going on here?

Michael Phillips:

Yeah, the original Diamond District Development Agreement said in the agreement that the Squirrels, VCU and the city would all work in good faith to make a deal happen. Uh, but there was a 2.4 billion dollar project that was relying on good faith and the good faith hasn’t worked out. VCU played baseball at The Diamond and now VCU w- you know, wants to move across the street. Now, at The Diamond, it was easy. Hey, come play your games here. It’s not a big deal. Uh, but of course, the Squirrels view Carmax Park as a year-round revenue generator. They’ve got suites, they’ve got concerts, they’ve got events, they’ve got weddings, and any VCU game you play there would necessarily detract from the amount of money they can make. So they want compensation for that. The city, of course, is owed rent, uh, VCU controls one of the parcels of land the city needs.

Everybody’s pointing at each other here waiting for somebody to blink.

Rich Meagher:

Yeah. Uh, and so how do we not work all this out ahead of time, Scott?

Scott Bass:

I mean, I think the problem has been it’s really, really hard to make the numbers work. Um, you know, and that’s why they had to do two separate bond issues. You know, the, the Squirrels are paying $3.2 million a year for the first 10 years.

Michael Phillips:

High, highest rent on all the minor league baseball.

Scott Bass:

Right. And then VCU’s gonna pay $400,000- How many, how many games does VCU play at the, um-

Michael Phillips:

About, about 30.

Scott Bass:

… at home?

Michael Phillips:

About 30 when you bake in Fall and-

Scott Bass:

So 30 home games for $400,000 a year.

Michael Phillips:

Yeah.

Scott Bass:

I mean, that’s, that’s not, that’s not cheap. Um-

Michael Phillips:

And VCU baseball, we should note, is not a money maker for VCU. They, they, they’re not-

Rich Meagher:

It’s not like their basketball games, right?

Michael Phillips:

It’s absolutely, it’s not like that at all.

Rich Meagher:

Yeah. So there’s, uh, if we haven’t already lost all of our listeners at this point, right? The TIF districts, right, the tax revenues, the, the lease agreements, the, the bond issues, right? This is super, super complicated. I mean, I think that the three of us probably have as good a handle on this as anybody in the city and I still don’t know everything that’s going on here. Um, why does this have to be so complicated?

Scott Bass:

It doesn’t have to be.

Michael Phillips:

<laugh>

Scott Bass:

And the reason why it’s so complicated in my opinion is that for the last 20 plus years, we’ve pitched this and tried to structure this deal to build a ballpark that wasn’t gonna cost anybody anything, which was a myth from the very beginning and that- the bubble on that got popped, um, when it became very clear early on that if you had to build the ballpark first, um, then you wouldn’t have the revenues there to pay off the debt on it, which basically forced the city, the mayor to, at the very last second, show up and say, “We’re gonna have to pay for it all ourselves.” And if we had known that, we could’ve done it a long time ago. Just think how long, you know, that, that property, that 67 acres could have been generating revenue for the city.

Rich Meagher:

So what do you think is then next here for CarMax Park for the Diamond District?

Michael Phillips:

Well, you’ve got a situation where the Squirrels essentially have, for all of Lou DiBella’s complaining, the Squirrels have won. They have a new stadium, it’s a beautiful stadium. Uh, it’s open, it looks great, people are going there every night. So I’m not too worried about the Squirrels. They got what they wanted out of this. I think VCU ultimately will get in, whatever those negotiations look like. I think everybody fundamentally understands it’s better for the city when, you know, those groups get along. For Richmond though, for the taxpayers, are we gonna get a development worthy of that space that generates enough tax revenue to pay those bonds, or are we gonna be on this show in 10 years talking about, “We gotta dip into the general fund, you know, they didn’t get the condos up in time, the market cooled, we missed the window, and now we’re all on the hook for this money.”

Scott Bass:

I’ve always kind of been confused when we talk about the, the development around it paying off the ballpark, because the way that’s structured, the general obligation bonds, which means that the money comes out of the general fund to pay off those bonds. So I, I don’t know that unless the city makes a very intentional, um, effort to sort of-

Michael Phillips:

Account-

Scott Bass:

… Account for just how this-

Michael Phillips:

…how much comes in.

Scott Bass:

… specific project-

Rich Meagher:

Yeah.

Scott Bass:

… on the 67 acres is doing, fairing in terms of tax revenue and how much it’s costing to pay off the bonds, I suspect they won’t do that, um, but technically speaking, it’s, it’s all coming out of the general fund anyway.

Rich Meagher:

Yeah. So in other words, we said we were gona pay off this credit card bill for CarMax Park with money from this specific area, but now it’s just gonna be blurred into the whole fund.

Scott Bass:

That-

Rich Meagher:

And we just gotta pay back the credit card no matter how much money’s coming in.

Scott Bass:

That’s my understanding … I think that’s a holdover from the, the original sort of idea. Like forever in a day, it’s been pitched as this thing’s gonna pay for itself. And that was one of the things they held onto because it sounds better, right? It makes you feel better to think that, oh, well, this is gonna pay for itself and all the development’s gonna just go and, and we’re all good, we’re in good shape. This wouldn’t happen anyway.

Michael Phillips:

Y- you know, looking at how the city finances things though, if, if the Diamond District gets up and running and generates enough annual tax revenue to pay those bonds, I do think you can score at a win, but we’re a long ways from there.

Rich Meagher:

Yeah. I mean, the language of, of a bad bet is something that was in your article, Scott, that I think an economist used, uh, right? And there are some people who argue that a sports arena, a sports stadium is always a bad bet, right? I read an economist, uh, from 20, 25 years ago who argued that a sports arena will probably produce as much revenue as a small grocery store, right? That it’s just not gonna be any kind of game changer. I mean, should Richmonders feel like suckers here? Should I feel like the sucker that I, I kind of feel like right now?

Michael Phillips:

Were you here when VCU made the final four?

Rich Meagher:

Yes.

Michael Phillips:

Everybody loved it. Everybody’s out in the streets partying. There, there’s an intangible togetherness that sports brings and I’ll, I’ll speak as the sports guy here that sports is uniquely qualified to provide an American life.

Rich Meagher:

Yeah.

Michael Phillips:

You know, like people love that civic pride and the, and the sense of this is our team, Nutsy’s our guy, VCU’s in the Final Four, whatever it is. Can you put a dollar value on that? You can’t and that’s why they’re so good at extracting money from us.

Rich Meagher:

<laugh> Like a Knicks moment, right? If, if, if the Squirrels have their Knicks moment over the next year or two, no one’s gona care about how much the stadium costs.

Michael Phillips:

Makes it go down smoother.

Rich Meagher:

Yeah. Unless you will care, Scott. <laugh>

Scott Bass:

I will always care, um, I think because it’s not that, you know, we shouldn’t have a ballpark or we shouldn’t find a way to build a ballpark. It’s couching it as an economic development project and the way we do it, which ends up we put a ballpark in maybe the wrong place or we structure it in such a way that we actually do lose more than we need to. You know, whenever you spend money on one thing, it means you’re not spending it on something else. So I do think we have to ask those kinds of questions because Richmond only has so much tax revenue. We’re landlocked in the city. When you take maybe the last undeveloped sort of big chunk of land in Richmond left and you devote, how many acres to a ballpark, is that really the best use of that property? We need new schools, we need new courthouse.

We’ve got a huge poverty problem that still needs to be addressed. So no, I, I think it really does matter.

Michael Phillips:

I do think it’s fascinating the big picture. I know you’ve had Danny on the show a few times. I would argue his signature achievement as mayor has been not proposing a big shiny thing so far, right?

Rich Meagher:

So far. So far. It’s early yet.

Michael Phillips:

And that is not to discount the things he’s doing in other areas-

Rich Meagher:

Yeah.

Michael Phillips:

… but that was a promise he made. I’m not going to be like these other guys chasing a legacy project, something with my name out front, uh, and he’s been good for that so far. I think the residents were asking for that.

Scott Bass:

Well, what, what has he been talking about recently in-

Michael Phillips:

Convention Center Hotel?

Scott Bass:

Convention Center Hotel. No one is safe from the big shiny object.

Rich Meagher:

Well, when, when they bring it up, uh, the three of us will be there to report on it.

Michael Phillips:

<laugh>

Rich Meagher:

Michael Phillips is co-founder of The Richmonder, Scott Bass is news editor at Richmond Magazine. Thanks to you both.

Michael Phillips:

Thank you.

Scott Bass:

Thank you.

Rich Meagher:

That’s our show. Thanks to our guests, Scott Bass and Michael Phillips. Tell us about your issues. Visit our website, RvasGotissues.vpm.org. Follow us on Instagram @RichGotissues or send us an email at [email protected]. Be sure to leave a review on your favorite podcasting platform. RVA’s Got Issues is produced by Max Wasserman and Rachel Dwyer. Script editing on this episode by Nicki Stein. Audio mixed by Steve Lack. Our theme music was composed by Alexander Hitchens. Shawn Freude is our executive producer. Steve Humble is VPM’s chief content officer. Graphic design is Rebekah Sausmikat’s passion. I’m your host, Rich Meagher. Thanks for listening.