City completes $11M initial land sale for mixed-use section of Diamond District

Construction underway on CarMax Park, which will replace the adjacent, nearly 40-year-old Diamond. (File photo courtesy Skyshots Photography)

Months later than originally planned, the City of Richmond has officially transferred the first portion of what’s planned to be dozens of acres of mixed-use development for the ballpark-anchored Diamond District project.

The city announced Tuesday that it has completed the sale and transfer of an 18-acre initial subphase to Diamond District Partners, the development team led by Thalhimer Realty Partners that’s driving the mixed-use portion of the 67-acre Diamond District.

As stipulated in a development agreement, the land that fills the site’s southeast corner and wraps around part of the new ballpark was sold for $11.4 million, the city said. The transaction was not yet reflected in city property records viewable online.

The development agreement, which City Council approved last year, called for the sale to occur last August, though it allowed for the date to be extended. Officials have said the additional time was needed to delineate boundaries and carve out new parcels for the different phases, which don’t match up with existing parcel boundaries.

Diamond District Partners also paid $500,000 to Richmond’s Economic Development Authority to help reimburse it for costs to administer the project’s solicitation process, the city said. That monthslong process led to the city’s selection of an earlier iteration of the Thalhimer-led group, which beat out 14 other teams that had vied for the project.

A lawsuit between the earlier group’s lead developers is playing out in court.

A rendering of the ballpark-anchored Diamond District development along Arthur Ashe Boulevard. (BizSense file)

The land transfer was the next needed step for the progression of the rest of the Diamond District development. The new CarMax Park stadium that’s set to replace The Diamond is under construction and scheduled for completion in 2026.

The 10 acres for the new ballpark remain owned by the EDA, which will lease CarMax Park to the Richmond Flying Squirrels. The ballclub’s parent company is leading the stadium’s development.

The Diamond District’s remaining 57 acres are to be developed in phases over several years, either by Diamond District Partners or potentially other developers.

Diamond District Partners is signed on to develop a 30-acre first phase, starting with the initial 18-acre subphase that’s to include a 180-room hotel, nearly 900 housing units with about 160 units for lower-income residents, 30,000 square feet of commercial space, and 6 acres’ worth of infrastructure and park space.

Phase 1A is shown in blue, Phase 1B in red and Phase 1C in yellow. (City documents)

Under the agreement, Diamond District Partners could end up paying $25 million for the entire first phase, though it is only committed to purchasing the first subphase. The group would have options to buy the rest of the land in the first phase: $5.7 million for 5.7 acres, and $7.9 million for 2.3 acres that includes the existing Sports Backers Stadium, which will be demolished.

Phase 1B, which includes part of the current Diamond property, is planned for 335 housing units, 124 of them for lower-income residents and 10 for-sale units, 12,400 square feet of commercial space, infrastructure and park space. That subphase would also involve the demolition of Sports Backers Stadium and The Diamond.

Phase 1C involves 467 housing units with 54 of them for lower-income residents and 14 for sale, over 100,000 square feet of commercial space, and infrastructure and park space.

After the 30-acre first phase is completed, the remaining 27 acres of the mixed-use development would be sold and developed in subsequent phases. The agreement gives Diamond District Partners first right of refusal on any offer the city might receive on other land in the project site, with the city agreeing to sell that land to the group at the offer received.

The mixed-use development will help the city pay for the new ballpark. The city has taken on the debt obligation for $170 million in bonds for the ballpark and first-phase infrastructure improvements. Tax revenue from the ballpark and initial development is to be used to pay off the bonds.

Minimum capital investment in the first phase overall is expected to total over $567 million. Diamond District Partners is committed to $300 million for Phase 1A, while Phase 1B would be $133.8 million and 1C would be $132.7 million.

Thalhimer principal Jason Guillot has said Diamond District Partners is aiming to start on the mixed-use development later this year. The city’s announcement said the group anticipates breaking ground on the infrastructure components in coming months pending permitting.

The post City completes $11M initial land sale for mixed-use section of Diamond District appeared first on Richmond BizSense.