The Richmond Center – A Regional Success

Introduction
Many regions of the United States have been criticized in the past for the lack of cooperation between adjacent local governments.  The usual theme of this criticism is that economies of scale can be achieved and that more effective local services can be delivered if problems and opportunities are addressed on a regional basis.  
In 1995 David Rusk’s book, Cities Without Suburbs, was published.  It argued that benefits have accrued to regions where local governments have cooperated and that regions have suffered where local governments were unwilling or unable to cooperate.    
The Richmond, Virginia region can point to a number of regional cooperation efforts that have succeeded, but have not received the level of publicity that they deserve.  By far the largest and most impressive of these success stories is the expansion of the Richmond Center.
The Need for A New Convention Center
	The Richmond Center competes with such other convention centers as Baltimore, Charlotte, Cincinnati, Cleveland, Columbus, Fort Lauderdale, Greensboro, Jacksonville, Louisville, Nashville, Norfolk, Providence, Raleigh, Savannah, Tampa and Virginia Beach.  Using convention and meeting events that occurred in 1999 for comparison, the Richmond Center ranked thirteenth among these seventeen localities capturing only 2.3 percent of the events and .7 percent of the total attendance. 
In 1997 when most of the analysis on the proposed Richmond Center expansion was done, the exhibition square footage in some of the competing convention centers was:

						   Exhibition 
	  City				Square Footage
		Charlotte				280,000
	Baltimore				300,000
	Raleigh				120,000
	Washington				378,000
	Greensboro				168,500
	Philadelphia				440,000
	Pittsburgh				131,000
	Nashville				119,000
	Norfolk			 	  58,000
	Virginia Beach		 	  60,000
	Richmond Center		  	  62,000
The recently completed expansion of the Richmond Center has increased the facility’s total square footage from 115,000 square feet to 605,000 square feet, the Exhibition Hall square footage from 62,000 square feet to 180,000 square feet and the land area occupied downtown from three acres to fourteen acres.  It was projected in 1997 that the Richmond Center expansion would add 1,400 new jobs to the Richmond regional economy, that convention and meeting attendee spending would be $90,100,000 annually and that additional state tax receipts would be  $6,500,000 annually.  
The expansion of the Richmond Center also contributes to the redevelopment of downtown Richmond.  Since the early 1980’s investment in downtown Richmond has exceeded $1.5 billion in projects such as Shockhoe Bottom, Shockhoe Slip, Main Street Station, The Civil War Visitors Center, The Canal Walk, expansion of Virginia Commonwealth University and Virginia Biotechnology Park. Several other projects are being planned in the continuing revitalization of the City of Richmond.  
Community Support
Community support for the expansion of the Richmond Center was a prerequisite for proceeding with the project.  Opposition from surrounding communities could have killed the project.  The most sensitive issue in this regard was the impact of the expanded Center on the Jackson Ward community.  Jackson Ward is one of the oldest African-American communities in the United States and is still active.  A few Jackson Ward properties would need to be acquired in order to complete the project.  Close cooperation with the Jackson Ward community was essential to accomplish these acquisitions.
Extensive time was spent explaining the project to many community organizations in the Richmond region.  These meetings ultimately resulted in public support for the project from community organizations such as the Virginia Tourism Corporation, Richmond Metropolitan Convention and Visitors Bureau, Greater Richmond Chamber of Commerce, Greater Richmond Hotel/Motel Association, Virginia Hospitality and Travel Association, Retail Merchants Association of Greater Richmond, Virginia Destinations, Maymount Foundation, Metropolitan Richmond Sports Backers, Richmond Renaissance, Richmond Regional Planning District Commission, Fan District Association, Colonial Downs Race Track, Greater Richmond Partnership, Virginia Tourism Corporation, Virginia Biotechnology Research Park, Junior Achievement of Central Virginia and  the travel and tourism bureaus of the Cities of Williamsburg, Charlottesville, Petersburg and Fredericksburg, and the County of Spotsylvania.  The Greater Richmond Hotel/Motel Association was particularly important because an increase in the lodging tax would be necessary to fund the project. 
Meetings were also held with the State Secretary of Finance, the State Treasurer and the Richmond region’s members of the General Assembly in order to explain the need for the project and to request help in obtaining state funding.  Local officials also met with the executive management of the Richmond Times Dispatch newspaper in order to provide them with information on the project prior to major public announcements.         
Organization of the Authority
	In the late 1980’s and early 1990’s there was much discussion in the Richmond region about the need to build a new convention center.  In 1995 the Metro Richmond Convention and Visitors Bureau Board of Directors created a committee to look into the possibility of expanding the Richmond Center.  From its inception until 1998 the Honorable John Hager chaired this committee; he was then a Vice President with American Tobacco Company and from 1998 to 2001 was the Lieutenant Governor of the Commonwealth of Virginia.  Mr. Hager continues to serve on the Authority board.   
	In December of 1997 the Greater Richmond Convention Center Authority was created by votes of the City Council of Richmond and respective County Boards of Supervisors in Chesterfield, Hanover and Henrico pursuant to the authority given by the Public Recreational Facilities Authorities Act, Chapter 56, Title 15.2 of the Code of Virginia of 1950 as amended.  These localities represent a population of over 800,000 while the Richmond-Petersburg SMA is one million in population.  The stated purpose of the Authority is for acquiring, constructing, equipping, maintaining and operating a regional convention center facility.  Under state law the Authority has the ability to issue bonds for the purpose of financing construction.    
Funding the Project
In the 1998 session of the Virginia General Assembly legislation was passed to allow the four Richmond localities to increase their lodging tax to a maximum of 8 percent for economic development and tourism.  The additional lodging tax would be used to finance the expansion of the Richmond Center.  
Based primarily on the credit characteristics of the four member localities, the financial structure for funding the expansion of the Richmond Center and the strength of the Richmond region’s economy the bond rating agencies rated the Authority bonds as follows:
			Fitch			A-
				Moody’s		A3
				Standard & Poor’s	A-
These ratings were very good considering that no general obligation or moral obligation for the debt was pledged by the member localities.
	Prior to the localities increasing their lodging tax the Authority surveyed the competing convention localities to be sure that the Richmond region’s tax rates would be competitive.  With a 4.5 percent sales tax and an 8 percent lodging tax, the Richmond region would have a 12.5 percent tax on lodging bills.  That made the region very competitive with other similar regions.   

				Tax Rate Competition
			Charlotte			12%
			Baltimore			12%
			Raleigh			12%
			Washington			13% + $1.50 per night
			Greensboro			12%
			Philadelphia			13%
			Pittsburgh			12%
			Nashville			12.25%
			Norfolk			11.5%
			Virginia Beach		10% plus $1.00 per night
In December of 1997 then Governor George Allen, now a United States Senator, announced that he would include in his Biennial Budget for Fiscal Years 1998-2000 $10 million in state funding for the Richmond Center expansion.  In his comments Governor Allen said, “This project is a perfect example of what true regional cooperation can accomplish.  Motivated people and their elected leaders in Richmond, Henrico, Hanover and Chesterfield came together to effectively address a potential development opportunity—on their own initiative, and without any outside coercion or mandate from the State or anyone else.”   This funding was recognition of the positive impact that a new convention center in the state capital would have not only on the region, but also on the state as a whole.    
	In February of 2000 the Authority issued $158,415,000 in bonds to fund the largest regional construction project ever undertaken in the State of Virginia.  The bonds are obligations of the Authority, not the member localities or the state.  The security for the bonds is the lodging tax expected to be paid to the Authority from the member localities.  
Construction of the Expanded Richmond Center
	The expanded Richmond Center occupies five city blocks.   Property had to be acquired before construction on the expansion could begin.  Some of the more difficult acquisitions were the old Thalhimer’s Department Store warehouse at 505-519 North Fourth Street, the parking lot of the Marriott Hotel on Broad Street and several parcels in Jackson Ward, some of which had historic structures resting on them.  Construction began in January of 2000 and was completed in February of 2003.  The Center already has a number of major conventions scheduled including the National Association of Counties in 2007 and the International City/County Management Association in 2008.  
Future Challenges and Opportunities   
It was noted in the credit review of the Authority bonds that the long-term competitiveness of the expanded Richmond Center will depend on securing another convention-sized hotel near the Center.  This will require the construction of a new hotel or the major expansion of an existing hotel close to the Richmond Center in order to add several hundred rooms to the downtown hotel room inventory.
Redevelopment is also an issue in the commercial area along Broad Street near the Richmond Center.  Plans include a possible theatre district, restaurants and new commercial establishments.  The City of Richmond recently created a Community Development Authority to facilitate these improvements.   
The Year 2007 marks the 400th anniversary of the founding of Jamestown.  This event is being promoted as the birth of a nation and will present a rare opportunity to increase tourism to the state and to market the new Richmond Center as a convention and large meeting destination.  The anniversary will complement the state’s already substantial attractions such as the Virginia Beach resort area, Colonial Williamsburg, Revolutionary War battlefields, Civil War battlefields, the Shenandoah Valley, Washington, D.C., and the telecommunications industry in Northern Virginia, among others.  The National Association of Counties convention in 2007 and the International City/County Management Association convention in 2008 will create a synergy with the 400th anniversary of Jamestown that should get the expanded Richmond Center off to a good start.   
Conclusion
	The grand opening of the expanded Richmond Center was held in February 2003.  The expansion of the Richmond Center started with the vision of leaders in the Richmond region that led to a sound financial plan for funding the construction that was borne out by the ready acceptance of the Authority’s bonds by the financial community.  
	Numerous people in local government, state government and the private sector contributed to making the new Richmond Center a reality.  The project required commitment from four diverse local governments.  The City of Richmond and the Counties of Chesterfield, Hanover and Henrico have completed a joint venture that will benefit the Richmond region and the State of Virginia for many years to come.  The Richmond Center expansion is a model for regional cooperation among local governments and is an example of what can be accomplished when a project that will benefit the public is matched with people who are dedicated to public service.