RICHMOND, Va. (WWBT) - The proposed $1.5 billion development for Richmond's downtown Navy Hill area is coming under fire after a federal complaint was filed against the group behind the plan. The 26-page IRS complaint alleges that the NH District Corporation is breaking IRS laws to serve its own interests, rather than act as a non-profit charity.
Author and Richmond native Jeff Thomas alleges the NH District Corporation is operating more like a lobbying firm, even though it’s set up as a 501(c)(3) charity. But stakeholders and representatives of the group say Thomas is wrong.
Thomas cites public campaigns by NH District Corporation to gain support for the Navy Hill project, which would include a new arena to replace the Coliseum, hotel, apartments, Blues Armory renovation, retail and office space and GRTC bus station. The proposal is backed by Richmond Mayor Levar Stoney. The lobbying involves mass emails and social media posts.
Thomas says the lobbying would ultimately benefit the stakeholders behind the proposal. He also called out the group for monetarily reimbursing citizens attending public meetings in support of the project.
Allan Chipman is a community advocate with Initiatives of Change USA. Chipman is working on the complaint with Thomas, challenging whether or not NH District Corporation is truly acting as a charity.
“I would have a question as far as what form of charity or public benefit are they actually providing?” said Chipman.
Jeff Kelley, a representative for NH District Corporation, denies breaking IRS rules and says its actions have been in line with all 501(c)(3) laws. The group says the complaint misleads Richmonders into believing that the group cannot advocate for the Navy Hill project, which is untrue.
Part of a statement sent to NBC12 reads:
“This complaint is another attempt to keep the status quo in place and to discredit philanthropic attempts by the NH Foundation and others to make a difference in the lives of Richmonders."
Half of the project's surplus revenue is slated to fund city schools.
The IRS website says charities can lobby for their cause. However, too much lobbying or if a substantial part of the group’s activity is to influence legislation can cause a charity to lose its tax-exempt status.
The complaint also alleges that NH District Corporation didn’t release its public financial records to Thomas when initially requested.
Kelley said that the group agreed to release the documents, but asked that Thomas make his request in writing through physical mail.
NH District Corporation’s tax records, which were ultimately posted on the group’s website, show a $1.5 million donation to the group from Dominion Energy Services.
Dominion Energy CEO Tom Farrell is the chairman of NH District Corporation. The connection is now raising eyebrows.
“The contributions from Dominion Energy and Atlantic Union Bank listed on Navy Hill’s Form 990 are not ‘gifts’ but rather advances on payment for future potential marketing opportunities. These advances were made by two Richmond-based corporations because they believe in the purpose of redeveloping Navy Hill, which will ultimately make our city a more attractive place for Richmonders to live, establish careers and enjoy all that a more complete downtown will have to offer,” wrote Kelley in a statement to NBC12.
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