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To amend City Code § 26-610, concerning the evaluation and expiration of the partial exemption of certain rehabilitated commercial or industrial structures from real estate taxation, for the purpose of extending the expiration date from June 30, 2026, to June 30, 2027.
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THE CITY OF RICHMOND HEREBY ORDAINS:
§ 1. That section 26-610 of the Code of the City of Richmond (2020) be and is hereby amended as follows:
Sec. 26-610. Evaluation of exemption program; expiration of division.
(a) The partial exemption program herein created shall be reevaluated, beginning on January 1, 2021, and every five years thereafter, by the Chief Administrative Officer, and the Chief Administrative Officer shall make a recommendation to the City Council as to whether or not the partial exemption program established by this division should continue in effect. The Chief Administrative Officer shall present the program evaluation results and recommendations to the City Council concerning the continuation or termination of the program on February 15 of every fifth year, beginning with February 15, 2021, that the program established by this division is in effect.
(b) The evaluation criteria shall include, but not necessarily be limited to:
(1) The number of applications submitted;
(2) The number of applications meeting the requirements of this division;
(3) The number, type, and description of properties qualifying for partial tax exemption under this division;
(4) The total dollar amount of the resulting assessment credit approved;
(5) The revenue impact on the City both with and without the existence of the program; and
(6) Any other quantifiable data that can be used to measure the overall effect of the program.
(c) This division shall expire on June 30, [2026] 2027, unless the Council adopts an ordinance extending this expiration date.
§ 2. This ordinance shall be in force and effect upon adoption.
City of Richmond
Intracity Correspondence
O&R Transmittal
DATE: May 12, 2026
TO: The Honorable Members of City Council
THROUGH: The Honorable Dr. Danny Avula, Mayor
THROUGH: Odie Donald II, Chief Administrative Officer
THROUGH: Tanikia Jackson, DCAO Finance and Administration
THROUGH: Letitia Shelton, Director, Department of Finance
THROUGH: Meghan Brown, Director, Budget
THROUGH: Sharon Ebert, DCAO Economic Development & Planning
FROM: Angie Rodgers, Director, Department of Economic Development
RE: Extension of partial commercial real estate exemption program
ORD. OR RES. No.
PURPOSE: To amend City Code §§ 26-610, concerning the expiration of the division, for the purpose of extending the expiration date of the partial exemption of rehabilitated commercial, or industrial structures from real estate taxation from June 30, 2026, to June 30, 2027.
BACKGROUND: Chapter 26, Division 11 of the Richmond VA Code of Ordinances lays out the conditions in which certain commercial properties (i.e., retail, office, flex/industrial), or the commercial portions of mixed-use properties, receive a temporary partial exemption from new, incremental property taxes resulting from rehabilitation. Per the code, the program must be evaluated and extended every five years, or it will expire on June 30, 2026. The program is administered through joint efforts between the Dept of Economic Development (DED), the City Assessor’s Office, and the Dept of Finance.
The City hired the consulting firm HR&A to evaluate the program in accordance with the code's criteria. The report is attached. Findings include the following:
• Thirty-four applications have been submitted through the Department of Economic Development since 2021, of which 19 have been completed, 12 are within their rehabilitation period, and three have expired.
• While buildings must be 20 years or older to be eligible for the program, the median year of rehabbed properties was considerably older - built in 1923.
• One-third of the applicants were located in downtown Richmond.
• Most participating properties were small to mid-sized buildings, with a median property size of 5,700 gross square feet (GSF). The program has more recently been used to encourage the adaptive reuse of large downtown vacant office buildings.
• Property values have increased by $11.4M in the renovated properties.
• While the abatement temporarily reduces tax collections on new improvements, property tax revenues grow over time, with an estimated net present value of $10.1M in incremental property taxes generated compared to the baseline over the next 30 years. When combined with additional sales, meals, and hotel tax revenue associated with the renovated properties, tax revenue is estimated to have a net present value of $63.1MM over the next 30 years.
The program is an important tool to encourage redevelopment and adaptive reuse. The continuation of the division will be an essential component of the City’s commercial corridor strategy. The City is requesting a one-year, instead of a five-year, extension because it intends to bring for Council consideration additional updates to further tailor the program to encourage the redevelopment of small mixed-use buildings and properties on the City’s derelict building list, support the inclusion of affordable housing in mixed-use projects, and improve program efficiency.
STRATEGIC INITATIVES AND OTHER GOVERNMENTAL: Department of Economic Development, Department of Finance, and Real Estate Assessor’s Office.
FISCAL IMPACT: This program does not leverage any existing tax revenue. Parcels in the program will generate an estimated $3.7M in net new property tax revenue and an additional $14.9M in other commercial taxes over the next 15 years.
DESIRED EFFECTIVE DATE: Upon Adoption.
REQUESTED INTRODUCTION DATE: June 8, 2026
CITY COUNCIL PUBLIC HEARING DATE: June 22, 2026
REQUESTED AGENDA: Consent
RECOMMENDED COUNCIL COMMITTEE: Finance and Economic Development Standing Committee
AFFECTED AGENCIES: Department of Economic Development, Department of Finance; City Assessor’s Office
RELATIONSHIP TO EXISTING ORD. OR RES.: ORD. No. 2022-238, ORD. No. 2020-148
ATTACHMENTS: HR&A Analysis of Partial Exemption Program
STAFF: Katie McConnell, Department of Economic Development
Jessica Singer, Senior Policy Advisor, Office of the Senior Deputy Chief Administrative Officer for Finance and Administration