Henrico County issues default notices for $2.3B GreenCity developers

Henrico County sent two default notices to developers of the planned GreenCity mixed use development. The development was proposed for 2020 as an environmentally-friendly development with a 17,000 seat sports and entertainment venue at its center. The development was to have two hotels, 600 rooms each, 2.2 million square foot of office space, 288,000 square feet retail space, 2100 residential units and green spaces and plazas.

Green City Partners, a development entity led by Michael Hallmark, of Los Angeles’ Future Cities, and Green City Development Corp. LLC, headed by Susan Eastridge from Falls Church, Massachusetts, and Green City Partners, a development entity led jointly with Michael Hallmark.

A March 3 default notice states that Green City Development Corp. did not make the final payment for the arena planned on the 93-acre site, which was the former Best Products headquarters. More than $5.22million was due by February 28.

Henrico County manager John Vithoulkas sent the developers on February 15 a notice a default in the development agreement between Henrico County, the EDA, and the developers. This was sent after a notice for non-performance sent in December 2024. Green City Partners was given a 60-day period of time to correct the nonperformance under the development agreement.

The agreement for the purchase of real estate between the county’s economic development authority (EDA) and the developers stipulated that an initial payment in the amount of $500,000 was due on February 28, 2023 and a second installment of the same sum due on February 28, 2024.

GCDC is entitled to a 10-day period of time in which it can make up the payment if they have not received the notice by March 3. If the developers do not make the payment the EDA can repurchase the undeveloped property. It has “all the rights and remedies that are available under law and equity.”

The notice states that if developers do not cure the default in the specified time, “the EDA may exercise its rights under the agreement of purchase, including without limitation the right to exercise a repurchase option.”

The EDA must give the developers a 30 day notice before the repurchase is made. The EDA will pay the price per acre that was paid by the developers on the number acres of property it repurchases.

The agreement allows the county the right to purchase the property after the default notice for non-performance, but it must begin negotiations within seven days and end within 30 days.

Vithoulkas stated in a press release that “we included extensive provisions for protecting the interests of Henrico County, our taxpayers and Green City Partners when we entered agreements with Green City Partners or Green City Development Corporation.” “Put simply, GreenCity developers did not perform according to the terms and conditions of the agreements,” Vithoulkas said in a statement.

He added, “We think it’s the right time to return the Best Products Property to the County as per the agreements.” “As county, we are still bullish about the idea of a large mixed-use development in this exceptional location. We believe that it’s perfectly suited for a privately funded venue for sporting events and concerts, and other entertainment.”

Eastridge declined comment because the cure period is still ongoing. Hallmark has not responded to our request for comment.

Vithoulkas alleged in the nonperformance notice dated Dec. 16, 2024 that the developers failed to meet their obligations under the agreement, by failing to finance or schedule the project, “in a commercially reasonable manner, using good faith efforts to advance development of the project on a timely basis.”

The notice lists a number of development plans that the developers have not completed or for which they have not made progress. The EDA and Green City Partners will renegotiate the real estate agreement in November 2022 for the Best Products Site, creating a three-payment plan.

The notice states that “At the close of 2023, Developers did not have any financing secured, nor had they completed any design or started any construction on the project.” The notice also states that the project has not progressed in this year (2024).

According to the notice, Green City Partners originally intended to buy the Scott Farm property (to the north) and include it in GreenCity’s overall development when the county granted the rezoning for Best Products and Scott Farm in October 2021.

The progress of residences

Eagle Partners — and contributed more than $18 million to the $35.1 million Scott Farm property purchase that closed on August 31, 2023. The agreement also included a leaseback of part of the property to the EDA for use as additional parking at GreenCity.

Eagle hoped to begin construction in 2025, Cari Tretina, the county manager’s chief of staff, told Virginia Business then.

In 2023, the county, EDA and Henrico Sports and Entertainment Authority purchased adjacent St. Gertrude’s Property “for additional land which could be developed in conjunction with the project.”

In January 2023, the county created a Community Development Authority to support GreenCity’s public infrastructure. This included issuing bonds up to $295,000,000, backed by taxes and assessments from development on the Best Products property. However, because development has not yet begun, CDA funding is limited to the sale of the property.

In December 2023, the county created a CDA 2 to provide infrastructure for public use. This included Best Products, Scott Farms and St. Gertrude’s properties.

The notice concludes that “developers have failed to make commercially reasonable efforts in order to advance the project over the last four years despite the extraordinary support provided by the County.” This failure cannot be excused and is not attributable to external forces. Many other commercial, multifamily and residential developments in the County have been started and completed during the same timeframe. Problem-plagued projects

Hallmark and Eastridge, the developers of the Crypto.com Arena in Richmond (formerly Staples Center) have failed to deliver several projects. Hallmark was to be the lead developer of the $1.4billion Navy Hill project that would have replaced the shuttered Richmond Coliseum. However, Richmond City Council voted against the project in early 2020 after a major backlash from residents.

Hallmark and Eastridge also were part of the team who proposed for a second project downtown Richmond, in 2021. The proposal was a $325-million VCU Health System Medical Office Tower with other mixed use development. However, VCU Health pulled out of the agreement in 2023.

Future Cities, a company in which Hallmark is also a founding member, has also proposed converting a historic substation located in Richmond’s Carver neighborhood into a mixed use development named Carver Station, with a micro-retail, food hall and coworking space. Future Cities bought the property in 2021. Richmond Planning Commission recommended approval of the special use authorization in August 2023. The City Council adopted it on September 2023. As of March 2019, there is no progress visible.