The city of Richmond will give CoStar Group Inc. a grant worth several million dollars, a recognition of the company’s plan to build an office tower expected to generate more than $30 million in new tax revenue.
Richmond City Council on Monday approved an ordinance that will refund some of CoStar’s real estate and business property taxes after the 26-story building is complete.
“This project is an incredible success story for the city,” said Leonard Sledge, Richmond’s head of economic development.
The real estate analytics company already received a grant from the state worth $15 million, which CoStar has used toward building construction. Now the city is offering tax rebates for 10 years after the tower is built in exchange for certain commitments from the company.
People are also reading…
For the first three years, the city will refund 75% of CoStar’s new real estate taxes and all of its new business property tax. For the following seven years, the city will give back a smaller portion of CoStar’s tax bill. The city taxes businesses for property such as furniture and computer systems.
It’s unclear how much the tax credits will be worth, but they’ll save CoStar at least several million dollars. A business that owns a building assessed at $450 million would pay more than $5 million annually in real estate taxes.
To receive the credits, CoStar must hire a minimum number of employees and make a certain capital investment. It also must attempt to devote a quarter of the investment to small, women- and minority-owned businesses.
In 2021, CoStar announced plans to build a $460 million, 26-story building at 501 S. Fifth St., near Brown’s Island. It will be the city’s tallest skyscraper and will feature an auditorium, roof terraces, retail space, restaurants and almost 3 acres of green space.
It also will have a port for drones, Sledge said. CoStar has the largest private fleet of drones in the country, he added. The building also will be equipped with transparent solar panels in the windows, known as photovoltaic glass.
The tower is scheduled to open in late 2025 or early 2026 and is expected to generate $31 million in tax revenue to the city over 10 years.
CoStar currently employs 2,100 people in Richmond and aims to eventually have 4,000. The average wage here will be at least $85,000, according to city documents.
The company, which owns Apartments.com, Homes.com and other sites, controls another nearby property. In 2022, it purchased 901 Semmes Ave., on the south bank of the James River, for $20 million.
“We love being here in Richmond,” Nadia O’Dea, the company’s director of corporate real estate, told city council.
This week, CoStar announced it intends to purchase a California-based 3-D technology company called Matterport for $1.6 billion. It’s unclear if the acquisition will impact the local workforce.
In February, CoStar said it would move its corporate headquarters from Washington to Rosslyn in Arlington County.