Judge dismisses Paul Goldman lawsuit, clearing way for Diamond District stadium (2024)

A judge on Friday tossed out a lawsuit that had the potential to wreck the city of Richmond’s plan to build a new minor league baseball stadium. The denial could pave the way for the city to issue bonds later this month and break ground next month.

If the plaintiff, Richmond lawyer Paul Goldman, appeals, doing so could delay the project several weeks, costing the city millions of dollars.

Goldman sued the city in an effort to force a referendum in which voters in November would have to approve the city’s financing plan for the stadium. He is considering whether to appeal.

Asked what he will do next, Goldman answered, “What are you supposed to do?”

His comment came after Richmond Circuit Court Judge W. Reilly Marchant essentially ruled that if Goldman wants to force a referendum, Goldman must circulate a petition and gain roughly 11,000 signatures in just a matter of days. That's practically impossible, he said and would require hiring a staff at a cost of $60,000.

“It’s not fair,” Goldman said.

Meanwhile, the city is now one step closer to realizing a new stadium on North Arthur Ashe Boulevard to replace The Diamond.

“We are full-speed ahead on delivering a world-class baseball stadium and an exciting new neighborhood for all to enjoy,” Mayor Levar Stoney said.

Last month, the City Council approved a new financing plan for the stadium. The city intends to issue $140 million worth of bonds to pay for stadium construction. Tax revenue collected from real estate, sales and meals in the neighborhood would be used to pay off the debt.

Under the worst-case scenario, if the revenue does not materialize, the city will have to pay off the debt by raising taxes or cutting services. City leaders say the chance of that happening is low.

Residents of the city of Richmond want a new stadium, Stoney has said. Members of the council approved the financing plan 6-0.

But Goldman believes the financial plan isn’t in the city’s best interest. He filed a lawsuit hoping to force the city to hold a referendum.

Deadline to issue bonds

Time is of the essence. If Richmond does not issue the bonds by the end of June, a new law will take effect that prohibits the city from capturing the state sales tax collected in the neighborhood. If the city sells the bonds before the new law takes effect on July 1, it can reap all of the sales tax for the life of the project, valued at $24 million.

If the city does not begin construction this summer, Major League Baseball could pull the Flying Squirrels out of Richmond. MLB repeatedly emphasized it wants the new stadium ready for the 2026 season.

Goldman’s decision on whether to appeal is pivotal to the city. If he appeals, the city will likely lose the $24 million.

If a Richmond resident wants to force a bond referendum, the resident must collect roughly 11,000 signatures in a month. That’s impossible, Goldman said, which is why no one has done it since the law was written in 1998.

“They are restricting my right to vote,” said Goldman, referring to the city. He called the number of signatures needed “an impossible task worthy of Hercules.”

Forcing a bond referendum should meet a high bar, said Wirt Marks, a lawyer for the city. Requiring a large number of signatures weeds out unnecessary objections, and other cities have comparable requirements, he said. Plus, the short period of time to collect signatures is necessary because bond decisions are made with market conditions in mind.

But the city’s charter is unclear about how many signatures are needed. Goldman pointed out to the court that the charter does not clearly state the number of signatures.

Marks said that when the law was written, legislators made a mistake and never fixed it. A clerical error should not invalidate legislation, he added.

Marchant ruled that because there are no other provisions in the law that mention the number of signatures needed to force a referendum, another provision that requires 11,000 signatures can be considered the correct one.

Goldman also wanted the court to compel the city to explain exactly what wording Goldman would need on his petition. Goldman said the law allows the city to reject his petition if it does not match certain specifications.

“Why should I have to guess” about the wording, Goldman asked the court.

Marchant shot down this request, saying it was too hypothetical. If Goldman were to assemble a petition and the city were to reject it, Goldman could then sue on those grounds.

Goldman might take his broader argument to federal court. He says it is unconstitutional that in Virginia, if a county wants to float bonds, the decision must gain approval from voters through a referendum. But a city can issue bonds without a referendum.

As a city resident, Goldman said he is being disenfranchised and that the city is too scared to hold a vote.

Taking such an argument to federal court would not stop the city from issuing the stadium bonds.