Rao: VCU Health wants to end $56 million payment to Richmond (2024)

Virginia Commonwealth University Health is seeking to terminate a deal that pays the city of Richmond $56 million, VCU president Michael Rao said Wednesday.

The health system agreed to give the city a payment in lieu of taxes, or PILOT, as part of a failed redevelopment project at the Public Safety Building downtown.

State lawmakers have called for VCU Health to end the payments, but Mayor Levar Stoney objected, saying the health system should pay what it contractually owes.

Rao: VCU Health wants to end $56 million payment to Richmond (1)

“The answer is yes, we are seeking to pull those back,” Rao said Wednesday.

Rao met with the Richmond Times-Dispatch’s editorial board for a wide-ranging discussion that included the fallout of the health system’s failed plan to redevelop the Public Safety Building, a potential racial literacy requirement, student safety and the future of the university.

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Rao, 57, VCU’s president since 2009, oversees a university and health system with more than 53,000 employees and two annual budgets that spend a combined $4.7 billion annually. It’s a job for which he earns about $708,000 a year.

VCU Health redevelopment

In 2021, VCU Health entered into an agreement with the city of Richmond and a developer called Capital City Partners to reimagine the Public Safety Building at East Clay and North Ninth streets for $325 million.

But the deal fell through, and VCU Health paid $73 million to exit.

As part of the contract, the health system committed to pay about $2.25 million annually over 25 years to replace the tax revenue the city would have received from selling the land to a private business. As a state entity, VCU and VCU Health do not pay real estate taxes to the city. Even though VCU Health does not occupy the property, it is still cutting the city a check.

Demolition of Richmond-owned building to begin in 1-2 weeks

Earlier this year, lawmakers drafted budget language calling for VCU Health to negotiate a termination of the contract. Given that lawmakers and Gov. Glenn Youngkin haven’t agreed to a budget, the language has not been put into effect.

A spokesperson for Stoney on Wednesday referred to the mayor’s previous comments, when he said VCU Health should pay what it legally committed to pay.

A significant portion of real estate within the city generates no real estate taxes. According to the city, one-fifth of its real estate is tax exempt, including state and federal property, churches, city government buildings, schools and other nonprofits. The city would gain $100 million in tax revenue annually if those properties paid the real estate tax. Still, the city services those parcels with water lines, sewer, police and fire departments.

“Just because VCU Health System has had limited responsibility for paying real estate taxes historically does not mean that’s the way it should always be,” Stoney said last month.

Rao declined to address Stoney’s position Wednesday, saying discussions between the health system and the mayor should remain private.

For more than a decade, VCU Health has pursued the Public Safety Building property. But it is no longer interested in building a new dental school there – it has chosen another location. The Public Safety Building will always be a property of interest because of its key location adjacent to the health system campus, Rao added.

Though the university gets a free pass on real estate taxes, it provides many benefits to the city, Rao said. Students and staff who live off campus contribute toward property taxes, restaurant visitors pay meals taxes and large swaths of land have been redeveloped.

“A lot of success the city sees is because of VCU,” he said. “I feel really good about what VCU contributes to this city.”

Racial literacy

VCU’s faculty has suggested requiring all students take a class on race. The discussion was heightened earlier this year when Gov. Glenn Youngkin requested that VCU send its racial literacy curricula to the administration for review.

Rao said he has not discussed the classes with Youngkin, and the governor’s administration has done nothing more than review the class material. Rao is not worried that the governor will try to dictate what students will learn.

Rao: VCU Health wants to end $56 million payment to Richmond (2)

“I have not talked to the governor at all about this,” he said.

Rao declined to say if he supports the racial literacy requirement, noting that the decision is the purview of the board of visitors, which is considering the topic. One member of the board, Peter Farrell, said he does not like forcing students to take classes that do not advance their careers.

“It’s money and time we’re taking from them,” said Farrell, who made his comments at a board meeting this month in regard to another class the university requires called Focused Inquiry.

Even if the board strikes down a requirement to take the classes, they will still be available to interested students. Rao said he supports the classes, which he said reflect historical reality.

“I have great faith in our faculty colleagues,” he said. “They are teaching real history, not history that’s been prescribed or revised in any way.”


Last year, two student pedestrians were struck and killed by cars on or near campus, leading VCU police to begin a traffic safety campaign and write more tickets.

Rao said he appreciates the city’s installation of speed bumps in and around campus – the university does not own the roads that cut through campus, and VCU has no say about red lights or speed limits.

Though the city has made an effort to improve pedestrian safety, Rao wants more. He would like pedestrians to have the ability to change traffic lights by pushing a button, so they do not have to wait to cross the road. He would prefer to see better access to campus via bicycle, and strong access via public transit.

University’s future

More than ever, students want their time in college to prepare them for their careers, Rao said. VCU’s engineering and business schools have grown, while the college that houses humanities has lagged.

While the university has spent months considering how to reposition its academic structure, Rao emphasized the humanities will not be eliminated.

“They’re the thinkers,” he said. “They’re the ones who ultimately can do anything well.”

In a perfect world, every student would receive multiple paid internships before they graduate, he said. Instead of working an internship in addition to taking classes, the internship should provide credits toward graduation.

VCU’s campuses have grown significantly in Rao’s tenure. In recent years, VCU Health built the Adult Outpatient Pavilion and a tower for the Children’s Hospital of Richmond. The university reimagined West Grace Street with new residence halls and built a massive new dorm, the Gladding Residence Center, on West Main Street.

As the city’s real estate fills up, buildings likely will need to be erected higher in the future, Rao said. Plans for a new student union could reflect that reality. The university will be careful to make sure taller buildings fit into the existing landscape, he added.

Rao said he does not spend much time thinking about his personal future. Rao was quite young, 33, when he was named president of Central Michigan University. He joined VCU in 2009, making him one of the state’s longest-tenured presidents.

Instead, he spends more time determining the university’s vision, fundraising and meeting with lawmakers. He frequently considers the VCU’s future, its relationships and partnerships.

“For me, it’s an honor,” he said. “It’s a privilege and I never take it for granted.”

Today in history: April 25

1507: Martin Waldseemueller

Rao: VCU Health wants to end $56 million payment to Richmond (3)

1859: Suez Canal

Rao: VCU Health wants to end $56 million payment to Richmond (4)

1990: Hubble Space Telescope

Rao: VCU Health wants to end $56 million payment to Richmond (5)

1945: Elbe River

Rao: VCU Health wants to end $56 million payment to Richmond (6)

1945: The United Nations

Rao: VCU Health wants to end $56 million payment to Richmond (7)

2002: Lisa "Left Eye"

Rao: VCU Health wants to end $56 million payment to Richmond (8)

2017: Ivanka Trump

Rao: VCU Health wants to end $56 million payment to Richmond (9)

2019: Joe Biden

Rao: VCU Health wants to end $56 million payment to Richmond (10)

2021: Chloé Zhao

Rao: VCU Health wants to end $56 million payment to Richmond (11)

2022: Elon Musk

Rao: VCU Health wants to end $56 million payment to Richmond (12)


Rao: VCU Health wants to end $56 million payment to Richmond (13)

Eric Kolenich (804) 649-6109



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Rao: VCU Health wants to end $56 million payment to Richmond (2024)


Rao: VCU Health wants to end $56 million payment to Richmond? ›

VCU Health is seeking to exit a $56 million payment to the city of Richmond, part of the failed redevelopment of the Public Safety Building. VCU president Michael Rao discussed this, the racial literacy requirement and other matters with the RTD on Wed.

Did lawmakers want VCU health to cancel $56 m in payments to city? ›

State lawmakers have directed Virginia Commonwealth University Health to terminate an agreement that pays the city of Richmond almost $56 million for a building project that never happened.

How much does VCU President Rao make? ›


In June, VCU's board of visitors approved raising his salary to $708,000, citing his fundraising abilities and stewardship of the university and its medical facilities since the pandemic.

How many people are employed by VCU Health? ›

It is the largest employer in Richmond with more than 25,000 employees at VCU and VCU Health, and it supports approximately 58,000 jobs in Virginia.

Does VCU pay taxes? ›

Federal Excise Tax. VCU, an instrumentality of the Commonwealth of Virginia, is generally exempt from paying most federal excise taxes.

What is the average debt at VCU? ›

At Virginia Commonwealth University, the median federal loan debt among borrowers who completed their undergraduate degree is $21,500. The median monthly federal loan payment (if it were repaid over 10 years at 5.05% interest) for student federal loan borrowers who graduated is $228.

Is VCU Health not for profit? ›

Welcome to VCU Health Community Memorial Hospital (VCU Health CMH), a community-owned, nonprofit hospital that is dedicated to being the leader in health services for the south-central region of Virginia and portions of northern North Carolina.

What university president has the highest salary? ›

Topping the list was Amy Gutmann, the former president of the University of Pennsylvania, who earned a whopping $22.87 million in 2021.

Where does Michael Rao live? ›

Michael Rao
Personal details
Born1967 (age 56–57) Boston, Massachusetts, U.S.
SpouseMonica Rao
Residence(s)Richmond, Virginia
14 more rows

What does president of Harvard make? ›

Alan M. Garber already had one of the most wide-ranging and powerful roles at the university — he was in the room for many of the institution's most pivotal moments. For this, Garber was paid about $946,000 in salary from the university for the 2021-2022 academic year alone, recent Harvard tax filings show.

How prestigious is VCU? ›

Virginia Commonwealth University is ranked #142 out of 439 National Universities. Schools are ranked according to their performance across a set of widely accepted indicators of excellence.

Is VCU Health state owned? ›

VCU Health System is a public body corporate, political subdivision, and instrumentality of the Commonwealth of Virginia.

What rank is VCU hospital? ›

VCU Medical Center has been recognized as the No. 1 hospital in the Richmond metro area and the No. 2 hospital in the commonwealth by U.S. News & World Report in its 2023-2024 Best Hospitals rankings.

Do VCU employees get free tuition? ›

With tuition benefit, VCU's standard tuition and fees are waived. With tuition reimbursem*nt, the employee pays the institution and then is reimbursed by the department after the course has been successfully completed.

Are VCU employees state employees? ›

University and Academic Professionals are state employees earning state service. Should you enter state classified employment at another state employer after converting to University & Academic Professional employment at VCU, your time still counts towards your total years of state service.

How much does it cost to live at VCU? ›

Typically, though, the housing prices at VCU range from around $3,500 to $5,000 per semester, depending on factors like the room type (single, double, or triple) and building location.

How much does VCU pay patient access representatives? ›

$41K (Median Total Pay)

The average Patient Access Representative base salary at VCU Health is $41K per year.

What is the average tuition for VCU? ›

How much is the VCU Health fee? ›

Mandatory student fees for 2023-24, including increase year over year
Fees2020- 20212022- 2023
Health service fee$224$240
Student activity fee$90$90
Academic Support Services Fee (formerly UC Campus Learning Center)$90$100
Total mandatory fees (resident)$2,661$3,170
11 more rows
Jan 25, 2024

Is VCU prestigious? ›

Virginia Commonwealth University 2024 Rankings

Virginia Commonwealth University is ranked No. 25 (tie) out of 255 in Best Education Schools. Schools are ranked according to their performance across a set of widely accepted indicators of excellence.

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