Columbia officials are trying to prepare for a developer’s request for public money to build infrastructure for his new Bull Street neighborhood downtown.

But major questions must be answered before the city knows how much public money might be needed up front.

Chief among them is how much public money will Greenville developer Bob Hughes seek to start building the neighborhood? How much will he request over the 30-year life of the project – which will include city-owned parking garages and a minor league baseball stadium?

At stake is how much financial risk the city is willing to take on to help Hughes Development Corp. build a walk-able, urban neighborhood unlike any other in Columbia that could be an enormous boost to the city’s tax base.

Hughes is expected in April to spell out how much he would like the city to pay for roads, water and sewer lines, street lighting, two or possibly three parking garages, the ballfield and other infrastructure needs to help him realize a 181-acre neighborhood that supporters say would change the face of Columbia.

The clock is running for Hughes and city leaders because he has said his business model requires breaking ground on the first project this summer. Further, City Council and the city finance office need to know how Hughes’ high-dollar plans will affect next year’s city budget as well as water and sewer rates in the short and long term.

The council already is weighing how much to raise water and sewer rates starting July 1 to pay for long-neglected improvements to a utility system that has run afoul of U.S. Environmental Protection Agency standards.

The price tag for Bull Street utilities and basic services could pressure rate increases into the double digits for the next five years, said Councilman Daniel Rickenmann. The city uses its water and sewer fund as collateral to guarantee bonds it issues for infrastructure projects. There has to be enough money in the fund to provide that collateral as well as make scheduled water and sewer system repairs.

Rickenmann opposes large, up-front, public contributions to help the Bull Street project. “I can’t support this kind of commitment. It will cripple the city.”

He recommends public investment in small stages pegged to specific projects as the Bull Street neighborhood is constructed.

Mayor Steve Benjamin doubts the city’s investment would spur double-digit rate increases.

“I absolutely would not support a double-digit increase to support a TIF.” TIF stands for “tax increment financing” district, a means of designating an area for reinvestment of taxes generated to within its boundaries rather than spending the taxes across the rest of the city.

Benjamin and Councilwoman Tameika Isaac Devine have been intensifying their talks with Hughes as he finalizes his plans for Bull Street.

Devine is less optimistic about the impact the expansive neighborhood would have on water and sewer rates.

“I’d be lying if I said we can do all this without raising water and sewer rates,” Devine said. She did not say how large an increase would be needed.

Not all council members have been as involved in the most recent talks with Hughes.

“Maybe they’ve got their four votes and they don’t need another one,” said Rickenmann, who chairs the city’s finance and budget committee but is retiring from council June 30.

Against a backdrop of fluid negotiations, Hughes has submitted one recent proposal that outlines a first-year infrastructure cost of $5.2 million for the first project. The second and third years would cost $7.2 million, followed by $2.1 million for the fourth year and $931,000 for the fifth.

Hughes has raised the prospect that he would pay those costs up front and have taxpayers reimburse him when the city issues TIF bonds or provides some other kind of public funding, Devine said. She has been spearheading efforts to get County Council and the Richland 1 board to endorse a TIF plan.

“He just said there are lots of ways to do this,” Devine said of conversations with Hughes about the complex finances.

“There are so many moving parts to this,” she said. “We need to start thinking outside the box.”

Projects in the $5 million to $10 million range might not require collateral from water and sewer income, Devine said.

The city and Hughes also are exploring construction of a $19 million to $25 million baseball stadium that would be backed by hospitality taxes, which is the 2 percent tax paid on prepared foods, as well as through surcharges on tickets for games, Benjamin and Devine said.

During the life of the Bull Street project, the project-wide infrastructure needs could reach between $20 million to $40 million, city officials have said.

Hughes told The State newspaper March 5, after the city’s Planning Commission approved his zoning request for the site, that he consistently has estimated the overall infrastructure expense as between $28 million and $31 million.

But he has yet to detail precisely how much in public seed money he will seek and the time frame in which he will need it.

Key projects

One of the key projects being negotiated is the baseball stadium.

City officials, including Benjamin, said Hughes is considering a park that could accommodate up to a AAA minor league team. Triple-A stadiums are larger and have better amenities because the players are one stop short of entering the major leagues.

Benjamin said he favors a public-private cost-sharing plan to build the stadium. He declined to be more specific.

Another key to public costs for Bull Street is the parking garages that will be required to accommodate the concentration of businesses and residents. Estimates are that each of as many as three garages could cost $10 million or more, depending on their size, design or whether they are underground.

The garage the city is building at Sumter and Taylor streets, for example, is costing $18,000 per space, or $10.8 million, city manager Steve Gantt said. The city could not afford to pay for underground or high-end garages in the Bull Street neighborhood, Gantt said.

The two TIF districts

Officials for the city, Richland County Council and the Richland 1 school board are working to update two taxing districts – not just the one where the Bull Street property is located.

The other is for Innovista, which encompasses the newest part of USC’s campus and the Vista shopping and entertainment district that abuts the Congaree River.

The city created the districts in 2010 but has not used them to generate money for projects because the county and school district immediately rejected them.

The districts won’t work without the county and the school district.

County Council and the school board must agree to do without their portion of the property taxes on new construction and investment within the districts for a specified amount of time. The city’s portion of the property taxes alone wouldn’t be enough to pay for the infrastructure that’s needed.

Devine said she is working to reach agreement with county and school district officials on the broad outlines. Together, the two districts could be designated for $130 million to $200 million in public reinvestment, according to estimates being analyzed by city staffers.

Devine said officials from the three groups are nearing agreement on districts that would:

• dissolve in 15 years

• use 75 percent instead of 100 percent of the taxes generated by new development in the districts

• guarantee the school district that participation in the TIFs would not shortchange its education funding from the state.

Benjamin said he supports taxing districts that are “ambitious but (fiscally) conservative.”

With the growing number of tax-exempt properties in the capital city, attracting new homeowners and businesses is worth some risk, he said.

“We’re talking about growing the city – dramatically increasing the amount of properties on the tax rolls.”

Reach LeBlanc at (803) 771-8664.