A controversial plan to attract homes and businesses to Columbias long-neglected North Main Street area and the new riverfront Innovista area using up to $110 million in taxpayer money has been re-crafted and scaled back, in some cases by one half.
The plan, while downsized, is important because it would:
• Open up development of the citys riverfront along Huger Street, a key part of the Innovista plan.
• Provide the roads, sidewalks and water and sewer lines necessary for a Greenville developer to build a 183-acre neighborhood off Bull Street, a key component of the North Main Street plan.
Columbia City Council is set Tuesday to cast the first of two votes on a contract that would outline the rules for capturing property taxes within those designated areas for 15 years. The money would be put back into those districts, to install water and sewer systems along with other basic public services to make those areas attractive to private developers.
Compared with a timetable council adopted in February 2010, the new time frame would cut by 40 percent the number of years that property taxes would be spent strictly in those areas rather than citywide, as taxes are usually spent.
The proposed contract also would slice in half the public investment in the Innovista, a 724-acre district south of the city Vistas entertainment district, stretching along the Congaree River from Olympia north to Gervais Street. The new figure is $70 million, down from the $150 million council approved 2½ years ago on a hair-thin vote.
Further, the contract between the government agencies called an intergovernmental agreement would require controls on the accounting of the taxes as well as create a new oversight body to decide changes in construction projects and approve spending on maintenance of parks and other public projects in those two parts of the city.
But the contract leaves unanswered the funding for construction of a much-anticipated baseball stadium in the proposed Bull Street neighborhood.
Councilwoman Tameika Isaac Devine has led the citys efforts to get Richland County and Richland 1 to buy into the new financing plan instead of the one City Council approved in 2010 on a 4-3 vote. The 2010 plan called for spending up to $190 million over 25 years to build infrastructure that would presumably attract developers to the long-neglected, under developed parts of the city that have not lured big-ticket projects.
What this does is gives us a framework to attract the projects, Devine said late last week. It will help us increase the tax base (and) eliminate blight. You cant expect a private developer to go down there and say, Yeah. This looks great. Let me put some money into it.
Even if the contract wins approval, bonds have not been authorized to cover the expense of building utility lines, roads, streetlights, parks and other features, Devine said. The plan would allow up to five years to make those decisions before the first bond would be approved. The 15-year clock would begin once the first payment is due on the first bond issued.
Councilwoman Leona Plaugh and former councilman Daniel Rickenmann are skeptical of the plan, which would use tax increment financing to pay for utilities, including roads, street lighting, sidewalks and public parks.
TIF districts, as they are called, use tax revenue from properties inside the designated area to help pay for bonds issued to cover infrastructure costs. Under this plan, 75 percent of the revenue would stay in the districts. The rest would go to the city, the county and the school district, each of which would decide how to spend its portion of the taxes.
At this juncture, based on what I know, I could not support (the new plan), Plaugh said, adding there are too many unanswered questions.
Plaugh and Rickenmann, ex-chairman of councils finance committee, say the plan leaves too much financial responsibility on city taxpayers and its water and sewer customers, since money in the citys water fund is being used to guarantee repayment of the bonds if private development in those two areas does not generate enough taxes to make the payments.
I think the city is on the hook, said Rickenmann, who stepped down in June after two terms on council. This is not equal distribution (of risk). With all the controls the county and the school district put in there, there sure seems to be a lot of loosey, goosey parts.
Public yet to be heard
The public will have an opportunity to speak up on the plan most likely in the fall, before council casts its final vote in late October or November, Devine said.
But Plaugh has called a public meeting herself on Tuesday at the former Eau Claire town hall complex, just hours before council is to consider its first vote.
She has invited a commercial real estate researcher who did his own analysis of the Innovista plan. Ben Johnson, of Grubb & Ellis Wilson Kibler, challenges the tax revenue and construction projections and questions whether theres enough demand for major construction simultaneously in two parts of the city.
I felt like there were a lot of things about it that just didnt make (financial) sense, Johnson said in an interview. So I decided to look into it. He said some of the information he used in his analysis came from former councilman Kirkman Finlay, who voted against the plan in 2010.
Johnson recommends against approving large financing packages. He suggests small, project-by-project funding.
Devine dismisses Johnsons analysis as factually flawed because, she says, some of the data he used has been updated. I dont know who asked him to do that, she said. It could be politically motivated.
Rickenmann voted against the 2010 plan, which sat idle because neither the county nor the school district would participate. They complained that the 25-year financing commmitment was too long, they wanted more assurance about auditing the money and they did not support the list of projects. The county already was suspicious of the city because of its accounting of taxes generated in the Vista, where private development exploded when $115 million in public money was spent under a similar fiancing plan.
In 2007, the city, county and the school district settled a feud over $6 million in questioned taxes generated in the Vista shopping and entertainment district under a tax-increment financing plan similar to the one intended for North Main and the Innovista. To avoid a lawsuit, the city paid the county $5.5 million.
City leaders argued then, as they are now, that Columbia took the financial risk because it is responsible for repaying the bonds if property taxes do not cover the debt payments.
Some of the new provisions in the plan council will discuss Tuesday include:
• A 12-member oversight committee comprised of equal representation from the city, the county and the school board. The Metropolitan Columbia Chamber of Commerce could recommend three of the 12, but their selection would not be guaranteed.
The committees ability to change the priority of construction projects and to OK any request from the city to use tax money from the districts to pay for the on-going cost of police, fire, garbage pickup and other public services.
Annual financial reports provide by the city to the oversight body, the county and the school district. The reports would include summaries of business activity within the taxing districts, the status of debt payments on bonds and how much tax money would be spent on projects during the next fiscal year.
Under the plan City Council adopted two years ago, the committee would serve only as an advisory body.
Devine said committee members also will be required to meet the same ethics standards that City Council adopted in May for itself, for city employees and for all appointees to public bodies. The committee also would be subject to the states open-records law.
The North Main district projects
The new 15-year plan before council Tuesday estimates $40 million in taxes would be raised to be spent on public projects in the North Main Street area.
Half of that $20 million would be spent in the 183-acre proposed Bull Street neighborhood, which is part of that district and expected to be one of the citys biggest private investment outlays in years.
Bull Street developer Bob Hughes of Greenville has yet to say how much public infrastructure money he will ask the city for. He has said it would range from $28 million to $31 million.
But the new plan wouldnt mean $20 million is all Hughes could request, Devine said.
She said council would consider separately any request he makes in excess of $20 million as the neighborhood develops over the next 20 to 30 years.
Unlike the projects in the Innovista, the proposed projects in the North Main Street area are not listed in order of priority. As written in the contract, it remains unclear which body would determine the order that projects would be done.
Here are the rest of the projects listed in documents that are attachments to the contract:
• Up to $12.5 million in public money would be allotted to North Main Street itself for widening or improving streets. The four projects there are expected to cost $402 million.
• Up to $3 million in public money toward development of a 70,000-square-foot shopping center on 10 acres along Farrow Road that is expected to cost about $7 million, Devine said.
• Up to $2 million in public funds toward single-family and rental housing near Taylor Streets Gonzales Gardens and Harden Streets Allen-Benedict Court, both public housing complexes, that is expected to cost $19.5 million.
• Up to $1.5 million in public money for a 1-mile, meandering pedestrian walkway past some of the citys historic homes, from the corner of Hampton and Henderson streets to the corner of Elmwood Avenue and Marion Street. The public money will cover the entire cost of the project.
• Up to $1 million in public funds toward streetscaping along a 1.8-mile stretch of Two Notch Road that is expected to cost $30 million.
The Innovista projects
The new 15-year Innovista plan takes a dramatic cut in expected taxpayer expenditures from the 2010 plan from $154 million to $70 million.
That $70 million isnt enough to cover the expected $154 million cost of projects proposed earlier for that area.
Lee Bussell, a member of the group that devised the original Innovista plan, said $70 million would fund about three of the seven projects.
The priority order and projected expenditures, according to the plan, now are:
• $17 million to extend Greene Street from Huger Street to the Congaree River. The extension would include a wide vehicular and pedestrian bridge over the areas railroad bed east of Huger (toward USCs arena) as well as a plaza and walking and biking pathways.
• $24 million for a new riverfront road an extension of Williams Street that would connect the Blossom and Gervais street bridges, extend Senate Street to the river and make overhead power lines less visible.
• $12 million to lengthen or connect six streets: Catawba, College, Devine, Gist, Pulaski and Wheat.
The cut in public funding means money is likely unavailable for the remaining 2010 projects. They include:
• $15.2 million for street and parking improvements in the Granby and Olympia neighborhoods.
• $9.3 million for a proposed riverfront ballpark.
• $51.3 million for a proposed waterfront park to be built between the Williams Street extension and the river.
• $16.6 million set aside for unspecified improvements in Innovista.
Reach LeBlanc at (803) 771-8664.