COLUMBIA SC — City Council is looking for new ways to save the Palmetto Compress warehouse, while using part of the land to persuade a student-housing development company in Ohio to proceed with an adjoining, $40 million, seven-building complex.
Edwards Communities Development Co. of Columbus, Ohio, not only hasn’t walked away from the controversy involving its proposed 346-room housing complex, it’s in talks with city leaders to realize the project, sources familiar with the negotiations said Monday.
“We’ll not only see a $40 million investment, but potentially up to $70 million,” Mayor Steve Benjamin said, declining to discuss the talks with Edwards. “We are actively working to maximize the investment in this property ... to good, quality urban development.”
Councilman Brian DeQuincey Newman said despite rumors that Edwards had tired of months of fights with city preservationists, who oppose razing the nearly century-old structure, “They (Edwards executives) are re-evaluating their position rather than ... completely walking away.”
Efforts to reach Steve Simonetti, Edwards’ vice president for land acquisition and development, were unsuccessful Monday.
Edwards’ plan was to buy about 11 acres, including the roughly five acres City Council wants to purchase immediately around the four-story former cotton warehouse that represents part of Columbia’s past in the textile trade. The company announced earlier this year it was dropping its project, after lawsuits and countersuits stalled approval by the city’s design commission.
Edwards now wants a piece of the land the city would buy in saving the building, the sources said. The company, which has developed student-housing projects around the nation, also is in talks to purchase more land from other owners to offset what it would lose if City Council buys the warehouse.
Meanwhile, council today will discuss various ways to finance the warehouse and other economic development projects. Already, some on council are lining up against some of the options.
Benjamin and city manager Teresa Wilson said they favor a new economic development fund that could be used for projects such as Palmetto Compress. The warehouse will cost $5.65 million plus expenses associated with seeking another developer to adapt the building for new uses, Benjamin has said.
Wilson said City Hall staffers and a consultant have studied using city reserves to create the fund, including possibly reserves from the water and sewer system or from the fund for employee insurance and retirement. Shifting money from the system that supplies about 400,000 customers in the metropolitan area is often criticized. That practice is the subject of a lawsuit.
But a controversial plan to buy the warehouse that council tentatively approved last month seems to be losing support. It called for the city to get a loan of up to $7 million from First Citizens Bank and backstop the loan with meal-tax revenue, in case the city could not find a buyer within two years. The bank would require interest-only payments the first two years at $140,000 annually, said Councilwoman Tameika Isaac Devine.
“If we haven’t sold the property (within two years) ... we have the ability to transfer from water and sewer,” Devine said.
Columbia’s hotel and restaurant trade groups threatened to sue, questioning whether meal taxes, formally called “hospitality taxes,” can be used for such purposes. The Chamber of Commerce characterized the purchase as unfriendly to the city’s business climate. Arts organizations worried that further spreading the $8 million-plus pot of H-tax money might jeopardize their shares.
Council members Moe Baddourah and Leona Plaugh voted against that plan.
The wave of opposition prompted council to consider a substitute financing plan, which would tap water and sewer reserves as the backstop.
Councilman Cameron Runyan said one of the appeals of using water and sewer reserves is that the city would not face a $400,000 upfront expense that would come with a loan backed by meal taxes.
Plaugh and Baddourah said Monday they are likely to also oppose using water and sewer revenues as a backdrop.
Benjamin said he hopes the various financing options will be discussed in public at today’s council meetings instead of behind closed doors.
“The point here is to be creative and transparent,” Benjamin said. “I’m willing to be creative and aggressive in buying the building.”
Chamber of Commerce director Ike McLeese said Monday council’s majority seems determined to proceed with the purchase. “Word on the street is they have the votes to do it, and they’re going ahead with it.”
Reach LeBlanc at (803) 771-8664.