COLUMBIA SC — The citys financing of the Palmetto Compress warehouse with a $7 million loan would be the first project from a new account designed to attract more business investment into the city center, City Council tentatively decided Tuesday.
A divided council approved the first of two votes to create the account and make the first loan for purchasing and flipping the warehouse. The account and the loans from it would be backstopped by $42 million the city has in reserves for health care benefits for its current and future retirees. The reserves are not drawn from premiums that city workers pay, city staffers told council.
After the vote at a council meeting at Mays Park, Mayor Steve Benjamin said several developers have said they are interested in converting the four-story brick building located at an eastern gateway into the city. A hotel is a likely option, he said, adding that representatives of the worlds largest hotel developer spoke with him Tuesday. He declined to name the company or be more specific.
Fred Delk, director of the Columbia Development Corp., which will own and market the building, said nine local developers have approached him. A hotel, condominiums and more student housing are among the possible uses of the warehouse and the 4.7 acres the city is buying.
Benjamin said the purchase will preserve the citys history and generate anywhere from $40 million to $70 million in private investment and the taxes that would follow. He is referring to continuing interest from Edwards Communities Development Co. of Ohio in a student housing complex that Benjamin said might exceed the seven buildings the developer proposed last year.
We have a responsibility to see that its done and its done right, he said of saving and refitting the warehouse. We cannot tarry. Its time to move forward.
Details of the purchase and flipping of the nearly century-old cotton warehouse through the development corporation have yet to be fully worked out. For example, a time limit should be set on how long the city would hold on to the aging structure that preservationists fought for months to save from demolition by its private owners. Those owners say in 25 years of marketing the building, no one could afford the cost of saving it because of its original design and current condition.
Council agreed that it would write a time limit into the final decision on the purchase, which requires a second vote.
After 90 minutes of pleas for council to buy and save the warehouse, largely from preservationists, Councilwoman Leona Plaugh and Councilman Moe Baddourah were the only no votes.
Among Plaughs concerns were that the city will incur expenses of $15,000 a month for utility costs and other expenses of maintaining the building.
She cited several city investments that were busts.
The reality is that what typically happens, with our best efforts, is that we lose money, she said. I bet you a dinner, mayor, that were going to lose money on this.
Reach LeBlanc at (803) 771-8664.