Columbia, SC — WHILE MUCH time and energy understandably have been spent on Columbia City Councils effort to buy the Palmetto Compress warehouse, far too little focus has been placed on the creation of a closing fund that would be used to not only acquire the historic structure but also to attract future business investment to the city.
Columbia will withdraw $7 million from its $42.8 million long-term health-care reserve account for current and future retirees to use as seed money for the new fund. The $7 million is to go toward purchasing, improving and maintaining the warehouse. Once the warehouse site is sold, the money will be returned to the closing fund and be used for economic development incentives.
Thats assuming the warehouse property sells. As Columbia pursues this noble but risky plan to preserve the warehouse for adaptive reuse, its incumbent upon city officials and the Columbia Development Corp., which has received inquiries from a dozen developers, to ensure that taxpayers arent saddled with this property and the cost of maintaining it five or 10 years down the road.
No doubt some city officials would say the struggle to find funding to purchase the historic warehouse illustrates the need for a closing fund. Although Columbia has failed on some projects better suited for private developers, it has found success in providing limited help to developers willing to spend private dollars in the city. But it has at times struggled to find the money, often resorting to precious water and sewer funds or other equally inappropriate sources.
In an email, Mayor Steve Benjamin called the closing fund a useful tool as the City becomes even more aggressive in creating jobs. He wants to use the fund to lure high-impact economic development projects that create a significant number of jobs and levels of capital investment. Mayor Benjamin said the fund potentially could be used for parking allowances, site preparation, employee relocation, equipment relocation and building upfit. He also said companies that receive money might have to sign performance agreements. If they dont meet promised goals, they would have to repay the cash.
Without complete details, were hard-pressed to laud or condemn this new fund. That said, the public has good reason to be suspicious pending specifics. Too many governments create these types of accounts and allow such discretion that instead of being closing funds set aside for game-changing investments, they become slush funds shrouded in secrecy and doled out to support pet projects or favored people.
There must be tight controls on this fund. The public should know how it is funded and at what level, who controls it and what criteria are used to justify an investment. Funds shouldnt be allowed to be used without a public vote from the council, and details of the investments must be easily accessible by the public. And even then, the verdict on this account wont come in until we see whether it actually helps close deals that enhance the citys economy and tax rolls.