Columbia, SC — WHILE MANY criticize Columbia City Councils decision to use reserves to purchase the Palmetto Compress warehouse, it was a taxpayer friendly move, considering.
The councils first option was to take out a $7 million bank loan secured with hospitality tax revenue, in case it failed to land a buyer within two years. The interest-only payments for those two years would have been nearly $300,000.
But the council ditched the plan to use the prepared-food tax after complaints from some business people as well as arts groups. Thats just as well. It would have been a stretch actually a trouncing of state law to use restaurant tax revenue, restricted to tourism projects, for the purchase. After a proposal to use water and sewer revenue was criticized, the council backed off that as well.
Ultimately, it ended up tapping long-term health reserves, a wise decision if it was intent on making this purchase. It doesnt make sense to borrow money and pay tens or hundreds of thousands of dollars in interest when the city can tap reserves and repay itself in a reasonable amount of time, mind you minus the interest.
I know what youre thinking. And, youre right. The attempt to preserve the warehouse is a speculative project and could be a big bust; taxpayers could lose big money just as they did on AirSouth and the CCI property and the proposed convention center hotel you know the list were always citing.
But what if its successful? What if the timing is just right to cast a wide net to hook a developer ready, willing and able to transform this hulking, ugly duckling of a building into a beautiful swan right smack in the midst of USCs research campus? That would be quite a boon for the city, from both an economic development and a historic preservation standpoint.
I know. If the owners of Palmetto Compress warehouse, who deserve credit for hanging in there and preserving the structure for this long, werent able, in a quarter of a century, to unload it to a developer who could preserve the warehouse, how is the city going to be able to do it? We would have been better off allowing an Ohio developer to raze the old building and replace it with student housing, right?
But the Design and Development Review Commission didnt say the developer couldnt raze the building. It said the particular student housing proposal didnt fit the approved guidelines for Innovista. While some rip the commissions decision, it was doing the job it was created to do. Ive found that regardless of the size or scope of your project you could be a church or an individual homeowner or a developer the board is pretty consistent. Tough, yes, but consistent.
Once the Ohio developer changed its mind about that specific student housing plan, the warehouse owners, with no potential buyer but a city demolition permit, were ready to raze the historic structure.
Thats when Columbia stepped in and, using its reserves, did for this community what no else was willing to do: It decided that this site would be developed but that its historic character would be preserved.
Once the warehouse is in city hands, the focus will be not simply developing this property but preserving it. It will be actively and aggressively marketed in that manner.
While the large structure presents considerable challenges, this city has seen giant mills Columbia, Whaley, Olympia and Granby and the Confederate Printing Plant transformed to modern use. Why not the Palmetto Compress warehouse?
Unlike some of the citys busts, there is a strong motivation for this property to be developed because of its location in Innovista. The university, the city, Richland County and private interests are investing money in this area. There is pressure on almost every piece of property to be developed at some point.
And one day something will be built on the Palmetto Compress site. The question is whether it will be sooner or later and whether the warehouse will be a part of the plan.
The city, through the Columbia Development Corp., is betting it can facilitate a deal that gives the warehouse new life. Fred Delk, the development corporations director, said he has received about a dozen inquiries from local and out-of-state developers.
Some people respond to that news with raised eyebrows. Yeah, right.
But Im willing to take them at their word for now. I expect something to happen. They cant go zero for 12, can they? And if the Ohio developer is once again interested in building student housing adjacent to the warehouse, doesnt that give the city a leg up?
I know Columbia has botched its share of real estate deals and its imperative that it gets out from under this one as soon as possible. But what if? What if the development corporation and the city can seal the deal?
If it can, Mayor Steve Benjamin, who has aggressively pushed this deal, suggests a private company would return a $60 million to $70 million investment to the tax rolls. Now that would be taxpayer friendly.
Reach Mr. Bolton at (803) 771-8631 or email@example.com.