COLUMBIA SC — Columbia’s latest projection of its financial commitment to the Bull Street neighborhood jumped by $23 million since last summer when the city initially pledged public funding.
In a related matter, the city’s chief financial officer said Wednesday that his recommendation that council consider issuing a $57 million revenue bond to help pay for part of the expenses is a first of its kind in his experience in the city’s finance department. An “installment purchase revenue bond” would be repaid from various sources – but not from water or sewer system revenue, CFO Jeff Palen said.
Last July, citizens were expecting to foot a bill of just over $67.2 million for water and sewer needs, road construction, stormwater service, public utilities, two parking garages and a baseball stadium, according to estimates presented to City Council by Palen.
Palen told council at that time that his estimates were preliminary and subject to change, largely because Greenville developer Bob Hughes had yet to disclose his construction plans. He still has not submitted a formal plan to the city.
Tuesday, Palen presented council with a new estimate of $90.2 million, an increase of $23 million.
The increase came from higher projected costs for the ballpark and the parking garages – figures for which the city received from Hughes last summer, Palen said in Wednesday’s interview.
Hughes took responsibility Tuesday for the change in estimates for the stadium when he addressed council during an extended public hearing.
“I thought $20 million was the right number,” Hughes said. “I didn’t understand the difference between a really good stadium like Greenville’s and a really spectacular stadium like Fort Wayne’s (the template for a Columbia ballpark).”
The expense for the stadium shot up by $15 million – from $20 million last summer to $35 million now.
The expense for each garage rose by $4 million – from $8 million to $12 million each.
Palen repeatedly emphasized to council that even his latest figures are estimates that could change depending on when the projects are started and finished and on construction bids.
“You’ll hear me use the word ‘estimate’ a lot,” he told council at Tuesday’s hearing.
“People will argue over this cost forever,” Palen said Wednesday in an interview.
The $35 million stadium projection came from Hardball Capital’s chief executive Jason Freier. The Atlanta businessman is negotiating with the city for a 30-year deal that would have him lease and operate a city-owned, year-round ballpark in the center of the Bull Street neighborhood.
Even at $35 million, Freier’s figure is about $7 million less than the $41.8 million estimate the city received from a consulting firm hired to conduct a baseball feasibility study.
Palen said he increased the estimated cost of the garages after evaluating several constructed recently in the Southeast. After that analysis, he projected the cost of each space at $15,000 – a 50 percent increase over the previous $10,000 per space.
The agreement the city signed with Hughes last summer calls for it to build two 800-space garages. Construction timetables are hinged to Hughes meeting investment benchmarks that are part of the contract, called a development agreement.
Council has yet to vote on ways to pay for the full Bull Street commitments. Palen’s latest suggestion involves using three pots of public money: the $57 million installment revenue bond, a $24 million meal-and-beverage tax bond and a $9.4 million withdrawal from cash reserves in its water, sewer and stormwater funds.
Under an installment revenue bond, the city could choose to make payments by various methods, Palen said.
Council could vote to issue more general obligation bonds – though the city is close to its $41.4 million capacity at the moment, he said.
Payments also could come from the annual lease income the city is to receive from the ballpark operator, Palen said. Council also could tap into revenue from parking fees.
A combination of those sources could be used as well and tailored to when the debt might be payable.
“This is a starting point for council to consider,” Palen said of his recommendation.
How to pay for it
Columbia City Council on Tuesday received from the city’s chief financial officer, Jeff Palen, an updated outline of how it could pay for public services and a proposed baseball park at Bull Street . No votes on spending were taken.
$55.2 million: Infrastructure commitment, including a $8 million increase for cost of two garages
$35 million: Baseball park estimate, up $15 million from previous projection
Total = $90.2 million
Suggested payment sources
$57 million: An installment revenue bond repaid by various city revenues
$24 million: A loan repaid with hospitality taxes on prepared meals, drinks
$9.4 million: Unallocated money in water and sewer, stormwater funds
Total = $90.4 million
SOURCE: Columbia’s finance department
Reach LeBlanc at (803) 771-8664.