The city of Columbia is going to buy the Palmetto Compress warehouse and the land immediately around it for $5.65 million, sell most of it to a preservationist developer and maybe keep a piece of the old structure for a museum depicting Columbia’s history, Mayor Steve Benjamin said Tuesday.
Benjamin discussed the plans after a divided City Council gave the first of two votes for borrowing up to $7 million – backed by meal taxes – to save the former cotton warehouse that has become a flashpoint between the business and preservationist communities.
Councilwoman Leona Plaugh and Councilman Moe Baddourah voted against the sale. Plaugh said she first wants a formal appraisal of the property.
The other five members voted for a two-year tax-anticipation bond for the building and 4.7 acres. The bond is to be sold to a private financial institution or investment bank, Benjamin said.
The vote comes a week after council authorized the city manager to negotiate a purchase contract.
The loan would be repaid through the resale of the property or, if necessary, by using some of the roughly $9 million the city receives in hospitality taxes paid by patrons who buy prepared foods and beverages inside the city. The “H-tax” rate, sometimes called a meal tax, is 2 percent of the purchase.
Benjamin said that “several” developers have said they want to reuse the 320,000-square-foot warehouse. He declined to name or say how close the city is to closing a deal with any of them.
Benjamin also said he would like to see the building declared a city landmark, a process he started then dropped last year.
The building’s current owners insist the brick warehouse cannot be saved because of its condition and design. The walls are sustained only by sloped wooden floors, they say. The owners, who include some of Columbia’s most prominent residents, cite 25 years of failure to find someone willing to save the four-story structure that stands at an eastern gateway into the capital city.
Owners had a contract with an Ohio-based developer, Edwards Communities Development Co., to demolish the warehouse and build an 800-bed student housing facility near the University of South Carolina campus. The developer withdrew from that deal after public flights with the Historic Columbia Foundation and others who said the building is the last major structure in Ward 1, once an African-American neighborhood that surrounded the warehouse.
Benjamin said the city’s agreement with the owners has a provision that stops demolition. That gives the city time to find a developer with the right mixed-use plan. The plan would not include student housing and is likely to have retail space.
A Columbia museum is something that Historic Columbia Foundation has been pushing for years, the mayor said. The city might hold on to some of the warehouse space if a museum can become a reality, he said.
Plaugh complained that for the city to vote on the purchase before it has a formal appraisal “is not a shrewd business approach.”
Benjamin said an appraisal is being done now and will be ready by the time the city closes the purchase around mid-April.
With a $5.65 million sales price, the rest of the $7 million loan could be used for some of the renovations for the warehouse, Benjamin said.
The sales price is less than Edwards Communities paid for the property, he said. But that contract included more land.
The earliest a final vote on the purchase could occur is at council’s April 9 meeting.
In other action, the Columbia City Council: