Tax breaks for private student apartments in Columbia, which some argued might be illegal, are in fact legal, a Richland County judge ruled Wednesday.
Judge Casey Manning issued a summary judgment in favor of Columbia and Richland and Fairfield counties.
Four privately funded dorms built downtown near the University of South Carolina are receiving a 50 percent reduction in property taxes for 10 years.
At issue was whether privately funded student dormitories are eligible for tax breaks in a tax district supposedly designated for industrial and business tax breaks. To be eligible for the tax break, the dorms had to be built at a cost of $40 million and provide parking for 400 cars.
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Manning ruled that the private dorms meet the definition of commercial activity that allow them to receive tax breaks in the multi-county “industrial or business park” tax district.
“This is a huge and resounding win for the people of Columbia, the taxpayers of Richland County and the children of Richland School District 1,” Columbia Mayor Steve Benjamin said Wednesday. “We were confident that this was a sound law that has attracted hundreds of millions of dollars of high-quality development to the city and county. ...
“We look forward to using some of the same tools in the future to try and increase more quality housing and affordable housing for the people of Columbia and Richland County.”
Columbia resident Rusty DePass and the S.C. Public Interest Foundation sued the city and the two counties claiming that residential apartments do not fit the intention of an industrial or business park.
But, Manning wrote in his ruling, student apartments are not “residential” in a property tax sense, as they are taxed at a commercial rate.
The plaintiffs also argued that the student dorms are not properly receiving the tax breaks because they produce few jobs and little investment in manufacturing. The judge said that argument was “irrelevant.”
DePass is considering an appeal, his attorney, Jim Carpenter, said Wednesday.
“These student apartments are not industrial projects,” Carpenter said. “They don’t bring in jobs. They don’t create prosperity for the community. I don’t think they meet the statutory requirements” to receive the tax break.
WHO GOT THE TAX BREAKS?
Four student housing developers who were approved to get half off their property taxes for a decade. Their tax breaks, applied for before December 2015, were challenged in court.
▪ Manhattan-based Park 7 Group’s Park Place, a 640-bed complex at Blossom and Huger streets. The contract amount of the project is about $31 million based upon information in permits issued by the city. But other expenses would be required to qualify for the tax break.
▪ Edward Communities, based in Ohio, built Greene Crossing, a 727-bed complex on Pulaski Street. Its cost is about $43.4 million, based on permits.
▪ Park 7 also is developing a 684-bed complex at Assembly and Pendleton streets near USC’s School of Music. Its cost is about $42.3 million, based on permits.
▪ Atlanta-based Peak Campus Development’s Station at Five Points, a 660-bed complex at Gervais and Harden streets. Its cost is about $41.5 million, based upon permits.