The owners of a just-approved private student dormitory near Five Points will pay half the normal taxes for their first 10 years, Columbia City Council decided on Tuesday.
But some residents of neighborhoods that surround the nearby Martin Luther King Park have questioned how the project was approved and raised the prospect of corporate favoritism.
The tax break council approved on a 5-1 vote means that Project Peak, Blue Atlantic Columbia LCC partnership will pay between $780,000 and $858,330 in agreed upon annual fees compared to $1,560,000 and $1,716,000 in taxes if council had not approved the break.
The range on yearly payments to Richland 1, Richland County and the city are based on estimates by Columbia’s chief financial officer, made at The State newspaper’s request. Jeff Palen used projections that the 660-bed, multi-story student housing complex amounts to either a $50 million or a $55 million investment.
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Atlanta-based Peak Campus Development’s Jeff Githens declined to tell a reporter shortly after the vote how large the company’s investment is. Githens would say only that it will meet the mandated $40 million needed to qualify for private housing designation that allows the tax break.
Mayor Steve Benjamin, who championed the project, said the investment will be between $50 million and $55 million.
The 370,000-square-foot complex at Gervais and Harden street along the north end of the Five Points entertainment district is the latest in a series of private student housing complexes that city leaders have attracted to downtown using tax breaks. For years, developers constructed the complexes just outside city limits, which meant City Hall gained no tax benefits.
Benjamin said in an interview that despite “strong and legitimate concerns” among some neighborhood residents, “This is a significant opportunity we cannot miss.”
He said the Peak project not only will help revitalize a long-blighted block but it has the potential to change the character of Five Points similarly to how the nearly 900-student Hub is changing Main Street.
Benjamin estimates that several dorm projects the city has attracted with tax breaks will generate $100 million for Richland 1 schools during the next 20 years and $65 million for Columbia’s coffers as well. The $100 million goes to the school district without attendant education costs because the tenants will not go to Richland 1 schools.
Council also gave final OK to a zoning change that will likely affect only this student dorm. The change allows private student housing in areas zoned C-3 by cutting normal buffers in half to 300 feet as long as the property also is near an active rail line or commercial properties.
That description lines up directly with the Peak project. Council also adopted an amendment that no other similar project would be allowed in C-3 unless developers filed their zoning applications by Jan. 1, 2015. Council set the moratorium because the city’s zoning department is embarking on a plan to rewrite all city zoning laws, Benjamin and Councilwoman Tameika Isaac Devine said.
City attorney Teresa Knox said the moratorium is legal.
Yet Lonnie Randolph, who lives in the MLK Park area, said he and other residents have questions.
“Rezoning one project? Then after approving a project, then we shut it down and don’t let anyone else apply?” he said incredulously.
“The way this has been done is an exception rather than the rule,” Randolph said. “And of course we all know that exceptions are not made routinely – they are made for certain people in certain neighborhoods.”
Randolph said he spoke not as president of the state chapter of the NAACP rather for himself and some residents of the Lyon Street neighborhood, the Waverly community and MLK Park who had not been briefed about the project by Peak or its Columbia attorney, former mayor Bob Coble.
Devine proposed the moratorium’s timing because, “This (Peak project) was already in the pipeline so we didn’t want to kill this one.”
Randolph, who met with Devine privately during council’s Tuesday meeting, said he trusts that if the neighbors’ concerns are not addressed, “This matter can be revisited on the 16th.” That’s the date of council’s final meeting of 2014.