USC to ask local taxpayers for $15 million for new medical school

The University of South Carolina expects local governments to chip in $15 million for the university’s new medical school building on the Bull Street property in downtown Columbia.

But Columbia and Richland County leaders are not eager to pitch in. Nor have they been asked for the money, weeks after USC filed a document with the state saying local governments would be on board.

“It has not even been mentioned in any of the meetings or casual conversations of the council,” Columbia City Councilman Howard Duvall said.

USC wants the money, plus $50 million from the state, to kick-start a new $200 million health sciences research complex on 16 acres of Bull Street land donated by Greenville developer Bob Hughes, it told the state in a budget request last month.

The $65 million in state and local dollars would go toward an $80 million, 130,000-square-foot medical school building slated to open in 2020, the budget request said. Private donations would make up the other $15 million.

But some city and county leaders are tapping the brakes ahead of USC’s official request, expected to come next spring, citing budget constraints and the number of public dollars already invested at the Bull Street property.

“It won’t be from the City of Columbia,” Columbia Mayor Steve Benjamin said of the money.

“While this may be a good move for the university, it would be a bad move for the city and county,” Richland County Councilman Seth Rose said.

‘Citizens have stepped up’

Some local leaders say the donation of part of the Bull Street land to the tax-exempt university runs counter to a proposed benefit of the Bull Street redevelopment deal: bringing the long-exempt former state mental health property onto the city’s tax rolls.

Columbia in 2013 agreed to invest $56 million for utilities, roads and two parking garages, among other public services for the Bull Street complex, plus another $31 million to help build the $39 million minor league ballpark there.

“That was one of the selling points for the people that supported it,” said Duvall, an at-large city councilman. “I certainly would be pleased to see USC put a med school over there, but that would be a nontaxable entity on the Bull Street property that needs to be on the tax rolls.”

Bob McAlister, a spokesman for Hughes Development, said the city is not getting short-changed.

Hughes offset the donation by recently purchasing another 16-acre tract on the Bull Street property that was not part of the original development agreement, McAlister said.

USC contends the health sciences complex is a worthwhile investment.

The school says the campus would become an “economic powerhouse,” bringing the city’s urban core thousands of jobs in construction, operation, research, commercialization, start-ups and clinical services.

USC estimates the project would generate up to $9 million a year in tax revenue with an eventual annual economic impact of up to $180 million.

“While the university property may not be taxable, any private development that is attracted to Bull Street to gain proximity to a health science research complex or entities created from the research being conducted there would be taxable,” USC spokesman Wes Hickman said in an emailed statement. “This is a transformative project that will have a profound economic impact on Columbia, Richland County, the Midlands and the state.”

Benjamin stressed he is excited about the development and medical school. But Columbia residents already have done their part, he said.

“It’s highly doubtful that any more city resources would go into the project. Citizens have stepped up and done what is necessary and beneficial to the city.”

Duvall said no city dollars should go toward the project unless the university agrees to pay the city fees in lieu of taxes on the health sciences campus and all future university development across Columbia.

USC’s expansion west toward the Congaree River and south toward its football stadium strains city services that rely on tax dollars the school does not directly provide, Duvall said.

“This would allow us to provide the fire service we provide, code enforcement in neighborhoods impacted by the university,” Duvall said.

‘The whole nine yards’

Several Richland County Council members struggled to give definitive answers on a request they have not received. But they said they would keep an open mind.

“I’m hard-pressed to say what I’d do now,” said councilman Paul Livingston. “I’d consider it, but it totally depends on all the facts surrounding (the request).”

Councilman Bill Malinowski agreed, saying he also would need to look into whether USC’s medical school must relocate from the aging site it leases next to the Dorn Veterans Affairs Medical Center on Garners Ferry Road.

USC School of Medicine’s lease with the U.S. Department of Veteran Affairs for that site ends in 2030. The building needs $75 million in improvements, USC officials have said, and rent is expected to increase to $7.5 million a year from $1 a year under a new lease.

“If this (project) is a need, yes, I could consider assisting,” Malinowski said. “If it’s merely a want, I’m not sure I’m going to give it much support.”

Others on the 11-member council are skeptical as to how much, if anything, Richland County feasibly could contribute.

“We just don’t have the debt capacity to take on projects right now, especially with the commitments we currently have, with our current projects in the hopper,” said outgoing council chair Torrey Rush. “To take on a project like that, you’re talking about raising taxes and the whole nine yards. There would have to be an in-depth conversation about it.”

Councilman Greg Pearce said he and others would be enthusiastic about the project. But, he said: “I don’t know where we would get that kind of money. We are backed up with capital projects already.”

‘We just don’t have the revenue for that’

State Sen. John Courson, R-Richland, who chairs the Senate’s Education committee, said USC’s $50 million request to the state is unlikely to gain traction with state lawmakers.

The school also unsuccessfully lobbied S.C. lawmakers for the $50 million last spring.

“We just don’t have the revenue for that,” said Courson, a USC graduate.

Still, USC plans to ask state lawmakers for the money early next spring.

Courson suggested the school get a hard commitment for the $15 million in local dollars before mentioning that money during talks with state legislators.

“If they’re going to bring in the fact that they are seeking additional revenue, they need to have a commitment from that public entity, whether it’s County Council or City Council,” Courson said.

“If they haven’t already gotten the commitment, they should get it before coming to the state.”

This story was originally published December 20, 2016 at 5:41 PM with the headline "USC to ask local taxpayers for $15 million for new medical school."