City council gives first nod on $16 million financing plan for BullStreet garages
Columbia City Council has given an initial approval on a measure to borrow millions of dollars from a city retiree benefit fund to pay for the construction of a pair of parking garages in the under-development BullStreet District.
Council on Tuesday passed first reading on an ordinance that will make way for $16.5 million to construct two garages — one with about 620 spaces and another with about 230 spaces — in the development at the sprawling former State Mental Hospital site. Council approved the measure 6-1, with District 4 Councilman Daniel Rickenmann casting the lone “no” vote.
The city is contractually obligated to eventually construct a total of 1,600 parking spaces at BullStreet, according to its agreement with Greenville’s Hughes Development. Of the initial garages, the proposed 230-space structure would be built in conjunction with the planned mixed-use WestLawn building, while the 620-space garage will be built just east of the new REI outdoor store.
The city plans to fund construction of the first two garages by borrowing $16.5 million from one of its retiree benefit funds known as the “other post-employment benefit” fund. The money would be paid back in 10 years, with interest, through parking revenues and other funding. According to information presented Tuesday by city Chief Financial Officer Jeff Palen, the retiree fund in question could earn $1.5 million more through the garage-funding scenario than it would through its current investments.
City financial staff has been working on ways to finance the first parking decks at BullStreet for roughly the last eight months, Palen said. He noted an Opportunity Zone bond also was considered, but the city will save more than $4 million by borrowing from the retiree benefit fund instead.
Rickenmann said his dissenting vote came, in part, after hearing from citizens who were concerned about the city being able to pay the $16.5 million back into the retiree fund.
“Moving forward, it will be very important for council really to make sure that it is a real transparent (process) and that with any changes to the agreements, we keep people in the loop,” the councilman said. “I do think there’s a fear and I think it has a lot to do with the (pandemic) environment we are in, and we are already expecting lower revenue streams.”
Third-term Mayor Steve Benjamin called the measure a “smart, conservative and thoughtful” approach to financing the BullStreet garages.
“It inures to the significant long-term benefit of our folks, existing employees and retirees,” Benjamin said.
City officials have said construction on the first two garages will begin in the first quarter of 2021. The remaining roughly 750 parking spaces for the site would come later.
BullStreet, which has long been in development, has seen signs of life recently. The Merrill Gardens senior living complex and the aforementioned REI store opened in August, and there is a Starbucks coffee shop under construction there. Meanwhile, the WestLawn development, which will be a five-story building with retail and office space, with a law practice on the top two floors, was announced in October.
