City nailing down how to pay for $62 million in Bull Street infrastructure

Columbia will issue more than $62 million in bonds to help pay for some $67 million in infrastructure and parking projects needed to move forward with the Bull Street development.

With construction well underway on the new Columbia Fireflies’ minor league baseball stadium and work poised to begin on a retail and office building along the first-base line, the city is on deck to finance a number of projects, including the first of two parking garages in the substantial downtown development.

As part of the original agreement with Bob Hughes, the city is obligated to pay for some $31 million in infrastructure plus the cost of two 800-space parking garages, now estimated to cost a total of $36 million. The Greenville developer is overseeing the build-out of the 165-acre Bull Street campus that is expected to be the biggest development in downtown’s history.

City Council on Tuesday opted to borrow money by issuing a series of four, 30-year installment revenue bonds to pay for the bulk of its infrastructure and parking obligations.

The city also has set aside $4.7 million from its water, sewer and stormwater funds for infrastructure projects related to the source of those funds. Added to the $62 million bond debt, that brings the total of the city’s commitment to $67 million.

The city has various options to pay off the debt.

They include funds set aside in the city’s annual general fund budget, parking revenue, bonds paid off using the hospitality taxes charged on prepared meals or general obligation bonds, which are paid from the city’s existing property tax revenue stream.

If the city uses property taxes to pay off the debt, property taxes would not increase, said Jeff Palen, the city’s chief financial officer.

Another possible source of repaying the debt is revenue from the parking garages the bonds will go toward building. Palen said each of the two garages could possibly generate some $500,000 in revenue each year, which could be used to help repay the bonds, since the city will own the garages. Construction is likely to begin on the first of the garages in the next year to 18 months.

The first set of the four infrastructure and parking bonds, amounting to $26.6 million, likely will be issued next spring. The subsequent bonds will be issued early each year, through 2019.

The city already borrowed $29 million in bonds, to be paid off over 30 years using its 2-percent hospitality tax on prepared meals and drinks, to help pay its part of the $37 million baseball stadium.

With the newly pending bond issuances, taxpayers are likely to be even more anxious to know developer Hughes’ long-promised plans for retail development, Councilwoman Tameika Isaac Devine said.

Hughes and his partners have been tight-lipped about the more than 40 retailers and restaurants they say have signed letters of intent to locate in the development.

“I know that he’s still working on some stuff, but you know that’s going to come up again as we get closer to issuing bonds,” Devine said. “We need to look at the reality of announcing some things soon.”

City staff will return to council at its next meeting with a reimbursement resolution, which will allow the city to start paying Bull Street bills now, then reimburse itself once the bonds have been issued.