Columbia’s first, large student housing complex near downtown, the 400-unit Aspyre building along the edges of Olympia, is seeking a 50 percent tax break that would match what new student housing projects are getting.
Aspyre would be the first existing complex to seek the break, which would cut its property taxes from the current $1,041,282 million in 2014 to $520,641, according to tax records City Hall compiled in preparation for a first vote Tuesday on the proposal.
The tax break would last for 10 years and the city’s portion of the nearly $521,000 in current yearly revenue would be $97,881 under the new tax structure, the figures show. The rest would go to Richland District 1 schools and county government. Richland County Council must give the plan final approval after City Council casts a second and final vote.
Columbia economic development director Ryan Coleman, who worked on the proposal along with attorneys for Aspyre’s developers, John Holder of Atlanta and Assembly Station Columbia LLC, said he was not aware until a reporter told him Monday that Aspyre is for sale.
“Does it make its cash flow better?” Coleman said when asked if the tax break is timed to attract more buyers. “A 50 percent tax break ... I would assume that it would.”
Asked the same question, Councilman Cameron Runyan said, “I’m sure that that would make it much more marketable.”
Runyan stopped short of saying that is the motive for owners Holder and the limited liability corporation. Runyan said he was undecided on how he would vote.
Efforts to reach Mayor Steve Benjamin and Councilwoman Tameika Isaac Devine were unsuccessful. Councilman Moe Baddourah, however, said he will oppose the tax break. The city has offered too many student housing tax breaks, Baddourah said.
Aspyre went on the market Aug. 24, said Ryan Lang of Austin, Texas-based ARA Newmark, which is marketing the complex for the owners. Initially, the tax break was scheduled for a council vote on Aug. 18.
Lang would not discuss the asking price. But he said the complex has attracted “a ton of interest” in a week’s time. A date is to be set later this month for all offers to be submitted, Lang said.
Efforts to reach Holder were unsuccessful.
Holder built the $45.1 million Aspyre at Assembly and Whaley streets six years ago when few developers would build student housing in or near downtown. Most complexes were being built just outside the city limits or in adjoining towns. Extending the tax break to Aspyre would make it more competitive with newer developments, supporters of the plan said.
Within the past year or so, nearly 6,000 student beds have opened or are being constructed in 10 high-end complexes on or immediately around the University of South Carolina campus.
Even with the tax break, Coleman said the city still would net $226,973 annually from the four-story, 760-bed Aspyre complex because its water and sewage bills would amount to some $142,000 and its business license fee would be almost $7,400. The city calculates the cost to provide the complex with police and fire protection is about $20,300 yearly.
“It’s still a moneymaker for the city,” Coleman said of the revenue after the tax cut.
Aspyre is the only complex built before the city began offering the half-off tax breaks that also would meet the standard of being at least a $40 million investment and have a minimum of a 400-space parking garage, Coleman said. The tax break would be the same as those extended to other eligible new student housing complexes, the economic development director said.
Runyan said he’s concerned the city has reached a saturation point with student housing drawn to the city center by tax breaks. He’s thinking of calling for a moratorium.
“We’re running the risk of creating a student housing bubble,” he said. “I don’t know whether we need to stop this.”
Reach LeBlanc at (803) 771-8664.
If you go
Columbia City Council meets Tuesday afternoon and evening. It’s scheduled to take up the half-off tax break at its 6 p.m. meeting.
Where: City Hall, 1737 Main St.
Time: 2 p.m. for a work session in the second-floor conference room. The regular council meeting begins at 6 p.m. in council chambers on the third floor.