Would private investors help pay for city parking garages at Bull Street?

Mayor Steve Benjamin is looking into ways to build parking garages in the Bull Street neighborhood by splitting the cost with private companies, but City Council has yet to sign onto the plan.

Benjamin said he has been meeting with developers, garage builders, garage managers and city staffers to come up with a firm plan. He said he expects to offer one in March.

Columbia signed a contract to provide 1,600 parking spaces in the emerging neighborhood. City planners say that likely means two, 800-space garages.

Benjamin’s idea is to merge the city’s ability to borrow money more cheaply than business owners can with private companies’ assertion that they can build garages for less money than the city, Benjamin said.

“I don’t see it as a necessity that the city necessarily own parking,” he said, adding a public-private partnership would be a first for garages in Columbia. The privately owned portions of garages – which perhaps could be half the spaces – would go onto the tax rolls, Benjamin said.

If the idea could work on Bull Street, he said it could become a template for other garages needed in the city.

Meanwhile, City Hall leaders earlier this week leaned toward fewer taxpayer-backed bonds to pay for almost $19 million of Columbia’s commitment to install public services in the Bull Street neighborhood.

In addition, the prospect of creating a taxing district to pay for parking garages on the property remains an option after City Council on Tuesday dropped the idea of three rounds of bonds or a referendum as a way to borrow the money needed for roads, water and sewer lines and other public utilities on the 181-acre site.

Council did not make a decision, but asked staffers and city financial advisers to recalculate the costs of two general obligation bonds.

Chief financial officer Jeff Palen pushed council to make a decision soon. By the end of June, he said, the city will have spent more than $10 million from its general fund toward construction of the ballpark plaza, land for a park, electrical work, sewer service, demolition and other expenses.

“Our general fund will be down by $11 million,” he told council at a work session. “That’s not going to be a pretty picture.” Palen was referring to credit rating agencies’ evaluations of how much Columbia will have drawn from its primary municipal operating budget.

The expenditures are all related to development around the city’s $37 million baseball stadium that is to open in April, said Gregory Tucker, the city’s project director of the Bull Street complex.

By June 30, the city will have used the $11 million for a variety of projects around the year-round stadium, ranging from buying land for the largest public park on the complex to installing underground power lines.

In addition to the $11 million, the city has spent about $5 million for sewer and stormwater lines, Palen said. But those expenses were paid through the sewer and and stormwater budgets, not the general fund.

All of $15 million in expenses are separate from the financing of the stadium, which is being paid for through a 30-year bond that is being repaid from meal taxes paid by patrons of city restaurants and bars. The money is part of the $67.2 million the city contracted to pay to help build out the Bull Street property being developed by Bob Hughes of Greenville.

The general fund, which pays most expenses for city services, cannot continue to absorb the costs of installing utilities on the expansive property that is designed to become a residential, retail and entertainment hub.

In August, council authorized taking money from the general fund as an interim way of paying for expenses at Bull Street until a long-term financing plan is approved. Council took up that plan again at its Tuesday work session, but reached no agreement.

General obligation bonds, which are backed by taxpayer money, are generally the cheapest way for municipalities to borrow money. Under the updated draft plan for Bull Street, the city would issue a $9.6 million bond in June and about $9.35 million bond a year or so later. That would provide the $18.9 million needed so far to meet the city’s contract.

Issuing two rounds of bonds instead of the three Palen suggested Tuesday would save the cost associated with preparing the bonds.

“It won’t be a large change,” he said after the meeting. “You may have a little larger interest cost and a little smaller issuance cost.” Financial advisers are to determine the precise savings before council meets again.

This story was originally published February 18, 2016 at 6:04 PM with the headline "Would private investors help pay for city parking garages at Bull Street?."