The Carolina Panthers asked York County for bond money help. Here’s the latest.
After an hour in closed-door discussion Monday night, York County Council didn’t make a decision on a request by the Carolina Panthers to help the city of Rock Hill with infrastructure costs.
Council went into executive session at the end of its regular scheduled meeting. The only item for discussion was legal advice on a contractual matter related to the GT Holdings (Panthers) tax incentive agreement for its new team headquarters in Rock Hill. Council came back and adjourned without any vote related to the team.
A May 6 email from Panthers Chief Operating Officer Mark Hart to county manager David Hudspeth asks the county to work with Rock Hill and the project developer to secure bond money that, as of that date, hadn’t come from the city. Hart cited an agreement the team has with Rock Hill and county where the city would secure $225 million in bonds for infrastructure at the team headquarters and accompanying development.
Bonds were to be issued by the end of October 2020. An agreement then pushed the date back to Feb. 26 of this year, Hart wrote, but as of the email date the bonds still hadn’t been secured.
“Unfortunately the funding for the infrastructure remains at a crossroads,” he wrote.
Hart wrote of concern that without county help, the city won’t be able to secure bonds for the project. Without the $225 million in bonds there is “a high risk necessary infrastructure objectives will not be met,” Hart wrote.
He added the team hasn’t issued Rock Hill a default notice and plans to continue working with the city to make the project happen. A Panthers team spokesperson declined further comment on the situation.
Rock Hill official cites higher risk
Although the city has passed the deadline to secure the $225 million in bonds, City Manager David Vehaun told The Herald via phone Tuesday that Rock Hill is not in conflict with its deal with the Panthers.
“We are required, under the finance agreement with the Panthers, to utilize our best efforts to issue bonds by the spring,” Vehaun said. “Although there was a date there, the way it was written by the attorneys, we are not in default just because that date has passed, or the fact that bonds haven’t been issued.”
The city is working on implementing a plan that will get the bonds issued, he said.
Vehaun said there’s a higher risk associated with the Panthers’ bonds because, under the agreement, Rock Hill is not required to provide any financial guarantee on the debt.
“The people who loan the money that’ll be used to build the roads and the infrastructure out there are doing it with the understanding that there’s no guarantee behind the debt,” Vehaun said. “They’re taking whatever risk that they decide is the appropriate amount of risk to lend the money, knowing that they’re going to get repaid only from the development as it occurs on site.”
Due to the lack of guarantee, city officials have discussed issuing the bonds in parts, Vehaun said.
So, the city plans to issue $135 million in debt now and issue the remainder at a later date when more construction has been completed.
“There’s a better guarantee that they’re going to get $135 million back than if they’re going to get $225 million,” Vehaun said. “That’s been the path that we’ve been heading down in order to get at least some of the money issued.”
However, the Panthers want all $225 million at once, causing the city’s delay in efforts to secure the bonds, Vehaun said.
“Since the city remains unwilling to move in that direction, the Panthers have requested assistance from York County to explore other options, as we understand it” he said. “The Panthers have not said anything to us about this and certainly, the county has not said anything to us about it.”
If the county wants to assist Rock Hill is securing the bonds, Vehaun said the city would not object.
“However, a city government guarantee of $225,000,000 in debt is something we have made clear to the Panthers from the beginning that we are unwilling to undertake — now or in the future,” he said.
How the deal evolved
In April 2020 the county agreed on a tax incentive deal that involved the team, city and Rock Hill School District. That arrangement, finalized on a public Zoom meeting due to the COVID-19 pandemic, was that the city would forego all its property tax revenue from the project for up to 30 years. The district would give up 75% of its revenue and the county 65% of its revenue. Those forfeited taxes would provide $225 million to pay off bonds for needed infrastructure.
Once the infrastructure is paid for or the incentives expire, all three entities would collect full tax amounts from what was anticipated to be a $1 billion to $2 billion project.
The tax incentive agreement passed on a 4-3 county vote. There was concern the incentive deal would give the Panthers an advantage over development elsewhere in the county due to the lower tax rate it could offer.
Councilman Robert Winkler said at the time the deal would give team owner David Tepper a built-in advantage for 30 years. Councilwoman Christ Cox, now chairwoman, also voted against the plan amid concern for tackling so big an issue during the pandemic when the public couldn’t gather to make their voices heard.
“This is the biggest property tax giveaway in the history of York County, maybe in South Carolina,” Cox said ahead of the decision last year. “And we did it during a pandemic.”
Other council members focused on what the incentive agreement would bring to the county.
Councilman Joel Hamilton said at the time an investment like the Panthers project hasn’t been seen in York County and he wouldn’t want to explain that the county lost it over Zoom issues. Councilman William “Bump” Roddey said then the opportunity was too big to miss.
“This is going to be one of those destinations that can compete with any of them across the world,” Roddey said then.
‘Nothing for county leaders to discuss’
The Panthers broke ground in mid-2020 on the 240-acre headquarters project off I-77. It includes a new interstate exit at mile marker 81. It will bring team headquarters and practice facilities, an orthopedic medicine facility, indoor and outdoor space to host large events and a mix of hotel, office, retail and other uses.
Plans are to open the first phase, which will include team facilities, in 2023.
Roddey, who represents part of Rock Hill, told The Herald via phone Tuesday that the deal hinges on the infrastructure planned with the $225 million in bonds.
“You can’t have a practice facility, you can’t have a headquarters, you can’t have hotels, retail and commercial space if you don’t have water, sewer and roads put in,” he said.
Roddey, who is running for Rock Hill mayor, said the city has not reached out to York County for assistance in securing the bonds.
“This is very worrisome,” he said. “Until Rock Hill steps up and reaches out to us, it’s in Rock Hill’s court as to where they’re going to get help from and how they want to move forward.”
Although council did not come to an official decision Monday night, Roddey said the county is committed to seeing the deal through.
“Obviously, we’re going to do what’s right for our taxpayers of York County,” Roddey said. “We’ll do what’s right to help the city of Rock Hill, as well as keep this deal in play because it’ll have a huge economic impact not just on Rock Hill and York County, but this entire region.”
After the Panthers raised concern over the city’s delay, Cox said in a statement Tuesday she reached out to Rock Hill officials “to invite conversation,” but she’s not yet heard back.
“There is no proposal to consider and any changes to the agreement would require a complete ordinance revision and a public hearing,” she said. “At this point, the council is simply gathering information from legal and bond counsel.”
Cox said if Rock Hill were to ask the county for help, council would review the request and “determine whether it is in best interest of York County taxpayers.”
“Absent such a request, however, there is nothing for county leaders to discuss,” Cox said.
This story was originally published May 18, 2021 at 11:08 AM with the headline "The Carolina Panthers asked York County for bond money help. Here’s the latest.."
