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bhonig@beaufortgazette.com
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Instead of three local governmental bodies paying a developer nearly 7 percent interest on more than $1.5 million worth of infrastructure improvements for Greenlawn Drive, Beaufort's city manager suggested Thursday that the governments put up the money and receive 2.5 percent interest from the developer.
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Developer 303 Associates proposed earlier this year that it would spend an estimated $1.64 million to expand Greenlawn Drive, add sidewalks, bury utility lines and install stormwater drainage systems ahead of the firm's planned construction of 112 "live-work units" with single-family homes above commercial space. The company, however, wanted to be reimbursed for that infrastructure.
The original plan proposed by 303 Associates called for Beaufort to forgive up to $900,000 of the developer's future property taxes and for the Beaufort County School District to forgive up to $900,000 of property taxes to pay back the infrastructure cost. In addition, 303 Associates would receive interest at a rate of 1.85 percent above prime, or about 6.85 percent, until the infrastructure costs had been paid back.
School board members balked at that plan, saying the district was unfairly singled out, and more recent plans have leaned toward the city, county and school district sharing the debt to 303 Associates. A plan approved by the County Council's Economic Development Committee would keep $11,000, the district's current annual property taxes for the lots in question, going to the school district each year, while the city and county would forgo all taxes until the infrastructure debt was repaid.
City manager Scott Dadson, who met with school board members last week, presented a new scenario Thursday, under which the city, county and school district would loan money to 303 Associates for the infrastructure improvements. Dadson stressed that the $1.64 million cost estimate is about 1 1/2 years old, and the actual cost could be higher.
The city, county and school district would charge 303 Associates 2.5 percent interest for a seven-year term, Dadson said, which is the city's cost for borrowing money.
The money would be recouped from 303 Associates simply by the developer paying its tax bill, which would grow larger as the property was developed and its appraised value subsequently increased. The firm’s annual property taxes paid to the city, county and school district for its Greenlawn Drive parcels have been projected to grow from about $20,000 in 2008 to about $7.8 million if the proposed project is completed. "It’s the same deal as before, except 303 borrows the money from the Redevelopment Commission … and when that (tax) credit is being paid, we're simply paying ourselves back," Dadson said at a meeting of the Beaufort Redevelopment Commission on Thursday. "303 ends up with the debt (instead of the city and county)."
He noted that if the scenario comes to fruition, it could create a "revolving loan fund" to pay for similar projects in the future.
Though no numbers have been finalized, Redevelopment Commission members discussed Beaufort putting up half the money for the Greenlawn Drive infrastructure cost and the county and school district each putting up one-quarter. Dadson said the county and the school district also could choose to contribute a quarter of the cost by forgoing taxes, such as was originally proposed by 303 Associates, instead of contributing cash up front.
The commission voted to have Dadson continue discussions with the county, school district and developer toward solidifying that deal. The commission, however, did not revoke its earlier endorsement of the original proposal, under which 303 Associates would pay the infrastructure costs up front.
Courtney Worrell, who represented 303 Associates at the Redevelopment Commission meeting, said it was too early to offer an opinion of the new scenario.
"We're happy to consider it," she said. "We'll take it under advisement."
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