The Price of Liberty is Eternal Vigilance
County Council, May 17
TIF district to be created for Beach Company development
Folly gets some funds for beach renourishmentWarwick Jones
Discussion over the Beach Company’s request for the creation of a Tax Increment Financing (TIF) District to assist in a new development at Kiawah took up much of last night’s Finance Committee meeting. The Planned Unit Development was approved about 3 years ago. On 1428 acres, it would entail the construction of 1285 single family homes, 450 guest rooms, 80,000 sq. feet of retail space, and a golf course.
It is a major development and the infrastructure costs associated with it are large. The Beach Company estimated infrastructure costs at about $84.5 million. And last night, it asked the County to reimburse $11.5 million of this total, representing the estimated cost of the Waste Treatment facility, through the property tax revenue derived from the TIF.
Some members of the Committee were unclear as to what precisely the Beach Company was asking. They were also uncertain as to whether it was appropriate for a new residential development, as typically the TIF districts were used for funding public, not private projects.
The Committee was told that the County would not be liable for any initial funding. The Beach Company would be responsible for all costs of development. However it was looking to reimbursement for its spending on the Waste Treatment facility. But this reimbursement was to come only if property taxes grew sufficiently to fund a bond issue. If the developer failed to develop and sell many houses and there was insufficient growth in property tax revenues accruing to the County (and other entities such as the County School Board) then there would be no bond issue or reimbursement.
Council member Schweers remarked that the failure of the project would leave the County with ownership of the Waste Facility, a facility which may not be viable or economic.
The Finance Committee voted to move ahead with the creation of a TIF District with only Council member Schweers voting against. The Committee vote surprised us somewhat as many members seemed unclear about the issues, and the presentations by the Beach Company’s consultants were of little help. We thought the Committee would defer a vote to allow more study. But it was probably swayed by the opinion of staff who recommended approval and by the fact that no binding agreement was before Council. The vote last night would allow staff to begin negotiations with the Beach Company as to the terms of the TIF. So another proposal was to be set before Council before the TIF moved ahead.
A comment by John Derby, President of the Beach Company got our attention. He was asked by Council member Schweers as to how important was the TIF district to the Beach Company moving ahead with the project. He was told that without the TIF, there would be no project. Really? A project that will probably generate over $1 billion (our estimate) on completion is dependent on an uncertain $14.5 million reimbursement sometime in the future to be viable? If that is the margin between viability and non-viability of such a large project, it is a risky project. Of course, it could also be bluff. We should add that some language in the County documentation relating to the TIF was ambiguous. It is possible that the Beach Company also is looking to assistance from other County taxing entities.
To seek a new manager for Solid WasteOther issues may remain over the duties and remuneration of the County Attorney, but at least that relating to the management of Solid Waste is moving to resolution. The County is to find a full time manager to be take responsibility for the department. The manager will be responsible to the County Administrator.
The County Administrator told the Recycling /Solid Waste Committee that a search was underway and that it was hoped that the hire would also allow the County to reduce or eliminate the need for a consultant. The Administrator would not commit to a time frame for making the hire, suggesting that it would take as long as it was necessary to secure the right person.
It seemed that most Council members were reluctant to relieve County Attorney Dawson of his management responsibilities immediately and some talked of the need of an orderly transition period to ensure the continued success of the department. Although not specifically addressed at last night’s meeting, it seems County Attorney Dawson will continue to play the major role in the management of the department until a replacement is found.
Small contribution for Folly Beach renourishmentThose of us who have visited Folly Beach recently can sympathize with the plight of the Town. So much sand has been washed away that the viability of the town as a beach resort has to be threatened. The Mayor of the Town was at last night’s meeting to support a request by the Town for $50,000 in Accommodation Tax funding. He said that the estimated cost to “renourish” the beach was $18 million. We thought such a small amount would contribute little to the project but as he went on to explain, the Federal Government would bear the brunt of the cost but to do so, the Town had to provide $2.7 million in matching funds. In that context, the $50,000 was more significant.
The Finance Committee supported the Mayor and agreed to the funding, and to another $40,000 to help fund the extra policing of the town during the peak tourist season.
There was not a lot of discussion about the request and probably most Council members appreciated the gravity of the Town’s problem. But we cannot help but ask as to whether renourishment is a lost cause. How long will it be before nature takes its course and strips the beach of its sand again? And the town is looking again for funds? Nobody asked these questions, but they were valid. After all, the last renourishment was only 7 years ago.