Apr
16

Revival of Columbia’s North Main Street Proposed

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North Main Street / Revival through tax plan pitched

Columbia City Council considering special funding to spruce up long-suffering neighborhoods

Apr. 16, 2008

By ADAM BEAM – The State

Before there was the Vista — an enclave of downtown restaurants and art galleries — there were abandoned warehouses and railroad tracks.

But just as a special tax district made the Vista what it is today, a trio of Columbia City Council members hopes the same thing can work for North Main Street.

Council members E.W. Cromartie, Sam Davis and Tameika Isaac Devine want to draw a circle around some north and east Columbia neighborhoods and funnel a portion of their property tax dollars back into streetscaping and assorted development projects.

Council members and community leaders say it would provide a steady stream of money to improve an area that has been riddled with crime and blight while the Vista and Five Points have reaped the benefits of city-spurred development.

“This shows that maybe we are finally getting listened to — if they come through,” community leader Alvin Hinkle said.

Some city officials, however, are concerned how the plan would affect city coffers.

The idea will be discussed at tonight’s City Council meeting. It’s the same thing the city did in the Vista 20 years ago, only this time it includes city property taxes only, not county and school district taxes.

Here’s how it would work:

• An office building on North Main Street pays $10,000 inproperty taxes. After the city pays for a streetscaping project in front of that office building, the building’s value increases, and it’s property taxes go up to $20,000.

• That $10,000 difference would not go into the city’s general fund as it normally would. Instead, it would go into a fund that flows money to specific projects in north and east Columbia.

• City staff members would predict how much money would be generated from the property tax increases and issue bonds — or borrow money — to pay for the projects. Once the property values increase, that money would go to pay off the bonds.

The bond money would go toward specific projects, Devine said. One option is the Columbia Housing Development Corp.’s plan to build a mixed-use development — a combination of housing and retail — on Beltline Boulevard.

She believes the city could issue a $30 million bond.

And it’s not just property taxes. Additional fees could be collected, such as business license fees from new businesses that are generated as a result of development.

“I’m really supportive of taking a look at this,” Councilwoman Anne Sinclair said. “But we need to be very careful about pledging future money for an extended period of time unless we are fairly confident that that money is going to come in.”

The dangers include possible revenue shortfalls in future budget years.

“If you did a huge area, let’s say you did the entire District 2 (which includes eastern Columbia), that would be a huge impact to the general fund,” said Dana Turner, assistant city manager for commerce and development.

Cromartie said the general fund would not be affected.

“There is no money taken from general fund,” he said. “It’s the increase in value of the property.”

The tax district would be set up under state law allowing the creation of municipal improvement districts, which have become a popular funding source for S.C. cities and towns over the past six years, said Howard Duvall, executive director of the Municipal Association of South Carolina.

Most of the municipal improvement districts in the state have been used in the Lowcountry cities of Beaufort, Hardeville and Ridgeland on new housing developments.

Duvall said Columbia’s plans for using the increment in property taxes would be a first for South Carolina.

“I think that would be a legitimate way to do it,” he said. “It’s a very flexible, easy-to-use method of getting extra services or extra infrastructure paid for by a certain segment rather than by the whole town.”

While this idea worked for the Vista, the city ended up losing some money on the deal. The city had trouble keeping up with how much money it was allocating for the Vista’s tax district and ended up having to pay Richland County $5.5 million.

Devine said this plan would be easier to manage because only the city’s taxes would be involved.

LINK TO ARTICLE HERE:
http://www.thestate.com/local/story/377267.html

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