The city of Rock Hills nearly 30-year partnership with Rock Hills Economic Development Corp. is now further defined through a joint investment account.
City Council members Monday approved a $386,000 deposit into the account. In exchange, RHEDC will give the city the deeds to five pieces of land with a tax value of $386,000.
RHEDC is a nonprofit organization which provides business incentives to developers and markets property for new projects in the city, including land in Rock Hills business parks.
Councilman Kevin Sutton recorded the only dissenting vote, saying I dont want to see our cash going to them in exchange for land that may be hard to sell.
Sutton asked if the city would get its cash back or have to keep the land if the council decided later that the deal wasnt beneficial to Rock Hill.
Stephen Turner, RHEDCs executive director, said the initial $386,000 could be returned to the city and the land given back.
Rock Hill has a city account devoted to supporting economic development activities, under the discretion of the council.
Turner, also the citys department head in economic and urban development, said that account has about $2.2 million in it. That pool of money is typically made up of the sale of city land and property, he said.
Rock Hill has used that account before to reimburse various city fees as incentives to redevelop the Cotton Mill downtown.
The city also paid rent for The Hive, a downtown organization that trains Winthrop University students in marketing and business skills. Site cleanup at Manchester Meadows also was paid for through the citys economic development activities account.
Money put into the joint account with RHEDC will limit the councils flexibility in using its cash, Sutton said.
Neither the city nor RHEDC can choose to spend any of the money without approval from the other, according to the agreement signed Monday night.
The city will control the account and will be responsible for oversight. A fund management committee made up of some council and RHEDC board members will make recommendations to both the organization and the city on how to spend the money.
Final approval on spending must be given by the city, according to the agreement.
Councilman Jim Reno said the citys own economic development activity account is not a replenishing fund.
This new account may be a way to see reoccuring revenue, Reno said.
(The council) may lose some flexibility but that fund has a better chance of growing, Reno said.
The $386,000 original contribution, Councilman and Mayor Pro Tem John Black said, is a small percentage of the $2.2 million in the citys economic development account.
He said the city would probably spend that money very quickly on its own and instead RHEDC could use the money to support projects already on the books.
RHEDC could be out of cash years from now, Sutton said.
He recalled times when he thought RHEDC had brokered fruitless deals or spent money on City Club memberships.
The taxpayers of Rock Hill paid off bonds on TechPark but yet RHEDC is getting cash from the sales, Sutton said.
I see this as us sort of coming to bail them out.
In response to Suttons comment about the City Club memberships, Councilman Osbey Roddey said, You cant deny it happened, but to me thats minor.
This is genuinely a total effort to bring about a better and more vibrant Rock Hill, Roddey said.
Turner said RHEDC has a healthy balance sheet and much of its assests are tied up in real estate.
Some of that real estate, including a site at TechPark valued at $150,000 and 4 acres in the Waterford business park off Dave Lyle Boulevard valued at $151,400, will be given to the city in exchange for cash in the investment account.
RHEDC presented development possibilities to the city in January for spec buildings property that is ready for occupancy and sites that needed work like grading, but the organization told the city it didnt have the immediate cash to pay for the work needed, Turner said.
The group is holding its cash, he said, for the redevelopment of the Woolworth building in downtown.
With help from the city, Turner said, RHEDC can do things that government entities cant such as entering deals with private investors who want to build and bring jobs to Rock Hill.
The citys own economic development account is spent as the need arises, Turner said, and isnt aligned with specific goals. RHEDC has identified those development and growth goals, he said, but the resources arent there right now to make it happen.
City Manager David Vehaun said the city supports this joint effort because cash will get deals done. The partnership between the city and RHEDC has always been there, he said, and now its a matter of moving cash to the group that has the most flexibility.
Bev Carroll, chair of RHEDCs long-term planning committee and former chair of the board of directors, said the organization is not in need of bail-out.
We have assests, we have land, she said.
Many of the groups buildings downtown have been developed into successful businesses, Carroll said.
In addition to Vehaun, Mayor Doug Echols and two council members sitting on RHEDCs board of directors, Carroll said Reno and Black were on the committee to draft the proposal for setting up the investment fund.
Reno and Black are fiscal conservatives, she said.
They dont hit me as bail-out people.
Anna Douglas • 803-329-4068