August 9, 2014

Knowledge Park plans for Rock Hill missing two key pieces

Efforts to develop parts of downtown Rock Hill into a high-tech corridor are behind schedule in two key areas, but organizers say several steps have been taken since a partnership was selected a year ago to lead the project.

Efforts to develop parts of downtown Rock Hill into a high-tech corridor are behind schedule in two key areas, but organizers say several steps have been taken since a partnership was selected a year ago to lead the project.

A detailed agreement with the partnership of Sora-Phelps won’t be signed by the original Sept. 18 deadline. Also, changes to a downtown tax district that’s expected to fund much of the public aspects of the project – called Knowledge Park – have not been made.

But the city and Comporium Communications have taken steps to provide services to the area, supporters say. Plus, efforts are underway to develop the Lowenstein building once used by the Rock Hill Printing & Finishing Co. between downtown and Winthrop University. Renovations of the Lowenstein building could start in the first quarter of 2015.

“It is a speculative venture and it’s not being done on the back of public funding, but the public is seeing things happen,” said Andy Shene, chair of the Knowledge Park Leadership Group, businessmen who are actively advocating for the project.

The Knowledge Park is a vision of the city, Winthrop University, the Rock Hill Economic Development Corp. and the leadership group to redevelop the area between Winthrop and the downtown with a variety of uses: residential, retail, and most importantly, offices for high-tech companies.

A major component is the redevelopment of the former Rock Hill Printing & Finishing Co. site, commonly called the Bleachery. It also includes downtown development such as an arts center and park.

A major goal of Knowledge Park is to bring more jobs to the area.

A key next step is reaching an agreement among Sora-Phelps, the city, Winthrop University and other partners. The agreement will list specific costs, revenue projections, and detailed timelines for each new development project at the 23-acre Bleachery site. The agreement would list the required public and private investments in each project.

Sora-Phelps is a partnership between Sora Development of Towson, Md., and Phelps Development of Greeley, Colo.

A master development agreement could take months to complete, say city officials. The initial one-year memorandum of understanding among the city, Sora-Phelps, Winthrop University, the Rock Hill Economic Development Corp. and the Knowledge Park Leadership Group of local businessmen expires Sept. 18.

The initial memorandum gave Sora-Phelps exclusive rights to develop the Bleachery and other city-owned, downtown properties. It also specified that Sora-Phelps, at its own expense, would prepare a master development plan and advise Winthrop on how its need for new facilities could be incorporated into the Knowledge Park.

Sora-Phelps fulfilled the master development plan obligations last March, unveiling plans for 19 buildings on the Bleachery site. As proposed, the project would have 1.3 million square feet of retail, restaurant, office and residential space. The plan calls for an overall investment of $200 million that could yield $2.8 million in additional real estate taxes annually. New businesses in the Knowledge Park would create about 1,000 jobs, Sora estimated.

City Manager David Vehaun said the city is considering its options, but may simply continue the public-private partnership without an agreement. It would not be the first time the city has done that, he said.

“Ideally, we would have something in place,” Vehaun said. But the Sept. 18 date was always a “soft date” rather than a firm deadline, he said.

The city and Sora share blame for the agreement’s delay, Vehaun said.

Tom Fore, founder and director of Sora Development, said blending new construction with historic renovations has slowed the process. Fore said Sora adjusted its plans when it learned the entire site was on the National Register of Historic Places.

Sora had planned to remove an unused reservoir and construct a new building there. Because of the historic designation, Sora will keep the reservoir, resulting in more engineering and design work, Fore said.

The lack of a binding development agreement and a revised tax district is not a sign of problems, say city officials, business leaders, and Sora officials. It is because the Knowledge Park is a complex effort.

A second key step is revising a special downtown tax district that includes the former textile site. The city wants to use revenue from the district to finance public improvements at Knowledge Park. The city has improved roads and utilities around the Bleachery site but will need to extend utility services and roads to specific development projects.

Revising the district requires the approval of Rock Hill City Council, the York County Council and the Rock Hill School Board. The changes would allow the city to borrow $56 million instead of $40 million and change when the tax district expires. The city wants to reset that date so that it has five years to sell bonds and 20 years to pay back the money.

The county council and the school board would have to agree not to accept any additional property tax revenues from within the district for up to 25 years.

A public hearing on revising the special tax district is Sept. 8 at City Council.

The revised tax district is essential, say city and business leaders. “The city is not in the position to commit to the Knowledge Park without” the tax district changes, said Stephen Turner, the city’s economic development director.

While changes to the tax district have been a key financial aspect of Knowledge Park from the beginning, city officials did not start efforts to revise the district until this summer.

Participants stress much has been accomplished over the past year, from installing utility lines to building relationships among the partners.

The improvements include an ongoing project to improve West White Street by installing new sidewalks, roads and utilities.

City officials have said they will spend as much as $60 million for improvements and new construction around the Bleachery and downtown. Among the projects are a new $4.3 million water tank and new electric substations costing $2.5 million to serve the area. Downtown projects include a $3.4 million downtown parking deck and $1.4 million for Fountain Park.

Comporium Communications has committed to spending more than $1 million to bring gigabit Internet service to the Knowledge Park and downtown. Having a high-speed Internet connection will be essential in attracting the kinds of technology companies envisioned for the Knowledge Park, say Comporium and city officials.

Comporium’s construction of the Fountain Park Place office building and a new Family Trust Federal Credit Union headquarters adjacent to the Bleachery are signs that “you can plan for your future in the Knowledge Park,” Shene said.

The Lowenstein building, the massive structure that fronts on White Street, is being redeveloped by Sora-Phelps and local businessmen Gary Williams and Skip Tuttle. McClure, Nicholson, Montgomery of Charlotte is the architect for the project.

Most of the work at the Lowenstein building has focused on its distinctive large windows that form its facade. The windows are thin plastic.

Sora-Phelps has hired a consultant to determine what can be done to the windows while still meeting strict preservation standards of the National Park Service. Meeting those standards is critical to getting historic tax credits, a key part of the project’s financing.

Williams, who renovated the nearby Cotton Factory and located his college debt collection business there, knows about historic window preservation. Renovations of the Cotton Factory were stalled for six weeks while he waited on a decision about which windows met the standards.

The Lowenstein building is one of the initial bookends for the Knowledge Park. The other is student housing off Stewart Street near the Winthrop Campus. The housing could be paid for by private investors or by Winthrop.

Organizers have considered Winthrop to be a key partner in the Knowledge Park since the concept was announced in fall 2012. Former Winthrop President Anthony DiGiorgio was a supporter of the Knowledge Park.

The June firing of DiGiorgio’s successor, Jamie Comstock Williamson, may have slowed the process, some say.

Since that decision, “the conversation has slowed, but there is still strong interest,” from Winthrop, said Turner. Kathy Bingham, chairman of the university’s board of trustees, recently joined the Knowledge Park Leadership Group. Williamson’s husband, Larry, previously represented Winthrop on the leadership group.

Vehaun said the city realized before Williamson was fired that it needed to have a strong relationship with both Winthrop’s president and its board of trustees to proceed with the Knowledge Park.

For 2015, the city and Sora expect construction to start in earnest.

“The complexity of the historic issues, some final site environmental cleanup, and the change in university administration have each been obstacles,” said Tom Fore of Sora. “However, we expect to being construction early next year and continue at an aggressive pace.”

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