Rock Hill school board, city leaders negotiate over tax district, proposed downtown streetcar

Paying for a possible $25 million streetcar between downtown Rock Hill and Winthrop University has become one of the latest issues raised during ongoing negotiations between the Rock Hill School District and the city over a special tax district.

The tax district proposal is designed to help the city borrow and pay back loans of up to $56 million. The money would go toward improving streets, adding utilities and making other improvements for a business park planned near downtown, called “Knowledge Park.” Central to the Knowledge Park plan is the proposed redevelopment of the old Bleachery land and nearby textile buildings.

Some people have suggested that a streetcar running through the urban business park would promote foot traffic around downtown and attract new industries to Rock Hill. The Rock Hill City Council has not yet voted on whether the city will build a streetcar system.

School board members sent a proposal to city officials earlier this week suggesting that public tax dollars not foot the bill for the streetcar. Board members believe a streetcar for Knowledge Park should “break even” or pay for itself, said Chairman Jim Vining this week.

“There are other avenues for raising the money – (the city) may just not be willing to use them,” Vining said. He did not specify other options for funding the streetcar.

The school board’s position on the streetcar could change after further discussion, Vining said. He emphasized that “nobody has drawn lines in the sand” over the tax district for Knowledge Park.

The special tax district is formally known as a TIF, or “Tax Increment Financing,” district. Public projects such as a streetcar, road improvements and utility system upgrades are eligible to receive money from a TIF district.

Through a TIF district, municipalities such as Rock Hill can exclusively collect a portion of the property tax revenue generated in the district. Ordinarily, all property tax revenue collected in the district would be shared between the school board, city and county.

When a TIF district is created, the schools, city and county continue receiving the same amount of property taxes from the area that they had been receiving. But any additional taxes generated by growth in the district is diverted for other projects.

The additional revenue comes from growth, not higher tax rates.

With a TIF district, Rock Hill can borrow money by committing to pay back the loans with the additional property tax revenue.

A TIF district already exists near downtown Rock Hill to help spur economic development around the old Bleachery site, also known as the Rock Hill Printing and Finishing Co. property. Recent negotiations between the school district and the city revolve around Rock Hill’s request to amend the TIF district.

Proposed changes to the district include:

Before city officials can move forward, they need the Rock Hill school board and York County Council to agree because those entities must forgo some property tax revenue.

City officials say the expanded TIF district is crucial for Knowledge Park to attract companies and developers.

Supporters say Knowledge Park has the potential to transform old textile buildings and land into a high-tech and creative industry business park with nearby entertainment, residential and restaurant offerings.

A majority of the school board “philosophically” agrees with the city’s Knowledge Park plan, Vining said. Board members realize, he said, that it’s unlikely private investment will happen on the Bleachery site and surrounding property if the city doesn’t intervene.

Rock Hill Mayor Doug Echols bills the city’s future contributions to Knowledge Park as “setting the table” for private investors to build and develop the nearly 100-acre area.

To help Knowledge Park, Rock Hill could spend nearly $100 million on public projects, including:

City mulls school board proposal

This week’s proposal from the school board lists the terms that city officials and board members have already agreed to for the TIF district, Vining said. Board members added two items that city officials say they are still considering.

The board’s position on how the streetcar would be paid for was one of the additions. The other relates to a special education tax levied on businesses and collected by York County for the four school districts. The tax is separate from those levied individually by the districts.

Vining says the school board wants more information about who has “legal authority” over the education tax. In its proposal earlier this week, the school board asked that the county-wide tax be exempted from the TIF.

Other parts of the proposal include not using TIF money to pay for utility system upgrades around Knowledge Park. City officials, Vining said, offered that exemption as an incentive for the school board to approve the TIF district changes.

The city of Rock Hill, Vining said, runs its water, sewer and electricity departments like a business, with customers paying for the services. Any system improvements, he said, should be funded from the charges for utility services or another source – not the TIF money.

But, Echols said, the city needs the ability to pay for utility upgrades to service new development in Knowledge Park. If a company wants to move to Rock Hill and has special needs for utility infrastructure, city officials can’t have their “hands tied” and still make the deal, he said.

City officials must fully evaluate the latest terms discussed with the school board, Echols said. He also stressed that the streetcar project is still conceptual.

The developer who the city tapped last year to break ground in Knowledge Park has said the public and private investments could yield close to 1,000 jobs and boost property tax revenues by $2.8 million annually.

Though the TIF district requires the school district and York County to give up some property tax money in the short term, the redevelopment will pay off for them in the long term, Echols said.

While final terms of the TIF agreement are unknown, the mayor said, he’s confident the plan will win broad community support. Still, negotiating with school and county officials is like having many “cooks in the kitchen and everyone wants to add a little something for the recipe.”

All parties are negotiating in good faith about the district, the mayor said, but “there are just some things in the end that we may not be able to live with.”

This story was originally published September 25, 2014 at 8:19 PM with the headline "Rock Hill school board, city leaders negotiate over tax district, proposed downtown streetcar."