The Rock Hill City Council on Monday night gave its support to extending the life of a special tax district near downtown, but the plan’s fate still hinges on the city gaining similar approval from the Rock Hill school district and York County Council.
In recent weeks, some county and school district leaders have said they aren’t sure they can back the tax district plan, which requires that some future property tax be diverted away from schools and York County public services. City officials are pushing for the plan, saying economic development efforts in Rock Hill’s old textile area are dependent on the special tax district.
If officials agree to the plan, the county and the school district would not receive for another 25 years property tax from future development in a proposed urban business park called “Knowledge Park.” Knowledge Park plans call for construction of offices for high-tech companies, restaurant and entertainment venues, and residential buildings.
Plans for redeveloping old textile land and buildings gained momentum in 2004 when the city of Rock Hill, the Rock Hill school district and the York County Council agreed to establish a tax increment finance or “TIF” district along West White Street, to include the the old Rock Hill Printing & Finishing Co. site, commonly called the Bleachery. Based on the 2004 agreement, the special tax district is set to expire in 2029.
In South Carolina, cities can use tax districts to spur economic development in parts of the city that are run-down or have old, abandoned buildings. Municipal tax districts do not raise current property tax rates.
By setting up a special tax district, Rock Hill can borrow millions of dollars to pay for public improvements around Knowledge Park – such as road construction or utility system upgrades – which could motivate businesses to invest in the area. After borrowing money to make improvements, Rock Hill plans to use future property tax money to repay the loans.
The money from new development that is used to repay Rock Hill’s loans is property tax that would otherwise go to York County or the school district.
Not much has happened within Rock Hill’s Bleachery-area tax district over the past decade, and the city needs more time to borrow money and exclusively collect property tax in the area, officials said Monday night.
Rock Hill officials want an extra 10 years added to the life of the district. The recession, destructive fires at the Bleachery and the death of a former businesswoman hoping to revitalize the property were setbacks to development, said Rock Hill Economic Development Director Stephen Turner on Monday.
Without extending the life of the district and including some nearby streets, Turner said, “we’re going to choke the redevelopment.”
To go along with the city’s plan, school district officials may ask for financial support from Rock Hill to make up for the property tax they won’t see until 2039. When the school district last agreed to the tax district, Rock Hill officials agreed to amend the set-up of other tax districts in the city, which resulted in $19 million extra going to schools over recent years, Turner said. The city also agreed to pay for police officers working in Rock Hill schools.
The city is negotiating with the school district, Turner said, to see what could be offered in exchange for supporting the extension. He declined to offer specifics of what the school district has asked for.
While the council’s vote of support Monday was unanimous (with Councilman Kevin Sutton not in attendance), the school board spent more than an hour behind closed doors discussing “legal issues” related to the tax district. Turner says he’s optimistic that school officials will sign off on the plan, and there are likely to be “special conditions” agreed to in order to obtain school district support.
The school board didn’t vote on the issue Monday night but said it’s compiling information before deciding whether it supports extending the life of the tax district.
The Herald’s Rachel Southmayd contributed.