That redevelopment of downtown Rock Hill? Here’s how much public money it will take.

Rock Hill has unprecedented economic investment coming. While much of it is private, it’s going to take some public money to make that redevelopment happen.

On Monday night, city manager David Vehaun made the case to York County Council to allow more public funding for the downtown and textile corridors where more than half a billion dollars of redevelopment activity is ongoing or planned.

At issue are Tax Increment Finance districts, which subsidize redevelopment in an area by diverting future tax revenue toward public improvements. A city can invest through bonds, repaid through money from increased tax revenue as property values increase.

A downtown TIF district in Rock Hill, for example, dates back to 1988, and a textile corridor one to 2004.

The city wants the county to eliminate debt caps on those two districts and combine them, allowing shared funds for areas that already share parking and other infrastructure.

“Our existing intergovernmental agreements created caps of $40 million in textile and $20 million in downtown,” Vehaun said. “These were put in place many years ago without having a real sense of exactly how much investment would be coming, what that investment would look like and the kind of public support that would be needed.”

Opportunity Zones

Most of Rock Hill’s development — other than the Carolina Panthers headquarters plan outside city limits on land off I-77 — is in the Knowledge Park area and along Saluda Street.

“The thing that’s driving most of the development that we have in Rock Hill is the opportunity zones,” Vehaun said.

Opportunity zones were created when President Donald Trump introduced the Tax Cuts and Jobs Act of 2017. States could nominate economically-distressed areas to receive tax incentives for redevelopment. The Rock Hill tracts cover much of downtown.

Opportunity zone projects have to be funded by the end of the year and underway within by June 2020, or they lose 5% of an incentive in year seven of the redevelopment, per federal tax law.

“Folks are moving very quickly trying to move several development projects along,” Vehaun said.

Textile Corridor

The $40 million in TIF funding for Rock Hill’s textile corridor in University City area of Knowledge Park led to $142 million of private investment and 1,000 jobs, plus 157 residences, Vehaun said. That area is roughly from Winthrop University to downtown, where former mill and industrial space has been converted to business, restaurants and sports uses. The TIF funding paid for roads, parking, sidewalks and streetscapes.

“What’s exciting about this is the development that’s still left to come,” Vehaun said.

Another $279 million in remaining textile corridor investment is coming from a variety of developers with nearly 2,500 jobs and 950 residences.

“The issue we face is we’ve got about $43 million in public improvements that are needed in order to support the work that’s going on,” Vehaun said.

That money would go toward parking, pedestrian and roadway improvements.

When complete, the textile corridor will bring a total of $421 in investment, 607 residences, 500 student housing units and almost 3,500 jobs, Vehaun said.

Included are The Exchange at the former Good Motor Co. site owned by the county, and The Thread on White Street converting a former printing and finishing company to offices. Thee Thread is a 400,000-square-foot building.

“It’s the largest empty building in the state of South Carolina,” Vehaun said.

Downtown Corridor

About $13 million of the allowable $20 million in downtown corridor TIF money is spent. The money paid for Freedom Walkway, roads, parking, sidewalks and a park. There has been more than $24 million of private investment in the area with 377 jobs and 126 residences.

“As good as that is, there’s some really exciting, new opportunities downtown,” Vehaun said.

Planned investment of $133 million will bring 140 jobs and 672 residences. It includes the former Herald property on Main Street and Dave Lyle Boulevard, The Link and Comporium offices to include a new hotel.

The area in total will have $157 million in private investment, 558 residences, 240 senior housing units and 517 jobs.

“Most of what we have spent (in TIF money) has set us up for stuff that’s yet to come,” Vehaun said.

More money needed

The two TIF districts combined need $85 million in public money. Take out TIF debt limits and $72.3 million is needed. Included are five parking decks costing more than $60 million, a $6 million downtown pedestrian bridge, and Fountain Park pedestrian and parking improvements at $2 million.

Rock Hill leaders say the public money is an investment toward the total $578 million in private redevelopment money coming into the textile and downtown corridors, with almost 4,000 jobs and more than 1,900 residences.

Existing TIF agreements run through 2039.

Vehaun said his city isn’t asking for an extension, or for the county to assume risk by eliminating the borrowing caps. He would like the county to combine the districts, and allow borrowing with current needs that leaders didn’t envision when debt limits were set in 2004.

“The good news is these things are going to have to happen quickly,” he said, thanks to opportunity zone incentives.

Planned projects take up all the room in the TIF districts, he said.

“There’s just not room for additional projects to go,” Vehaun said.

Debt limit decision

County leaders want to see the economic investment slated for Rock Hill.

“I’m excited about this plan for Rock Hill,” said Councilman William “Bump” Roddey. “I’ve seen it a couple of times. It blew me away.”

Chairman Michael Johnson wants county finance officials to review the debt service payback plan for the city, something the county may not get to until January with annual auditing just beginning.

“From a county perspective we’d like the largest municipality in the county not to be in a financial crunch in 19 years,” Johnson said.

Councilman Robert Winkler, a financial advisor, said recessions have to be planned for.

“We all know, probably within the next three to four years — and that’s very optimistic — there’s going to be another recession,” Winkler said.

Vehaun said development agreements can protect the city. He points to Riverwalk, where the city put $10 million of bond money in with an agreement that if a developer didn’t pay back funds, the city could take ownership of the $40 million of land.

“There were a lot of companies that had agreements before 2008 to pay shortfalls that weren’t around in 2009 to pay them,” Winkler said. “I want to make sure we’re making good financial decisions for our citizens and we’re not putting the rest of the county on the hook for something we’re not planning for or not seeing in the future.”