City leaders celebrate the opening of first business in Lowenstein Building
Tega Cay may invest in infrastructure for Game On, a mixed-use development that will include residential housing, shops, a multiplex theater, restaurants, a hotel and a multi-sport complex.
Local governments can use tax increment financing as a tool to finance public improvements. Once a municipality defines a TIF district, it issues a bond to invest in infrastructure such as water and sewage lines and then recoups the cost through future tax revenue in the TIF district.
Tega Cay City Manager Charlie Funderburk said a TIF, if put into place, would allow the city to reinvest dollars coming from that development into capital items the city will own, operate or maintain.
“It allows the developer to focus their investment dollars into the privately-owned parts of the development which generally allows for a development to reach its buildout sooner rather than later,” he said. “The sooner the development is completed, the sooner the taxing entities begin realizing the full revenues from that development. A TIF really makes a development a public-private partnership.”
This public financing method is paid off through tax revenue generated from the new development. The Game On development projects completion by 2025. Funderburk said a TIF could affect the existing tax base, but if it’s executed correctly, there would be little to no risk.
Rock Hill has issued bonds in TIF districts all over the city and is now putting together the final pieces for initial public improvements in Knowledge Park, a mixed-use business park designed for the so-called knowledge economy, which emphasizes technology and data.
Rock Hill City Manager David Vehaun said the bonds have funded road improvements, some utilities and storm water management; The new tax base in Knowledge Park is paying the cost of paying off the bonds.
“We require that there be sufficient private investment to cover the TIF bonds. If this is not guaranteed – the city would probably not issue the bonds,” he said. “All agreements with the developer guarantee that these bonds will be paid at maturity – just to be sure the city is protected.”
Vehaun said the bonds Rock Hill has issued in its business have leveraged thousands of new jobs in the community.
Tega Cay City Council is not yet considering TIF as an option, however. Funderburk plans to have conversations with city leaders over the next four to six months. He mentioned the possibility of using a TIF during a recent Economic Development commission meeting as city advisors discussed how the city could potentially assist the Game On development.
Economic Development Commission chairperson Jim Stalford said it’s very unusual for a private facility as large as Game On to work on its own.
“Coming from the sports standpoint, usually there’s a city behind it, a municipality, a county, there’s something that’s pushing that big project,” Stalford said. “That’s not to say it doesn’t happen and can’t work, but we’ve got to find some avenue to help Game On with that.”
Funderburk said a TIF could benefit the city overall from a financial and quality of life standpoint, and it could generate funds for Catawba Park in addition to infrastructure within the Game On development that the city will own and operate anyway.