Rock Hill supports York County’s plan to save Panthers project. How the deal evolved
Rock Hill City Council voted Monday night to approve a resolution in support of York County’s alternative financial package that would resume construction on the paused Panthers project.
The city council unanimously voted to pass the resolution, which was not on the agenda, after it returned from executive session at the end of the meeting. Mayor John Gettys was not present.
Last week, York County Council voted 4-3 to pass a resolution that would commit the county to step in and take “any actions necessary to execute and deliver” a fee agreement with the Panthers, according to the resolution.
Under the county’s resolution, the Panthers will receive incentives for four decades in exchange for completing $225 million of public infrastructure at the site off I-77. The $225 million in bonds had been part of an agreement with Rock Hill.
The city, county and Panthers would need to release one another from the existing incentive deal to move forward with a new one.
The city’s resolution passed Monday gave the county and GT Real Estate Holdings, which represents the Panthers, the green light for all three entities “to enter into agreements, mutual releases and future approvals as contemplated by the county resolution.” A new plan would be “subject to final approval of city council,” according to the resolution provided to The Herald.
“The city remains supportive of the project and especially recognizes that restarting construction and development of the project will benefit residents of the city, county and the entire state of South Carolina,” the resolution said.
The county’s resolution was introduced after Tepper Sports & Entertainment, representing the Charlotte-based NFL team, announced earlier this month that it would halt the headquarters site project in Rock Hill due to missed payment deadlines.
“The on-going work will continue with our partners to find an economically acceptable solution for all parties to continue this project in Rock Hill,” Tepper Sports said in a statement in early March.
The city, however, has maintained that Rock Hill has met all financial obligations required by the agreement. The project’s first phase construction was set to be complete next year.
At a March 14 council meeting, Gettys pushed back on accusations that the city missed payments and gave assurances that Rock Hill has put forth its best effort “to bring the bonds to market short of risking the credit to the city.”
“Any implication by the Panthers that the city did not do its absolute and professional best is simply not true,” he said.
The county, in a statement Tuesday, said it was appreciative of Rock Hill’s support and will continue to work with the city and the Panthers to ensure the development is a success.
“York County is eager to see this landmark project move forward, and construction to begin again at the site,” the statement said.
Panthers delay bond issue
At the same March 14 meeting, Gettys and city manager David Vehaun attempted to clarify the dispute related to the $225 million in bonds.
Gettys said the Panthers approached the city in 2019 about the project and over the next two years, the city has worked to negotiate various agreements with the Panthers.
As part of the original incentive deal, Rock Hill pledged 100% of its tax revenues from the site and, in exchange, the city specifically insisted that it would not “backstop” — or guarantee the debt, Vehaun said.
“They were talking about a lot of money here,” Vehaun said. “We didn’t want to do anything that would damage the city’s credit, so we were very upfront with them from the beginning that there was no way that the city could or would or should try to backstop a bond issue of that size.”
Before the city could issue the bonds, it needed specific details from the Panthers, such as developer plans, to provide potential investors, Vehaun said. And ultimately, the Panthers delayed the city’s ability to issue the bonds, he said.
“While these market studies were underway, it became apparent that the Panthers were not submitting enough details in the way of development plans and other checklist items that … were going to be necessary to issue the bonds,” Vehaun said.
While the city was waiting for needed plans, the Panthers continued to look at other options to deal with the debt, including reaching out to York County for financial support, Vehaun said.
In May 2021, Panthers Chief Operating Officer Mark Hart wrote a letter to York County Manager David Hudspeth asking for help. He wrote that the Panthers were concerned that without the county’s assistance, the city would not secure the necessary $225 million in bonds for the project.
“The unfortunate thing for us is as they did that, and as the terms of that changed, that required our attorneys to constantly, in many cases, redraft and amend these various agreements that had already been entered into,” Vehaun said.
However, by the end of 2021, Vehaun said the city believed it had reached a point that would allow the city to “actually go forward with doing the bond issue.” And about two weeks before the city was planning to issue the bonds, Vehaun said the Panthers asked the city to stop.
“As far as the city’s perspective, we had everyone lined up,” Vehaun said. “We had preliminary offering documents that were all but ready to go to the investment community.”
Gettys said since the city first began its negotiations with the team, economic circumstances have changed, and as a result, a new agreement should be reached.
“We’ve seen interest rates start to rise,” he said. “Inflation is higher than it’s been in 40 years. We’ve seen a war. We’ve seen the results of a pandemic. We’ve seen a lot of changes. Speaking for myself only, I think that does necessitate us going back to the table and working on an agreement because times have changed.”
This story was originally published March 29, 2022 at 9:04 AM.
