The South Main TAD Advisory Committee recently approved its first recommendation for granting a private developer’s request for Tax Allocation District funding.
If City Council accepts the committee’s recommendation, the developers of the West District will receive $188,365 from the South Main TAD fund. This would include $88,806 for creation of a communal green space called The Yard, $63,512 for burial of power and telecommunications lines, which are currently overhead, and $28,047 for a dedicated pedestrian route across the property.
"All of the elements that you'll see, from the pedestrian thoroughfare to the green space ..., these are all things that benefit the community and really enhance the experience," Josh Whitfield told the committee.
The existing overhead utility lines on old wooden poles, he added, have been widely identified "as being a nuisance and not really aesthetically pleasing."
Whitfield, who owns Whitfield Sign Company, is one of the three major partners in development of the West District. The others are BAK Builders President Brian Kent and orthopedic surgeon Dr. Delan Gaines. Whitfield Signs became the first occupant of the site in 2018 after renovating the long-vacant West Building Supply warehouse as its headquarters, fabrication space and showroom.
The overall West District plan envisions shops, offices, restaurants and upstairs apartments in eight to nine proposed new buildings designed to look like picturesque early 20th-century downtown storefronts. One of these buildings, the new headquarters for Ranco Event Rentals, with a neighboring shopfront and the first upstairs apartments, is now reaching completion.
The developers plan to start construction of two more of the new buildings soon. They also own a second, neighboring warehouse, which they hope to renovate for other businesses.
Whitfield, Kent, and the developers' attorney, Chris Gohagan, presented the final version of the request to the South Main TAD Advisory Committee at its Jan. 30 meeting. According to their presentation, the $188,365 in Tax Allocation District funding would amount to about 5% of the developers' investment in the overall project.
By that investment, they hope to turn the site, previously valued at about $1.2 million, into business and residential properties worth at least $15 million.
The developers would not be expected to repay the $188,365 to the city. Instead, the TAD legislation sets aside any increase in city property tax revenue from growth in assessed values since Jan. 1, 2016, and more recently a share in Bulloch County commissioners' property tax growth in the district, to the fund for redevelopment projects.
"We believe the entire project offers co-beneficial opportunities for the city, because it takes a site that was vacant and in disrepair and turns it into a $15 million to $20 million site," Gohagan told the committee. "That benefits the city in a number of ways, through retail development and job creation, in addition to the tax digest."
He also described the communal green space, the pedestrian route through the property and the burial of utility lines as specific "co-beneficial opportunities."
The promised pedestrian route, private property but open to the public, would run along the segment of West Cherry Street that is within the West District property. The city government previously abandoned West Cherry between South College Street and Martin Luther King Jr. Drive to the West District developers at their request.
The Yard, a park-like space near the West District's decorative faux water tower, will also remain private property but would be open for community use under the proposal. It would neighbor a planned 7,000-square-foot event venue building, called The Bulloch.
Private investors, whom Whitfield said he is advising, will build the events building. It is one of the two buildings not already under construction that the West District developers plan to start this year.
Meetings of the Chamber of Commerce, the Service League and similar organizations, as well as weddings and other social events, could be held there, Whitfield said. He described the indoor event space, The Yard and the pedestrian route as part of a strategy to make the West District an extension of downtown.
"It's not just going to be to create that event space revenue, but it brings people downtown," Whitfield said. "It changes traffic patterns, it changes thought processes, coming downtown to these regular events."
Return of investment
The committee had an independent analysis of the potential return on the TAD fund investment done by Davenport & Company, the city's financial advisors.
Assistant City Manager Jason Boyles presented Davenport's findings as a range of scenarios.
At worst, the city would "break even" on a $185,000 grant in 20 years if the West District property grew in value just 2% year over year, adding $1.1 million in taxable value. But if the property grows quickly to the $15 million projected value, the city and county would recoup the $185,000 in only 2.29 years.
With Davenport projecting a $10 million eventual valuation of the property, but with the county only matching the city's portion of revenue growth and the Board of Education not contributing, the city would still recoup its investment in 3.6 years, Boyles reported.
Council has final say
Under an agreement between Statesboro City Council and the Bulloch County Board of Commissioners, a TAD Advisory Committee recommendation is required for approval of funding any project. The committee has members appointed by both elected boards.
However, only City Council can give final approval. The recommendation may be presented to the council Feb. 18, Boyles said.
As of Dec. 31, the TAD fund contained $428,164, City Finance Director Cindy West reported.
Chairman Doug Lambert said the committee, organized one year ago, had received requests for smaller projects but waited for a more significant one.
"There are probably a couple of reasons to use TAD money," Lambert said. "One is to bridge a gap when somebody doesn't have quite enough money to make a project go. ... Another is an incentive to go someplace that you want redeveloped, and this I think falls into that category. It's an incentive to investors to do something in a part of town that needs redevelopment, and that's certainly what's happened here, so we're excited.