Posted: Tuesday, November 5, 2013 10:50 am
FLORENCE, S.C. — The Florence City Council voted to approve millions of dollars in incentives for two development groups that will redevelop several of the largest buildings downtown at a special called meeting Tuesday morning.
One development project incorporates the Kress, Woolworth and Kuker buildings on the 100 block of West Evans Street and the Guaranty Bank building on North Dargan Street, roughly 60,000 square feet of space that will be transformed into a live, work and play, public and private mixed-use project.
The development group, New Florence LLC, which includes former Lt. Gov. Ken Ard, restaurateur Dale Barth, attorney Kevin Barth, real estate agent Ken Jackson, businessman Jim Brown and businessman Frank Chisholm, has plans to invest $10 million in the space, creating a 200-seat restaurant, a sauce bottling facility, a micro-distillery, 15 to 18 loft apartments, office space and a public atrium and rooftop terrace, according to Mayor Stephen J. Wukela.
The Kress building was originally put into a 60-day status-quo period this summer by council to allow interested parties to submit their development plans, for the massive, 15,400-square-foot building. The city put a formal public request for proposals out on Aug. 2 and received one application by the deadline of Sept. 5 that also incorporated the surrounding buildings.
Wukela said the project will create some 150 to 200 jobs and keep private investment momentum moving forward.
“These two investment groups are very well known, very respected businessmen in the community they are all, frankly putting their money where their mouth is and making this substantial investment in spite of the risks that exists,” Wukela said. “And I think it demonstrates to other developers out there considering this prospect that this is a reasonable undertaking, it’s a viable undertaking and it’s a worthwhile undertaking.”
The $1.98 million incentive package represents a similar percentage and package given to the Hotel Florence group. New Florence will receive a $200,000 conditional grant for the group’s purchase of the Kuker building, $850,000 in property tax rebates (financed through Tax Increment Financing district dollars) and $930,000 relative to the city’s construction of a public rooftop terrace and atrium. The city is conveying the city-owned Kress (which it received as a gift from the Drs. Bruce and Lee Foundation) and Woolworth buildings and the Florence Downtown Development Corp.-owned Guaranty Bank building.
The Kuker building was sold to the development group by Bo Osborne.
Property tax revenue per year from the properties before they were publicly owned was about $1,000 annually. Wukela said once developed, it will generate $139,000 in property taxes, however the group will receive 85 percent in property tax rebates for seven years, netting the city some $20,000 annually. Water and sewer revenue is expected to be $1 million over 25 years. Estimates did not include hospitality tax revenue generation.
The group issued a statement to the Morning News after the decision that reads in part: “We are unwavering in our commitment to going above and beyond in respecting the great history of this prominent location and creating something that will be a catalyst in moving all of us to a better Florence and Pee Dee region.”
Royal Knight
Council approved $280,000 in incentives to the Hotel Florence group, Downtown Hospitality LLC, to develop the 8,300-square-foot Royal Knight building located across the street from the Kuker building. The project is estimated to cost $2.5 million and will create extended stay rooms for Hotel Florence on the second floor with retail space, a restaurant and a public restroom on the first floor.
This measure also was approved by council 6-1, with Councilman Ed Robinson voting against it.
The incentives include $180,000 for the city to stabilize the building and bring it into compliance with downtown maintenance and appearance standards as well as $100,000 toward the construction of a public restroom on the first floor, something Wukela estimated would have cost double if done separately. The city also performed bat abatement on the building this summer.
The FDDC, which bought the building two years ago for $385,000, will now convey the building to the group, according to City Manager Drew Griffin, who said such investments will come back to the community in several ways.
“Through job creation and economic investment,” Griffin said. “We estimate that the hotel project created new wealth in Florence of $29 million. That is no different than the state giving incentives to manufacturing; they do it because of the spin off dollars created. And tourism and hospitality are considered very similarly to manufacturing … you bring wealth into your community through the production of goods and services, well a restaurant or hospitality tourism does the same thing.”
A presentation was also made to council showing the city would be able to obtain a $20 million bond based on TIF district revenues.
The TIF was created in the event that property tax rates in the TIF district, basically the historic district, would increase over a 2006 baseline; once the TIF is enacted the city will capture those revenues, school district and county revenues for a period of up to 13 years. The city is in the position to determine what those revenues will be to enact the TIF and prepare to do a bond issuance based on those revenues to fund development incentives and other projects like two parking garages, a basketball complex and other projects totaling $16.1 million.
Council will vote on the ordinance in January.