GREENVILLE — During a special work session Tuesday, Greenville City Council heard a proposal from a consulting group to establish Downtown Redevelopment Districts (DRD) in the city.
Nate Green, director of economic development with the Montrose Group of Columbus, described to council his company and what it offers the City of Greenville.
“We’re going to create a DRD, and use it as an economic development incentive to get building owners or developers to make investments in their buildings, spur new businesses, and get new activity in the downtown area,” he said.
The idea behind a DRD is to capture property tax gains in 10-acre continuous districts to certified historic structures preparing for redevelopment. The funding gained can be used for historic structures, historic preservation, public infrastructure and tech corridors. The property tax comes back to the city as a TIF (Tax Increment Financing).
Under the Montrose plan, the consultant group would set up as many redevelopment districts as the city wishes for a flat fee of $20,000, and for a period of time lasting approximately four or five months. After that, if needed, the city could contract Montrose services for an hourly fee.
“Let’s say that a building owner makes an investment of a million dollars,” he explained. “That’s going to generate $50,000 a year in new property tax. Seventy percent — $35,000 of that — is going to go into the DRD. The city can use it to rehabilitate historic buildings, and non-historic buildings. They can use it for infrastructure improvements — sewer, water, fiber — and they can also use it to fund non-profit entity like an economic improvement corporation or a mainstreet organization.”
The city has numerous historic structures in its downtown area, allowing the city to set up one or more DRD’s at its discretion. The city also has the option of offering grants or loans on its own terms to promote development.
The property tax profits gained under this plan, however, cannot be used to renovate privately owned buildings, but could be utilized for improvements to a building’s facade, walkway, or parking area of a privately owned property. Green told council 20 percent of the funding could also be used to fund the DRD itself, or other economic development ventures.
Greenville Safety/Service Director Curt Garrison, called it “another tool” in the city’s economic development “toolbox.”
“Once it’s established, it’s established,” he said. “It’s very similar to an enterprise zone, very similar to a [community reinvestment act] which council, five or six years ago, amended.”
Councilman Todd Oliver asked Green what downside the city faces if it agrees to the proposal.
“There’s a risk,” said Green. “If [the city] decides to make a loan to a property owner, and those developments fall apart, the city would have to back up those funds. That’s one of the downside risks.”
“We have a unique opportunity here we should look at,” said Councilman Tracy Tryon. “I think this is a viable tool that we could use in the future for development.”
When asked what Montrose offers that the city couldn’t accomplish itself, Green said, “We offer an outside expert opinion. We come from Columbus so we can see things differently. And because of that we can benchmark Greenville against other places we’ve been.”
“We do these every day,” he added. “The time and efficiency that I can give to it is greater than what the city can do. The other thing is, their job is not parcel analysis and strategic plans, their job is to run the city and do those things.”
No action was taken. Council will consider the issue again in July pending budget discussions for 2018. Its next regular meeting will be July 11.
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