Project Jackson financing option
Project Jackson covers 25 acres in North Augusta
• $100.9M private investment – hotel, townhomes, retail, apartments, offices, YMCA
• $47.7M Public investment – stadium, conference center, parking garage
• $43.95M of Public investment to be paid through TIF and other revenues
The current North Augusta Tax Increment Financing District covers 460 acres and is scheduled to end in 2017. It reflects 1996 property values.
Current TIF Revenue to support Project Jackson
• City of North Augusta: $19.7M
•Aiken County: $19.4M
**Note – (subtract $10.5M payment back to the County to reflect 2012 land values)
• Aiken County Public School District: $0
Total: $28.6M total TIF revenues based on existing TIF without Project Jackson
The proposed TIF revenue plan to support Project Jackson would be an extension of the current TIF to 2043, excluding the School District.
Proposed TIF revenue plan to support Project Jackson
• City of North Augusta: $16.8M (66.4 mills)
• Aiken County: $16.5M (65.3 mills)
• Aiken County Public School District: $14M (135.8 mills) *only 15 years
Total: $47.2M total TIF revenues based on Project Jackson
Cost of Public Improvements: $47.7M
Par amount of City of North Augusta Bonding: $43.95M
Total: $112.2M revenue to pay debt service 2013-2043 (principal + interest)
Projected source of debt service revenues to pay bond:
• $28.6M TIF revenues based on existing TIF without Project Jackson
• $47.2M TIF revenues based on extended TIF on Project Jackson
• $4.5M North Augusta accommodation tax revenue
• $15.1M North Augusta hospitality tax revenue
• $7.2M net hotel and stadium parking revenues
• $9.6M net stadium revenues
Project Jackson has been widely debated by both residents and government officials over the past few months.
A lot of information has been thrown around, talks of Tax Incremental Financing, often referred to as TIF, have dominated the discussions, and lots of questions are popping up about the project itself.
So really, what is Project Jackson, and what's a TIF?
The Aiken Standard breaks it down.
What is Project Jackson?
Project Jackson has been described as a large-scale economic development plan for North Augusta's riverfront.
The City of North Augusta has projected that approximately $43 million in public investment will go toward a multiuse sports and entertainment venue, conference center and parking structures.
The private investment needed for the financial model is $101 million for a four-star hotel, restaurants and retail spaces, state-of-the-art office buildings, luxury apartments and a Family Y.
According to North Augusta City Administrator Todd Glover, there has been a misconception that the City is financing the private investment for these developers. Glover said that is simply not true.
The stadium is projected to seat up to 6,500 attendees for ball games and 9,000 for concerts. It will also include a 900-person grand ballroom with multiple breakout rooms.
Much of the predicted success of Project Jackson has been based off Fluor Field, which is a similar stadium that was constructed in Greenville. Apparently, it has drawn 110 new businesses, and 242 building permits were obtained within a half mile of the ballpark since it opened.
The Augusta GreenJackets would use the North Augusta stadium, and Glover said that team is going to pay $350,000 a year to rent that stadium.
“We have a 20-year guarantee that's backed by Minor League Baseball that we will have a team in that stadium,” Glover said, adding that there are two five-year renewals as well.
What is a TIF?
According to the Municipal Association of South Carolina, future gains in tax revenues that are generated by growth of a tax base in a designated area are used to cover the costs of a municipality's redevelopment project under a TIF.
In this instance, the City of North Augusta would capture the incremental tax growth of property located in the designated TIF district from the school district and Aiken County.
“A TIF basically utilizes growth in the value of property to pay for the investments that cause the growth,” Glover said.
Glover said that, with the TIF, taxes are not increased to pay for this project.
The TIF in question is already established; it was approved in 1996 to develop 460 acres along the Savannah River front area. The extension of the TIF will help in the funding of Project Jackson.
State law reads that, for a TIF to be passed, “Incentives must be provided for redevelopment in areas which are, or threaten to become, predominantly slum or blighted.”
There have been arguments made that the land in this particular TIF district is no longer blighted and does not qualify for this incentive. Many residents living in the vicinity of the land designated for Project Jackson have described it as beautiful and have said something less imposing belongs on that property.
Glover states that the land does qualify under the TIF law because there are foundations of several industrial buildings left over from the 1930s and 1940s.
What's being asked of County Council?
The Aiken County School Board has already agreed to participate in the North Augusta TIF, but only for 25 acres of a much larger parcel that makes up the TIF district. It will participate for only 15 years.
Aiken County, on the other hand, would participate in the extended TIF for 30 years and for the entire 460-acre TIF district. Some on Council have expressed concern about deferring tax revenue for the entire district and not just a small portion.
In March, the Project Jackson TIF proposal was pitched to the County, but it was struck down by Council. Council members were not thrilled with the idea that the TIF would reflect frozen land values from 1996.
Glover has had the agreement amended to represent 2012 land values and the County will be “rebated” $350,000 a year during its 30-year participation in the TIF to reflect that change. That amounts to $10.5 million back into the County's general fund from the original 1996 TIF.
So in the existing 1996 TIF, the County defers approximately $8 million in property taxes of that 460-acre district. If it continues to participate in the TIF for another 30 years, the County will defer another $16.5 million.
County Councilman Scott Singer, who voted against the initial proposal in March, held a meeting on Thursday to hear concerns from residents. He said Council's job is to determine if this is positive or negative to Aiken County taxpayers as a whole.
He feels that the City of North Augusta is assuming most of the risks in this situation since it will be repaying the bond and will have to handle the increase in services that result from the new development.
“I don't know how I would vote for this if I was a North Augusta Council member,” Singer said.
Though some County Council members have expressed exactly how they feel about the matter, Singer hasn't really said how he plans to vote and has stated that he still has questions that need to be addressed.
What are public, private sector contributions?
The private sector is putting in $101 million into this project, Glover said. That includes hotels, restaurants and retail businesses.
The public funds are approximately 29 percent of the total cost of the project, Glover said.
The City is also projecting $19.6 million combined in accommodation and hospitality tax revenues from the new development. They also are assuming $7.2 million from hotel and stadium parking revenues and an additional $9.6 million in stadium revenues.
How would this benefit Aiken County if passed?
Those who are against the TIF extension have said that the millions of tax dollars that will be collected over the 30-year period for the project are desperately needed to cover other expenses within the County. Rather than the money go toward a baseball stadium, those funds should be used for County employee salary raises, critics have pointed out.
North Augusta officials have said that if Project Jackson is successful, the County's tax base will grow and more money will be generated for the Capital Project Sales Tax. With the Capital Project Sales Tax, 1 percent of all sales tax covers infrastructure projects in the county, North Augusta, Aiken and in the other smaller towns. North Augusta believes the revenue impact of the project will generate $300,000 to $500,000 in sales taxes annually.
Some proponents of the project said it will bring people from across the Savannah River into Aiken County, who will spend money here and not just Augusta. The City of North Augusta has also touted the job creation it could bring as a plus.
Amy Banton is the County reporter of the Aiken Standard and has been with the publication since May 2010.
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