Plan for Gaillard is unrealistic
Heed Preservation Society’s alternative
If simple repetition could substitute for truth, the April 15 commentary by Mayor Joe Riley — “Scrapping the Gaillard would be ‘fiscally irresponsible’ ” — might be persuasive. But no matter how many times the words “world-class” and “right” are repeated, the plain truth cannot be avoided:
Current Gaillard plans are neither world-class nor right.
The city and its residents would be best served by the integrated and elegant approach to development proposed by Preservation Society of Charleston executive director Evan Thompson, rather than by the city’s unsteady tack that dangerously elevates short-term goals above the fragile neighborhood fabric that has made Charleston the destination of choice for history and hospitality.
Thanks are meanwhile in order to Brian Hicks for injecting a bit of balance into his Sunday sidebar, “Ansonborough residents feel the squeeze.”
His column discloses some people’s profound lack of understanding about the motivations of residents who question the merits of current Gaillard plans and of the city’s broader development agenda.
Whatever its ill-founded source, the suggestion that with underground wiring, “the [Ansonborough] neighborhood is getting something out of the [Gaillard] deal” wrongly implies a crass tit-for-tat mentality among those who speak in favor of caution and sensitivity in the development of the Gaillard site.
When, how and indeed whether underground wiring may ever come to Ansonborough has no relation at all to valid concerns that an 80,000 square foot office building be grafted onto the facade of an antiquated auditorium, that a trade show/convention space be expanded so as to treble its operations, or that an outdoor arts precinct along Anson Street be established to host up to 1,500 patrons — to be serviced by Portolets — for open-air performances, all of which, of course, would abut a residential neighborhood.
As Brian Hicks rightly noted, these serious underlying concerns will linger until and unless they are addressed.
City’s plan the only realistic option
The Preservation Society of Charleston’s plan for Union Pier and the Gaillard sounds great.
Pity it is unrealistic.
The cost of acquiring the site at Union Pier, of building a performing arts center, and acquiring the Cigar Factory and renovating it, can only be guessed. If all the facilities at the Gaillard are replicated, my guess is well over $300 million, an amount beyond the city’s funding ability.
How does a city usually fund a large project? It turns firstly to General Obligation (GOB) or Revenue Bonds. It also may create a Tax Increment Finance (TIF) district and use the tax revenues derived from development?
It possibly could create an independent stand-alone entity. We don’t think any of the options would work.
State law does not allow municipalities to issue GOBs beyond an amount equal to 8 percent of the assessed value of properties in its jurisdiction. The city may have capacity to issue more GOBs but much is already earmarked for specific projects. It certainly does not have capacity to raise tens of millions of dollars.
The city could issue Revenue Bonds but would the stream of net revenue from the proposed center be sufficient to cover debt service? We don’t think so. The Gaillard presently is running at a deficit. The economics of the proposed facility maybe better, but not $10 or $20 million a year so.
What about a TIF district? The tax revenues derived from the development would be used to service the debt. This is unlikely to work for a similar reason that Revenue Bonds won’t. There will be insufficient revenue. The new center would be city owned and not liable for tax. Could further development on the Union Pier site be sufficient to finance the project? We doubt it, as the scope for further development is limited.
Could the city fold the development into a non-profit entity? This would take the development off the city’s books and perhaps create a more favorable fund-raising opportunity. We presume donations would be tax deductible. But would funding be any easier? We doubt it.
There is no evidence that Charleston’s pool of potential donors would pony up hundreds of millions of dollars.
Yes, there are other sources to which the city could turn to finance the grand plan but not much should be expected. The county is very close to its GOB borrowing limit.
The state and the federal governments are also obvious sources but each is experiencing tough times. Neither is likely to be willing donors.
As a last resort, what about a sales tax?
It would require a referendum.
But do you really think citizens would give the nod to a one cent or even half-cent tax?
Certainly not if the present Gaillard can be renovated to do the job.
The renovated Gaillard may not have the sheen that the Preservation Society would like.
But it is still a shining project. It will fulfill its purpose, and its cost will be affordable.