City spending more than $1.5 million to redevelop 300 block of South Main Street
SALISBURY — The city of Salisbury will spend more than $1.5 million redeveloping the 300 block of South Main Street, including buying property during the past decade, cleaning up contamination, building new parking lots and more.
For the first time in the city’s history, an entire block of downtown is under redevelopment. Integro Technologies is building a $3.2 million headquarters at South Main and East Bank. At the other end of the block, the city plans to construct an $8.37 million school central office at South Main and East Horah.
City Council will hold a public hearing at 4 p.m. Tuesday in City Hall, 217 S. Main St., about the controversial central office project, which Rowan County commissioners declined to fund. Instead of the county, the city would borrow the money for construction on behalf of the school system, which can’t take on debt.
The state’s Local Government Commission has to approve the financing. A county official said last week it appeared the LGC would require Rowan County commissioners to approve a lease between the city and Rowan-Salisbury Schools.
If so, that could be the death knell for the downtown location.
But city and school officials disputed the claim and said their lease-purchase agreement does not need the county’s blessing.
If the central office project moves forward, the school system would make the city’s loan payments. But Salisbury has many other costs associated with the redevelopment project that started 10 years ago.
So far, costs include:
• $1 million to buy the Rowan Health and Fitness property (former GX Fitness) on the north end of the block, purchased in 2003
• $209,500 to buy the service station property on the south end of the block, purchased in 2007
• $55,871 for cleaning up environmental contamination at the service station, completed last month
• Six percent of parking construction cost with a base fee of $56,745 to Stout Studio Architecture for the design and construction of about 210 parking spaces
Price of parking spaces
Other costs of the redevelopment project are harder to pin down at this point. They include:
• The city has agreed to build 52 new parking spaces for Integro and provide 160 parking spaces for central office employees.
The city, which also will dedicate 24 existing parking spaces behind City Hall to Integro during the day, could use a handful of other existing spaces to help meet the quota for the central office.
So, the number of spaces and the cost involved with new parking construction is not clear. But Mayor Paul Woodson put the ballpark figure of parking lot construction at $1,000 per space.
City Manager Doug Paris said parking design options and costs will come to the city at a later date. One option is expected to be a parking deck.
• The city wants to buy a small piece of land behind a private home on East Horah Street, which backs up to future parking for Integro and the central office. The city needs the parcel to move a water and sewer easement, and the deal is under negotiation.
• The city now owns 322 S. Lee St., also obtained for water-sewer easement relocation. This small parcel also backs up to the future parking area and includes a vacant two-story home the city plans to demolish.
The deed for the parcel, as well as 230 S. Lee St., was transferred from the Salisbury Community Development Corp. to the city in on April 4, but the price was not clear.
City officials said they don’t know the purchase price and referred the Post to the CDC, which did not return phone calls. Documents filed with Rowan County show no excise tax was paid, so the purchase price could not be determined based on public records.
Assistant City Manager John Sofley said the city has purchased no property in that block this year.
• The city is still in the design phase for extending utilities to Integro and the proposed central office. Cost estimates are not available, Paris said, and will come to the city at a later date, along with the cost of any easement relocation.
The city’s cost to redevelop the 300 block of South Main is an investment in economic development, Woodson said.
“I think it’s a $12 million project, that’s the way I look at it,” he said. “It will bring 190 people downtown to work.”
A new central school office and Integro Technologies, which will be housed in the future Salisbury Business Center, have the potential to add $1.25 million in local retail sales as employees and visitors shop downtown. The central office and Integro are expected to increase the city and county tax base by about $4 million, according to an economic impact analysis by the Rowan County Economic Development Commission.
“Sometimes you just have to do things to make things better for the city and the county,” Woodson said. “I can’t tell you how many people have said it’s a good idea.”
Starting in 2003
Salisbury’s interest in the 300 block of South Main began in 2003, when the city bought more than half the block for $1 million from Rowan Health and Fitness.
The city originally purchased the property for a downtown convention center but then determined Salisbury was too small for such a facility to be profitable, Paris said.
Last month, the city sold about one-third of the former GX Fitness property — about .9 acre — to Integro for $250,000.
“Landing the headquarters of a growing high-tech firm on the corner of Bank and Main street is an outstanding outcome for our city, much better than this corner remaining vacant for the second decade in a row,” Paris, who declined to be interviewed about redevelopment costs, said in a statement. “This is especially true given that they were looking at location options outside the county after not being able to reach an agreement on a parcel in Summit Corporate Park.”
Integro pays an average wage that exceeds $70,000 a year, double the median household income for Salisbury. Local contractor KMD Construction is building the Integro headquarters and Salisbury Business Center, which means local jobs, Paris said.
Integro, which designs quality-control systems for production lines, brings Fortune 500 companies to Salisbury and is putting the city “on the map within the automation and technology industries,” Paris said.
City Council in March approved a seven-year tax break for Integro. Over that time, according to projections, Salisbury would collect $191,858 in tax revenue from Integro’s new location but give back $163,079 through incentive grants.
Owners of Integro Technologies Corp., which is based in Salisbury with offices in Pennsylvania, Ohio, South Carolina, Tennessee and Ohio, created ITC Land LLC, which owns the property on South Main Street.
Integro will be the primary tenant in the 41,800-square-foot Salisbury Business Center, occupying about 63 percent of the leasable space with options to occupy more as needed, Vice President Shawn Campion said.
The Salisbury Business Center will name more tenants as the project progresses and leases are finalized, Campion said.
With sufficient interest, the business center also could house an incubator to help launch start-up companies, according to the company’s website.
Paris told the Economic Development Commission the city is lucky to have a private company building a high-tech incubator.
“This is very unique,” he said. “Normally, the government builds an incubator with government money.”
If the start-up companies take off, Paris said he would expect many of them to locate in Salisbury.
The city has taken some heat for agreeing to build parking for a private firm.
Woodson said the new parking lot will be open to public use after 6 p.m. for people headed to downtown restaurants or theaters. The promise of parking helped the city land both the Integro building and the school central office, he said.
“Sometimes you just have to do it, step forward,” Woodson said. “We really want to do things to make things better.”
The rest of the investment
The remainder of the city’s million-dollar GX Fitness purchase — about 1.7 acres — is planned for parking areas and a driveway from South Main Street to access the main parking lot behind Integro, as well as a small portion of the central office building.
Most of the land the city donated to the school system for the 62,000-square-foot central office was the former service station property the city bought in 2007.
Clean up of massive contamination at the site earlier this year cost Salisbury nearly three times more than expected.
Although the state was expected to reimburse the city for all but $20,000 of the clean-up cost, taxpayers ended up paying $55,871 for the abatement. The additional expenses submitted to the state’s cleanup fund either did not qualify, were not pre-approved as required or were duplication of other costs.
The state did reimburse the city $430,060 for the cleanup.
Paris pointed to the EDC’s economic impact analysis to summarize the benefits of redeveloping the 300 block of South Main Street.
“These projects appear to have a lengthy list of positive attributes and few apparent liabilities,” the report said.
According to the EDC and including both Integro and the proposed school central office, the redevelopment project would:
• Create about 123 temporary jobs during construction
• Support an estimated 260 jobs in the local economy
• Potentially add about $1.25 million in local retail, service and entertainment sales and could reduce retail leakage to other counties
• Increase the city and county tax base by more than $4 million
• Provide increased sales and property tax revenue in excess of $60,000 per year
• Create new opportunities for entrepreneurial development and collaborative public-private educational partnerships
• Positively showcase the county seat as a vibrant, progressive community.