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Kannapolis will fund new Cabarrus Health Alliance building

By Emily Ford
eford@salisburypost.com
KANNAPOLIS ó Faced with stagnant development at the N.C. Research Campus, the Kannapolis City Council agreed Monday to find a new way to build a public health department.
City manager Mike Legg said there is a “tremendous amount of concern” about keeping infrastructure development moving at the Research Campus, a $1.5 billion public-private science complex in downtown Kannapolis.
The economy has slowed development at the 350-acre campus, where only one new building is under construction and a major tenant recently pulled out.
The council agreed to join the Cabarrus County Board of Commissioners in contributing this year’s revenues, about $2 million total, from a special tax district to finance a new building for the Cabarrus Health Alliance across from the Research Campus on Dale Earnhardt Boulevard.
“I am very pleased,” said Dr. William Pilkington, director of the health alliance. “Time is of the essence.”
Pilkington has a bid of $8 million for the building, but it expires Aug. 15. He said he might be able to extend the bid if construction would start within a few months.
Originally, the city and county planned to fund the health department and millions of dollars in other Research Campus projects with tax increment financing bonds. But the market for TIF bonds evaporated when the economy tanked, just before the city issued them.
Pilkington recently laid off 18 employees because he’s spent more than a half million dollars planning the new health department, money the TIF was supposed to reimburse.
A $200,000 budget cut from the county also contributed to the layoffs, he said, as well as preparations for impending state budget cuts.
“It’s not the city’s fault,” Pilkington said.
Councilman Richard Anderson said he was “shocked and dismayed that Dr. Pilkington would go out and spend $600,000 up front of his fund balance” before he had the money from the TIF bond.
Anderson voted against borrowing money to build the health department.
“This has one purpose and one purpose only, to try to move things along at the Research Campus,” he said.
The rest of the council voting to proceed.
Regardless of the type of loan, the city pledged the revenues from the TIF district to help pay for improvements, Councilman Roger Haas said.
“I think this campus is going to work,” Councilman Ken Geathers said. “These projects are important.”
As an alternative to the TIF bonds, which will remain stalled for at least another year, the city will pursue a more traditional way to borrow between $25 and $30 million, such as a bank loan or certificates of participation.
The money will pay for the new health building plus one or two additional projects, as well as $5 million in reimbursements to campus developer Castle & Cooke North Carolina and $1 million in reimbursements to the city.
Castle & Cooke has put up $20 million and the city $4 million for street and utility improvements at the campus, which the TIF was supposed to repay.
Because most traditional financing options require collateral, the city likely will own the new health alliance building.
Other projects that might receive funding include $650,000 for the Village Park pedestrian tunnel and stormwater line, which would receive an additional $1.2 million from the N.C. Department of Transportation in federal stimulus money.
Legg also recommended putting $2.5 million toward the Cannon Village waterline. Federal earmarks would contribute an additional $700,000, he said.
Cabarrus County manager John Day suggested last week the Health Alliance could remain in the old Kmart in Kannapolis. “I don’t know that there’s any compelling reason for them to leave, not from the county’s position anyway,” Day said.
Answering similar questions Monday night, Pilkington said it’s crucial for the Health Alliance to relocate near the Research Campus.
Duke University, N.C. State and the University of North Carolina at Chapel Hill, three of the eight universities on the campus, all are designing research projects that incorporate the health alliance, Pilkington said.
“We have a lot of patients with a lot of health-care problems,” he said. “There are a lot of projects that we’re going to feed.”
Proximity to the campus is important for his clients, who have limited mobility and transportation, he said.
The health alliance will be a model for public health departments across the country, Pilkington said. Collaborating with the Research Campus will help break the cycle of chronic health conditions that plague generation after generation, he said.

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