By Jessie Burchette
Salisbury Post
Talk of tax increment financing for private development prompted outgoing County Manager Bill Cowan to issue a warning that the county will be responsible if the project fails.
Two developers or their representatives recently contacted county officials inquiring about such bonds, the funding procedure used by Kannapolis and Cabarrus County for David Murdock’s N.C. Research Campus.
Both projects involve hundreds of acres of multi-use development and are a potential result of the Research Campus project.
One involves nearly 400 acres along Interstate 85 between Peeler and Webb roads. The second involves hundreds of acres surrounding a proposed Beatty Ford Road interchange with I-85.
In the case of the Peeler-Webb roads project, Cowan said he was contacted by a Charlotte attorney representing a Florida developer.
“He specifically called about TIF bonds to put the water, sewer and roads in,” said Cowan. “He wanted an answer by January.”
Cowan said he told the attorney that getting an answer by that time wasn’t possible.
Cowan and other officials also met with representatives of Joe Knox Properties, the company looking at the Beatty Ford interchange.
Gary Knox of Joe Knox Properties, which is based in Mooresville, urged county officials to push for the interchange in an upcoming N.C. Department of Transportation meeting.
Cowan said they mentioned TIF bonds, saying state highway officials are pushing TIF bonds statewide as a way to get counties and cities to pay for roads.
North Carolina voters approved TIF bonds in 2004. By using TIF bonds, cities and counties can borrow money ó without the approval of voters ó for public projects such as health-care centers, streets, civic and entertainment centers, and storm-water systems. The increase in property value from the development district would go to paying off the bonds.
Cowan noted TIF bonds are a relatively new concept for this state. Some have gone well, but at least one has gone “extremely bad.”
He referred to the theater in Roanoke Rapids funded by $21 million in TIF bonds. The project hasn’t produced the economic bonanza the former textile town had hoped for.
“Ultimately if it fails, the county will be responsible for the bonds,” said Cowan.
He went on to cite a fundamental concern with the state and how it’s failing to live up the deal made with counties in the 1930s.
In that deal, the state agreed to take up building and upkeep of roads from the counties. In turn, the counties agreed to build and maintain school buildings, while the state would pay for school operations.
“Now the county is spending 30 percent (of its budget) on instruction. … The county is building the buildings.
“Now the push is on to get counties involved in road building,” said Cowan, predicting that the next step would be to get the counties into road maintenance.
“Counties need to be extremely careful. Property taxes is the county’s source of revenue,” said Cowan. “The tax rate could get really high if counties start building and maintaining roads.”
And Cowan offered another concern about TIF bonds and developers.
“Unless you’ve got an investor like Murdock, who has a financial bin to make the investment and somewhat guarantee, it could purely be speculation.”
Contact Jessie Burchette at 704-797-4254 or jburchette@salisburypost.com.