My Turn: Finances favor downtown site for school office
By Pam Hylton Coffield
I am perplexed by the idea that the County Commission is considering more expensive options with our tax money than the downtown option for the Rowan-Salisbury School System central office. RSSS currently occupies 52,000 square feet in five locations. Anyone who has been in one of those locations knows that filing cabinets are jammed everywhere. Assuming that 62,000 square feet is the amount of space needed, let’s look at the alternatives.
The DSS building has 27,000 square feet. Why take the time to move? This is not one step closer to a central office. The Cornerstone Church campus has two buildings that will require renovation and the addition of another 20,000 square feet to make it equal in square footage; one architect says that adds up to well over $9 million (not counting financing costs).
There are two sites that deserve a closer look: Isenberg and downtown. Let’s examine the costs of these two proposals.
The Isenberg site has 20 acres. Provided everyone agrees that it is a wise move to remove the ability to expand the existing school or build another at that site (land that would cost $250,000+ to replace), a new 62,000 square foot building on that site at $129 per square foot will cost roughly $8 million. Architects tell me that a comparable one-story building is not any less expensive. When you consider having one third less roof, etc. that makes sense. Add $320,000 for parking (160 spaces at $2,000 each) and $150,000 for the turn lane NCDOT will likely require, and the total to be financed is $8,470,000. Financing with bonds offers a low interest rate that one could assume to be about 2.5 percent.
On the downtown site, the building also costs the same $8 million. There is a developer involved and he will charge fees that add up to about $250,000. There also are about $250,000 in fees associated with receiving and maintaining the tax credits so that will be added into the cost. There are no additional site costs or parking costs to RSSS, as the city will donate the land and build the parking. After adding up the costs, the total is $8,500,000. That cost is reduced by $1.5 million in tax credits, leaving $7 million to be financed. The private developer does not have the ability to finance with bonds, so he will pay a higher interest rate which he most recently stated would be 3.95 percent.
Building Costs: $8,000,000 $8,000,000
Developer Fees: 0 250,000
Bond Fees: 0 0
Tax Credit Fees: 0 250,000
(160@ 2,000 ea.): 320,000 0
Turn Lane: 150,000 0
Total project Cost: $8,470,000 $8,500,000
from tax credits: 0 1,500,000
Amount to be
financed: $8,470,000 @ 2.5% interest $7,000,000 @3.95% interest
10-year financing 10-year lease purchase
Many have made generalizations that a capital lease is always more expensive. However, this simply is not the case, as this analysis demonstrates that, in spite of a higher interest rate, the tax credits reduce the overall cost over a 10-year period when looking at a fair comparison of these two sites. The downtown site also has the benefit of the potential to spur other development. When F&M located its corporate headquarters on North Main, it spurred some $14 million in additional development, which generates about $224,000 annually for both the county and the city in property tax revenue. An RSSS central office on South Main would provide an anchor to that end of downtown that will spur additional growth in the tax base. Additional growth would not happen at the Isenberg site. People working at a downtown central office would also be spared the inconvenience of 10 minutes out and 10 minutes back in a car for every errand. Their time is valuable, and they will be more productive if they spend less time in their cars.
The reasons to locate downtown are many, and the downtown site will be the most cost effective any time that a fair comparison is made. I hope as the County Commission searches for answers, their efforts will be based on a fair comparison of the facts. I also hope that unjustified comments like “anywhere but downtown” will be turned into justified comments like “only downtown.”
Pam Hylton Coffield operates Stichin’ Post Gifts on South Main Street in Salisbury.
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