Taxpayers and voters take note; what’s behind the rift behind the Cayce TIF and your tax dollars
Cayce, SC (Paul Kirby) – Recently, most media sources have been attempting to detail a brewing battle within the Lexington County Council regarding the renewal of the Cayce TIF District. It has also pitted some of the county council against the elected leaders of the City of Cayce.
Many have no idea what a TIF District even is, and even fewer understand why our local government’s leadership is spending any time at all disagreeing about it. What follows is an attempt to explain the issues surrounding the rift about the TIF as plainly as possible.
First, a TIF is defined by Wikipedia as tax increment financing. TIFs are a way to provide publicly supported financing and subsidies for redevelopment, infrastructure, and other community-improvement projects in many areas across the country. They are a method of public financing that started in California in the early 1950’s.
A TIF allows the governing body of the area to divert future property tax revenue increases from a specific area or district toward economic or community improvement projects in the designated TIF district only. Those funds are not spread around the entire taxed area as other property taxes are. In most cases, the government that oversees the TIF district, borrows money for projects by selling bonds, then the bond payments are made with money collected in the TIF.
Really confused now, let’s see if this will help. In a TIF district, the governing bodies agree that any property tax increases that come out of that area over a specified period will go solely to improving that area’s streets, water, sewers, infrastructure, as well as other public quality of life projects. This is done for a specific time that is usually 20 years.
In the case of the Cayce TIF, about 20 years ago (1998), the county council agreed that all the increases in tax money that came out of the Cayce TIF District would be returned to that area. It includes Cayce’s portion of the Congaree River and the other parts of city that were under or undeveloped and run down.
Those funds would be used to redevelop and improve that area. In other words, if your property taxes increased $100 over the 20-year period in the Cayce TIF district, that entire $100 would stay there and not be shared across the county for other services anywhere else.
Without a TIF in place, your extra $100 in property taxes would go into the general fund. That money could be shared by every agency and service that draws from that fund. By every other agency, I mean schools, libraries, the zoo, the sheriff’s department, fire and ambulance services, and on and on.
In the past 20 years, the Cayce TIF has been used for some great projects that really have improved the area. The Riverwalk has been built, improved, and enjoyed by thousands. The streets are nicer to travel, the 12th Street Extension has been redeveloped, there’s a new, world-class tennis and fitness center, and much more. Cayce leaders and some county council members say that all of this has attracted businesses, industries, and homes. All these pay more property taxes so the government has more money available for services everywhere.
Now, the leaders of Cayce, and some of the county council members, including the chairman of the council, Todd Cullum, want to extend the Cayce TIF for another 20 years. They also want the extension to use as a starting point, the property tax values as they were in 1998, not what they are now in 2017. This would allow the TIF to start producing revenues immediately, not after the properties in the area are reassessed at some point in the future.
Herein lays the problem and the root of the rift that now seems to be turning into a knock down drag out fight!
Last November, we had quite the turnover on county council. Darrell Hudson and Scott Whetstone beat two county council incumbents. Erin Long Bergerson was elected to fill the Irmo, Chapin seat after long serving councilman Johnny Jeffcoat retired. Sitting members Todd Cullum, Debbie Summers, Larry Brigham, Bobby Keisler, Phil Yarborough, and Ned Tolar either won re-election or were not in the 2016 election cycle.
The three new members campaigned on the promise that they would be the voice of the people, be good stewards of everyone’s money, and do what they thought was right no matter how tough an issue they faced. In the case of the new council members, they seem to have taken those promises to heart!
Hudson, Whetstone, and Bergerson have now all said publicly that they oppose a redo of the Cayce TIF for another 20 years. According to Ned Tolar, he and Phil Yarborough have also agreed that they also will vote against the renewal of the Cayce TIF district this time around.
This dissent has set off a firestorm of controversy among the council and in the City of Cayce as well. All sides have lobbed press releases back and forth to make their position known and seem like their ideas are the right things to do.
On the soundly NO TIF renewal side, five county councilmembers say that there are more pressing issues than additional investments and improvements in Cayce. They say the county needs to fix its own dirt roads, hire more firefighters and EMTs, and concentrate on other, higher priority issues. Certainly, no one would say that our school districts aren’t growing; they’re always in need of more money too.
On the YES side, other county and Cayce city leaders say we can’t stop what we haven’t finished. Knox Abbott Drive is slated for what engineers call a traffic calming project. They need to improve public safety facilities, and have other projects that will continue to attract big taxpayers like SCE&G, Amazon, and Nephron Pharmaceuticals, as well as homeowners who all pay big property taxes.
These folks say that the area has benefitted immensely from the relatively little amount that has really been invested. If the TIF is redone for another 20 years, the return on investment will benefit not only Cayce, but the entire county.
Lexington County Councilman Darrell Hudson said during a recent interview that he works for the people who elected him. “I told the people who voted for me that I planned to help operate the county’s business just like it was my own business,” he said. “With my vote against the extension of the Cayce TIF, that’s exactly what I’m doing!”
Hudson says in past years, the county council has been operating in lockstep behind its leadership. Those leaders have had little opposition from any of other members. “Recently, when some of us started asking questions, the amount of money that was being requested to complete projects with Cayce TIF money dropped by $5 million. Maybe we need to ask some more questions!” Hudson said. “When we ask questions, some of the council’s leadership call it stress, I simply call it doing my job,” he concluded.
Councilman Ned Tolar said, “When I was elected, I promised to be a watchdog for the taxpayer, but I was constantly outvoted. Now, with the new makeup of the council, we are taking this council in a new and different direction.”
Tolar continued saying, “We now have a CPA on council in Erin (Erin Long Bergerson), and she is going over the budget with a fine-toothed comb. She’s not looking at millions of dollars, she’s paying attention to every penny. It makes the money we have available to us do the most without having to ever discuss raising taxes,” he concluded.
Tolar also said that renewal of the Cayce TIF would set a dangerous precedent. “If we do this for this TIF district, everyone will expect us to do the same for theirs. We just can’t open that box up because there’d be no closing it back!”
The Republican party of Lexington County has also weighed in on the matter. They praise the members of the county council that are opposing the Cayce TIF extension.
GOP leaders says that the people of Lexington County have invested in the area since 1998. Now, per their statement, “The City of Cayce is asking the county to continue to put on hold their ROI (return on investment) for an additional 20 years in an effort to essentially do more “beautification” projects down Knox Abbott Drive.” They say proposed beautification or streetscape projects would necessitate tearing up recently repaved roads to drop in more flower beds.
In the latest release from the City of Cayce, leaders point out what a great investment the county’s TIF contributions have been. The county has invested a mere $1,845,613 to the TIF over its lifetime, and that money has driven more than $41 million in investments outside the existing TIF, according to Cayce. Keep in mind that this new development’s full taxable value has been added to the Lexington County tax rolls, Cayce leaders pointed out. More taxable value means more property taxes to collect, which means more money for county services going into that great big pot of money called the general fund that helps pay for services county wide.
Erin Long Bergerson, one of the newly elected Lexington County council members, called the major returns on investment that the City of Cayce and Lexington County Chairmen Cullum are bragging about an embellished narrative. “Lexington County has made huge investments in the Saxe Gotha Industrial Park in that area and that’s what has created the biggest incentive for the new development. That has made a difference far and above what the TIF district created,” Bergerson said.
Cayce’s Mayor Partin and the city are concerned that their TIF extension request is being viewed using a separate standard than others currently and previously considered by the Lexington County Council. Historically, consideration of TIF districts is based on whether or not the projects will positively impact and encourage economic development, according to the city.
Partin pointed out that the Town of Lexington is currently asking for approximately $10 million for a TIF District. These funds would finance bonds to improve roads, especially in the area around Corley Mill Road, Sunset Boulevard, Ginny Lane, and the I-20 corridor of the town.
According to Cayce and Councilman Cullum, the four members of county council balking at the Cayce TIF extension are said to be supporting the Lexington effort. The amount that Cayce is requesting, $4.6 million, is less than half of the Lexington request, Mayor Partin pointed out.
There are other TIF districts around the county. There’s one in West Columbia, and the new Icehouse Amphitheater in Lexington was financed through a TIF district that will pay off its construction loans.
County Council Chairmen Todd Cullum, who represents the Cayce area of the county, is often plain spoken, and is said to be known for his tell- it- like- it- is nature. He pulled no punches when he was interviewed for this story. “The members of the council that are against the Cayce TIF renewal are not well educated about the process and don’t seem to be willing to learn. The little bit that we (Lexington County) have invested in the Cayce TIF district has reaped huge returns that benefit us all!”
Cullum used the Cayce Tennis and Fitness Center as a prime example of what he says is the real cause for the development boom in the area. “That tennis center was built with funds from the Cayce TIF. Now, right across the street, a hotel is being built. That hotel is coming there because of the tennis center, not because of Amazon, Nephron, or SCANA.”
Cullum said the tennis center has already hosted the USTA Southern Sectional Youth Quarter Finals several times over the last few years. It was also voted the USTA’s Public Facility of the Year in 2013. He says it’s already been booked for thirty dates in 2017, and more is expected.
Each of these events bring hundreds of visitors to the area, all of whom are ready to spend their money here. They will be staying in that hotel right across the street and in area businesses while their children are playing tennis in those events, according to Cullum. “That’s not an opinion, the return on the TIF investment is there, it’s a fact,” he said.
He went on to say that the property taxes that the new Courtyard Hotel will pay annually once it’s completed will be approximately $135,000 per year or more. That same property before the hotel’s construction paid an annual property tax of approximately $15,500 per year. “That hotel is there because of those tennis events; SCANA and all the rest of the businesses and industry in the area don’t now, and will never have enough visitors to need the rooms in that property. It’s the tennis center across the street, built with TIF money I might remind you, that has created that need for hotel rooms and in turn the improvements to that property!”
Cullum said that the adjacent apartment complex is also another prime example of the growth he’s referring to. “The county’s portion of the yearly property taxes paid on those apartments is $102,000. For that we basically provide them with nothing! Cayce provides their police and fire protection, they deal with their own garbage, everything; Cayce does it all and we sit back and rake in the cash!”
Likewise, Cullum points to the Riverwalk as another economic engine that is now raking in the benefits. It too was built with TIF income. “New housing developments are being built in Cayce and West Columbia right now that connect directly to the Riverwalk. All those homes, condos, and apartments are paying big property taxes far and above what the empty, overgrown properties paid. All of those property taxes are a direct result of us investing in the growth and development with TIF funds.”
Cullum said the most valuable real estate in Lexington County now is in the adjacent West Columbia TIF district. “In Congaree Park off Alexander Street, a 1/8th of an acre recently sold for $350,000! Those homes are being built on those lots because of that beautiful river view and a direct connection from the development to the Riverwalk.” He said that the property taxes that Lexington County will reap for those properties will be astronomical in comparison to the small amount they are investing through the TIF district.
Cullum said that Councilman Tolar’s comments about establishing a dangerous precedent by renewing the Cayce TIF is confusing to him. Cayce’s is not the first TIF that has come up for renewal in Lexington County. In fact, the West Columbia TIF district was renewed last summer without opposition, according to Cullum. It was also redone at the 1998 values, just like Cayce is requesting. “I was out of town last summer when the West Columbia TIF district was renewed,” Cullum said. “The record of that session is very clear. Councilman Tolar was at that meeting when that TIF was renewed for the district he serves, and he had no opposition to it. How did he close that box!”
Cayce Mayor Partin says that the term “beautification” that is being batted around is both misleading and unfair. “First, the money we have requested in the renewed TIF District would go to additional infrastructure improvement. Also the traffic calming medians we were talking about installing on Knox Abbott Drive look like it won’t pass the SCDOT approval process anyway because of traffic congestion that already plagues that corridor.”
Partin warned that this public fighting might curtail further development across the county. “When potential investors see all this bickering and fighting, do you think they’re going to want to located here? They’re probably going to take their money somewhere else where the environment is more development friendly,” she continued.
County Councilman Scott Whetstone said Saturday that he and several other council members are just ready to vote on this issue and move on. “I think most of the 9 council members have made up their minds on the Cayce TIF one way or another. We need to vote and then move on to the next issue,” Whetstone said.
Whetstone also said that didn’t want council members to take this issue personally or let it taint their relationships for the next four years. “I have heard from many of the constituents in my district and I am voting as the majority of them have asked me to; my vote will be no.”
Each side makes passionate arguments either for or against the renewal of the Cayce TIF. It remains to be seen exactly how this will all shake out, or how bruised feelings and egos will be when all is said and done.
I have done my very best to explain the ins and outs of this complicated issue. Now, if you’ve made it to this point in this article without falling asleep, you must really care. It’s time for you to decide how you feel. Is the renewal a good idea, or should we say no and move on to the next issue? After all, it is our tax dollars funding our county services we’re discussing.
As of Sunday, March 26, 2107, the final vote on the request Cayce TIF District renewal is not on the county council’s Tuesday agenda. To contact your council member and make your feelings known, go to the council tab on the Lexington County website. There, you can find the contact information for all the councilmembers.