Project Category: Innovative Project Financing
Organization Name: City of Rock Hill and Assured Administration
Organization Website: http://www.riverwalkcarolinas.com
998 Riverwalk Parkway
Rock Hill, South Carolina 29730
Project Cost: $431,000.00
Rock Hill, SC was built by the textile industry and it prospered by it for a century. After the demise of the textile industry, Rock Hill aggressively pursued a new economic base and sought to overcome the blighting effects of millions of square feet of empty textile factories. Riverwalk is a project that succeeded on both fronts: creating a 21st century economic base for the community by redeveloping an abandoned, environmentally tainted textile mill site. The Celanese Plant was a mainstay of Rock Hill’s economy, employing 2,000 people at its peak. The Celanese Plant closed in 2005, leaving a massive, obsolete manufacturing facility with extensive environmental concerns. At the time, the future of this site seemed bleak.
In October 2005 Assured Administration purchased the plant site, industrial solid waste landfills, fly ash landfills and two hazardous waste management units regulated by EPA. The entire 1,000 acres was located just outside the City of Rock Hill. Assured Administration assumed responsibility for remediation of environmental conditions. Between 2005 and 2007, Assured Administration invested more than $40 million in demolition and remediation costs.
Assured and the City worked for more than two years to negotiate a financing agreement that would allow the project, now named Riverwalk, to get underway during the depths of the Great Recession. The parties collaborated in the design, construction and financing of Riverwalk. Elements of this collaboration included:
– Donation of land by Assured Administration for recreational/sports facilities
– Creative public-private financing structures including:
– TIF/MID Bonds
– Hospitality Tax Certificates of Participation
– New Markets Tax Credits
– State tax credits and grants
– Developer-led environmental assessment, remediation, permitting and site grading as required to develop brownfield sites for public uses
– Construction management of all facilities by the developer
$338 million built; 5 million SF comm./industrial, 620 res. units, 7 biking/recreation facilities
Community Needs Addressed:
Riverwalk meets major community needs including:
- Job Creation: Prior to Riverwalk’s emergence, Rock Hill suffered from an unemployment rate above 15%. The Riverwalk Business Park and commercial tenants have produced nearly 900 jobs for local residents. Construction jobs have been numerous in support of the $431 million total investment.
- Diversified Investment: With the demise of the textile industry, Rock Hill needed to diversify its economic base and attract new industries. Riverwalk has been highly successful in attracting advanced manufacturing, distribution, office, and retail investments.
- Environmental Remediation: A large portion of the 1,000 acres acquired by Assured Administration was environmentally-impaired. The massive, obsolete Celanese Plant housed a complex chemical operation that converted wood pulp into fibers. The site included the plant facilities, industrial solid waste landfills, fly ash landfills and two hazardous waste management units regulated under the EPA’s Resource Conservation and Recovery Act (RCRA). Assured Administration spent $40 million to rid the community of the obsolete structures and dangerous waste/soils.
- Quality of Life: The outdoor recreation amenities have been enthusiastically embraced by the citizens of Rock Hill and visitors. The river access, biking facilities, and natural trails are all used extensively. New restaurants, retail and service businesses add to the vitality of the community.
- Sports Tourism: Rock Hill has a strong history of success attracting sports events, hosting visitors from across the region, country, and world. Softball, soccer, tennis, and numerous other competitions bring thousands of athletes, coaches, and families to Rock Hill. The economic impact ($141 million) over the last 10 years has been dramatic. Riverwalk raises Rock Hill’s sports tourism program even higher with large national and international events bring more economic impact to the community.
Benefits and outcome:
The community has benefited from the removal of an environmental danger, the creation of a business park for new investment and jobs, the construction of tremendous sport tourism facilities, and the creation of a live-work-play new urbanism community.
Investment: Private investment at Riverwalk includes $137 million in single family and multi-family residential units, $48 million in commercial buildings, and $153 million in industrial facilities. Public amenities ($20 million) include a velodrome, BMX course, criterium course, mountain biking course, riverfront trails and greenspace, canoe/kayak/other public facilities. $34 million was invested in infrastructure following a $40 million investment in environmental clean-up and demolition.
Jobs: As of March 2017, 869 jobs have been attracted to Riverwalk at commercial and industrial tenants. Construction jobs have been plentiful for over 10 years through extensive demolition, redevelopment activities over the 1,000 acre site, and construction of 5 million sq. ft. of commercial/industrial buildings and 620 residential units.
Sports Tourism: The unique cycling and recreation amenities at Riverwalk have dramatically accelerated the City of Rock Hill’s sports tourism successes. At full build-out, the velodrome, BMX course, mountain biking, and other outdoor recreation facilities will double the sports tourism annual economic impact. In the last year alone, $21 million was brought to Rock Hill through sports tourism.
Environmental Remediation: A large portion of the 1,000 acres was environmentally-impaired. The massive, obsolete manufacturing plant housed a complex chemical operation which left behind environmental liabilities . The site included the plant facilities, industrial landfills, fly ash and two hazardous waste management units regulated under the EPA’s Resource Conservation and Recovery Act (RCRA). Assured Administration spent $40 million to remove the obsolete structures, waste and soils
Project partners and collaborators:
Assured Administration and the City of Rock Hill have worked together on the development of Riverwalk since 2005. On a secondary basis, the State of South Carolina and the U.S. Department of Treasury can be viewed as collaborators through the awarding of tax credits and grants to the project.
Assured Administration and City of Rock Hill crafted a complex financing agreement:
- Mixed use development plan including 800 single family homes, 1,000 multifamily units, 3.2 million sq. ft. of industrial, 600,0000 sq. ft. of commercial space and an unprecedented number public recreational amenities.
- Leadership by the City in the creation of the SC Textile Communities Revitalization Act, a state law creating a 25% state tax credit for redevelopment of former textile mill sites. Under the Act, Riverwalk received privileged treatment as the entire 1,000 site was designated as eligible for the tax credit.
- The City’s creation of a Tax Increment Financing (TIF) district to fund the costs of up to $19.4 million of public infrastructure to serve Riverwalk.
- The creation of a Municipal Improvement District (MID) to provide a security mechanism for the City’s TIF debt and to fund up to $29 million of development costs.
- Commitment by the City to provide credit enhancements for issuance of $10 million in TIF debt.
- Creation and implementation of a $48.5 million shared Public Amenities Plan that resulted in the donation of 250 acres of land for public recreation and the construction of the Giordana Velodrome, Novant Health BMX Supercross Track, public athletic fields, public riverfront amenities, and a closed bicycle road course.
Elements of this collaboration included:
- Donation of land by the developer for recreational and sports facilities
- Creative public-private financing structures including:
- TIF/MID Bonds
- Hospitality Tax Certificates of Participation
- New Markets Tax Credits
- SC Textile Communities Revitalization Tax Credits
- SC state grants
What makes your project unique?:
Well-developed Partnership: Agreement by the developer and City to:
- annex the property into the City of Rock Hill
- pursue a diverse, mixed use development plan
- create a TIF district to fund $19.4 million in infrastructure
- create a MID to provide a security for the City’s TIF debt and fund $29 million of other development costs
- lead the creation of a 25% state tax credit for former textile sites
- creation of a Shared Public Amenities Plan (250 acres; $20 million investment)
- City provided credit enhancements for an initial $10 million in TIF debt; allows construction to begin at a time when development was virtually stopped
Creative Financing: Assured Administration had already put $20 million into demolition/remediation when infrastructure was needed. It would not be feasible or reasonable to expect a private entity to build out public infrastructure for 1,000+ acres. The City of Rock Hill stepped forward with the TIF/MID bonds which spurred the vertical development. The TIF/MID dual structure was special because it provided the necessary credit support for the bond issue.
Timing: Assured Administration acquired 1,000 acres of impaired property and was on its way towards investing $40 million in demolition/remediation just prior to the Great Recession. The challenges and risks associated with redeveloping a former industrial site grew exponentially as capital markets dried up and unemployment rates in Rock Hill were at 15+%. If the project had been dependent on private capital, it almost certainly would have failed. The parties worked for over two years to negotiate a financing agreement allowing the project to get underway in the midst of the Great Recession.
Unique Uses: In addition to traditional office, residential, and industrial uses, very unique, Olympic-quality facilities for cycling (velodrome, mountain biking course, BMX course, etc.) and outdoor recreation (canoe launch, riverfront trail, kayaking, etc.) have been built.
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