How public-private partnerships bring development to fruition
Main Street’s paved with money. Some of that’s your tax dollars actually at work, through infrastructure spending alongside private investments. At one end of downtown, the City helped finance what’s today known as NOMA. Now a similar deal’s remaking the other end.
“Public-private partnerships have made downtown Greenville what it is today,” says Brody Glenn, President of Centennial American Properties, which is developing the massive Camperdown project on South Main Street, where the City will be investing millions, too.
Centennial’s $300 million-plus development across from the Peace Center—another seminal public-private partnership that included $6.5 million in City funds in 1991—offers a timely illustration of how developers can raise additional capital with the help of government.
"You’re able to leverage each other, so you’re able to both bring something to the table,” Mary Douglas Hirsch, the City’s Real Estate Development Manager, says of P3s.
Hirsch cites perhaps the biggest-ticket item big developers need: “The cost of parking is very expensive, as you can image, and so a lot of times, in order to get a new corporate headquarters or new office building or new development, the City will look at building the parking to support it and support the area.”
The Camperdown deal’s unique, Hirsch and Glenn say. The City’s approved budget for 2019-’20 shows about $18.5 million in “tax increment financing” in two funds dedicated to specific districts: Downtown Infrastructure and West End Tax Increment.
Enter what Hirsch calls a “synthetic TIF.” In the Camperdown case, Centennial will bear all upfront costs. Then, over the next 25 years, the City, using a portion of property taxes the project generates, will reimburse the developer—but only up to $20 million and only for the public pieces, including streetscaping, riverfront improvements and the open plaza.
“So that’s something really new,” Hirsch says, while Glenn points out that without the City’s financing plan, Camperdown’s buildings would have simply wrapped around a parking garage—and the developer would have forgone creating the public square.
“If you think about it,” Glenn says, “we’ve got the parks and we’ve got the (Liberty) bridge and we’ve got all those things, then we’ve got Main Street, but we have very few, if any at all, active open spaces, so creating that outdoor space for people to congregate in an informal setting, that’s something that’s important in all major cities.”
Hence the City’s willingness to contribute to such projects as the $63 million Bi-Lo Center, now the Bon Secours Wellness Arena, in 1998; the renovation of the West End Market, with a $4 million investment, in 1994; and the granddaddy of P3s, which kickstarted downtown in 1982, the $34 million “Greenville Commons” and the Hyatt Regency.
The City’s public-private partnerships go almost exclusively to real estate deals. Nationally, P3s grab headlines because they’re multibillion-dollar infrastructure projects: transportation, schools, affordable housing and stadiums, prisons and public broadband, to name a few.
In Greenville, as Glenn points out, the City takes advantage of P3s not only to incentivize developers but, in fact, to direct development according to its Master Plan.
“The way we look at it,” Hirsch says, “is the City and the private sector are rebuilding downtown and our city together. We’re not doing it alone and the private sector needs the city and the city needs the private sector. So there are a lot of benefits.”
Glenn, who enjoys riding his bicycle to work and spending time with his family downtown, says estimating benefits taxpayers get from the City’s P3 investments would be incalculable. Mentioning Fluor Field and Falls Park, he says, “The returns are in the multiples.”