TEGA CAY – Frustrated by the lack of sports facilities and out of patience with the snail’s pace of fundraising, the city is trying to raise the millions of dollars it needs to build its 60+-acre Catawba Park through a sometimes controversial financing method.
The plan is to use Tax Increment Financing, setting up a source of revenue more commonly used by cities to jumpstart development in blighted communities. It involves setting up a designated tax district and Tega Cay would need a buy-in from the Fort Mill School District and York County because each would be stakeholders in the proposed district. City officials are scheduled to pitch the idea to representatives of the other municipalities in a closed-door meeting at the end of Tuesday night’s regularly scheduled school board meeting. The item is listed on the school board meeting agenda as a contractual discussion among the three municipalities.
Originally estimated to cost $12 million, the city now expects construction to run in the ballpark of $15 million if the facility where built this year. Tega Cay has a little over $1 million of that set aside, not counting any money raised by Tega Cay Forever, a not-for-profit established to help fund the park through tax-deductible donations.
“We’ve been talking about the park for 10 years,” Tega Cay Mayor David O’Neal said in a recent interview conducted by text message.
“Nothing has happened. Where does the money come from? Growth has killed us financially. All this ‘new money from growth’ previously talked about to pay for parks has had to go for new fire stations to protect the new homes, for new police stations because the old one is too small, for new water towers so new developments can have water in those new homes. Parks get pushed to the bottom of importance.”
Besides a lack of ballfields and other facilities for local recreation and youth league sports, O’Neal said Tega Cay is missing out on sports tourism opportunities it could otherwise take advantage of with something like Catawba Park.
“We are not able to host a state title little league tournament because we don’t have adequate facilities,” he said, adding that the city recently had to turn down an offer.
Google the phrase “Tax Increment Financing” and pages of results provide a mixed-bag of reports and viewpoints. In essence, an agreement is reached in which future tax revenue from the anticipated increase in value of property within the district, which normally would be spread among the various municipalities, goes instead to pay the debt service on any financed projects. In Tega Cay’s scenario, the massive, mixed-use Game-On development would be in the district. The city is wagering that the mix of homes, sports facilities, hospitality businesses and retail will raise property values within the district high enough to be worth it.
Sometimes, it works as planned and other times it falls flat, according to one report. Proponents see it as a calculated risk. Detractors point to instances where the public’s money is used to provide corporate welfare, offering generous subsidies in cash and massive tax breaks for private development. Some government watchdogs decry the lack of public oversight for how tax dollars are spent through a TIF.
Asked why it’s the best method for Tega Cay to finance Catawba Park, City Manager Charlie Funderburk, also in a text, replied, “I don’t know that I would say it’s the best, but it is definitely one of several sound ways of funding mechanisms…it is also not the reason for exploring a TIF, but rather a by-product…TIFs are used all the time as a way to help and promote private investments to further bolster economic development for communities…while it is new for Tega Cay and FMSD, it is by no means a new concept and there are lots of school districts, counties and cities throughout the state that have TIF districts.”
Not the typical community
It might be somewhat ironic that Tega Cay, regularly ranked as one of the most thriving, desirable and still affordable places to live in the region, would go to a method more commonly associated with municipal efforts to reverse blight. It’s a city with a median household income of over $120,000 – more than twice the national average – where the average home is valued at around $300,000 and the majority of property owners pay $2,000 or less in taxes annually.
The city could pay for the park with a tax increase, but O’Neal said that’s not on the table at the moment. He said the city doesn’t know how much that would impact Tega Cay property taxpayers.
“We haven’t really run the numbers on a tax increase since we don’t think it would happen, but if there was a regime change (or when there is a regime change upon my retirement) things might be different,” he texted.
One reason O’Neal said he opposes raising city taxes to pay for the park is he expects Fort Mill school taxes, which are not levied on owner-occupied primary homes, to rise.
“Do we raise taxes to fund the parks? Well, I don’t think we can. The school district will raise school taxes each of the next few years. They have both hands in our wallets, so it would be immoral to raise taxes on people knowing what FMSD is going to do to them. A TIF on Game-On development is about my only option…or I can wait another ten years and we can still talk about the park that is coming…someday, someday!”
Asked if he sees any downside to a TIF, O’Neal responded, “(The) downside to a TIF is if the economy went sour and tax receipts couldn’t service the debt.”