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Redevelopment Area Up For Grabs?

City says Novus has changed scope of north project

May 11, 2007
Rock Hill residents in the buyout area north of Manchester Road might be facing more project delays.

The Rock Hill Board of Aldermen last week unanimously agreed to once again seek requests for proposals (RFPs) for redevelopment of that area. The city still has a redevelopment contract with Novus Companies.

Mayor Julie Morgan said the action was taken due to Novus' request for an additional $7 million in tax increment financing to redevelop that area. She said its request changed the scope of the redevelopment project.

Morgan said she had met with residents in the north buyout area to "ascertain how they feel about the progress to this point with Novus and the request that Novus has made for an additional $7 million."

"I feel it is incumbent upon us to at least try to determine if any other developer can proceed with RPA-2 (Redevelopment Project Area - northside) under the previously-approved plan," Morgan said in a prepared statement. She said Novus could also participate in the RFP procedure.

City Attorney Ken Heinz said Novus is required to buy all the property in the north side buyout area.

"They (Novus) haven't done it and said they can't do it under the current constraints of the agreement," Heinz said. "They're saying basically that it's impossible to follow the terms of the agreement."

Morgan told the Times that while a lot of people were "thrilled with their offers, 50 percent didn't feel they were justified.

"I think he (Jonathan Browne of Novus) originally underestimated the fair market value of homes on the north side," Morgan said. "Because those homeowners have been in limbo for over eight years, their property values have suffered."

She said the city wanted Novus to make offers based on fair market values plus $40,000 on the homes.

"He (Browne) has made choices to negotiate or not negotiate with homeowners on the north side and it has spanned a two-year period," Morgan said. "He has had four contract offers and, having said that, we need to find out if there's a developer that can do the project for $18 million or perhaps ask for less TIF."

Browne said his firm prefers not to obtain the property through eminent domain. It wants to acquire the ground through mutually-agreeable purchase prices with owners.

"Novus, therefore, requested a dollar-for-dollar adjustment to the TIF based upon the final dollar difference to the acquisition budget previously approved by the TIF Commission and the city of Rock Hill," Browne added.

Regarding the RFP, Browne didn't think the city could seek other RFPs.

"I don't know what they're doing asking for an RFP when we are the named developer and are still within our contract time frame," he added.

Browne said when meeting with the north side residents, he asked them what they would take and he issued contracts based on the price they gave him. The price, however, was $8 million over the acquisition budget that had been approved by the city and the TIF Commission.

"I said they had to realize that the price was conditional on city and TIF Commission adjusting the dollar-for-dollar difference between what was approved and what is being offered," Browne said. "The city did not agree to take that issue up at the time, and therefore I couldn't exercise the option to move forward on the contracts."

He added that the contract states that Novus cannot begin acquisition of north side properties until the south side development is 70 percent leased.

"We haven't completed construction yet," Browne said. "We aren't' even close to the beginning point."

Heinz said he hopes to have the RFPs ready for the board at its Tuesday night meeting.

In January 2004, the board of aldermen announced that Novus would be redeveloping 36.9 acres at the northwest and southwest corners of Manchester/McKnight roads. The northwest corner, in particular, had been searching for a developer, having gone through four previous redevelopment plans. Novus planned to buy out 126 properties on the north side, 78 of which are owner-occupied homes, and 48 properties, including 15 homes, on the south side

In March 2005, the board approved the $95.4 million project with $27.4 million of tax increment financing. The north side redevelopment project included offices, retail and restaurants with the northwest corner featuring a senior independent living center.

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