‘Transportation penny’ completing $50M of USC prestige project
By RON AIKEN
When University of South Carolina officials took their plans to purchase 14.6 acres of land off Assembly Street from SCANA for $9.4 million to the Commission on Higher Education for approval, they did not expect the plan to be denied, much less see it become a political football in a power struggle between the Legislature and the Governor’s Mansion over which entity is most fit to oversee and approve universities’ capital building projects.
A crucial element of USC’s acquisition plan that escaped debate, however, was one that also seems to have escaped attention entirely; namely, that USC intends to pay for a $950,000 renovation of a two-story mill building using Richland County penny tax funds “as part of the Greene Street project,” the executive summary reads.
The Greene Street/Innovista project — a key component of USC’s original Innovista master plan first announced back in 2005 — has an overall penny-tax budget of $50 million and is broken into three phases. Phase I was the first major project undertaken and completed using penny tax dollars. Originally budgeted at $12 million, the project was completed last year for $17.4 million and featured intensive renovations to Greene Street by the Colonial Life Arena, including the construction of Foundation Square.
Phase II involves the connecting of Greene Street between Gadsden and Pulaski to include building a pedestrian bridge over the rail lines and the widening of Greene Street west of the Colonial Life Arena. Its preliminary budget is $20 million. Phase III of the Innovista Project would take Greene Street to the river.
When asked about the use of penny tax money to renovate a 67,500-square-foot mill building off Assembly Street, the man in charge of the penny tax program itself — program manager David Beaty — said he was not aware of any such plans until contacted by Quorum.
“This is news to me,” Beaty said.
Beaty and USC officials Quorum spoke with off the record said the $975,000 in question would be taken from funds USC will receive from the penny tax due to loss of access/right of way. Plans for the connector and pedestrian bridge would mean the loss of access to the buildings currently fronting the road, which has an athletic field on one side and USC’s Facilities Management Center on the other. When Quorum spoke to Beaty, he said those negotiations still were taking place as to the figure the final amount would be.
“From our perspective, this is a Richland Penny project, not a USC project,” Beaty said. “We’re widening an existing road and the edge of that footprint goes right to their door.
“In paying them damages for loss of use, we’re treating USC as we would any damaged property owner impacted by a public project. How they then turn and spend that money is their business.”
When asked whether USC was involved in the design of the plans that negatively impacted itself to its financial gain, Beaty said they were,
“They had input on the design.”
For penny tax critics, any use of penny tax funds for projects not relating to transportation needs raises red flags.
“Call me crazy, but I thought the penny tax was for transportation,” said Rep. Kirkman Finlay (R-Richland). “Why did penny tax money build Foundation Square? That’s a USC project. Innovista is a USC project. Why is the public paying for USC to relocate employees?”
For Finlay, how USC’s Innovista priorities became number one on the penny tax list “is a question that needs to be answered,” he said.
“Everybody needs to be focused on this, because at some point someone will cross a line and it’s really going to hurt the taxpayer. The marketing on the penny sales tax was all about transportation, bike lanes, buses, there was no mention of all these projects specifically designed for USC.
“USC is a state-supported school, and these are publicly funded projects they’re getting. At what point are we no longer seeing private development able to go forward because they’re up against these publicly funded deals? It’s an uneven playing field.”
A UNIVERSITY VISION, A PUBLIC EXPENSE
Almost since its inception, the University of South Carolina’s ambitious Innovista project — a proposed 500-acre live-work-play district marrying cutting-edge research with knowledge-economy jobs — has struggled to meet its lofty expectations, whether missing timetables by years, failing to attract anticipated private-sector interest or even, at times, failing to apply rudimentary vetting standards when hiring developers.
While the Great Recession did economic development projects few favors (though, it should be noted, Innovista already had problems before the Recession took hold), the lack of private-sector buy-in to the project proved a greater impediment. At the end of the day, a university-run business park for niche technologies in the middle of downtown is a harder sell in any market than the many multi-platform industrial parks in the greater Midlands area with discounted water and power, easy interstate and rail access, tax incentives and existing shell buildings of all sizes to pick from.
With multiple setbacks on construction deadlines and investment goals and a Cracker Barrel-sized helping of egg on its face after hiring a convicted felon as lead developer, the name itself became synonymous with academic overreach, a casualty of ivory tower optimism about markets and trends it knew too little about and did not accurately predict. Nearly a decade after being conceived by former USC president John Palms, Innovista had little to show for more than $150 million in public investment besides a partially empty building and two parking garages.
Unlike private-sector interest, however, the desire to see Innovista through — especially since current USC president Harris Pastides played a huge role in promoting it before assuming his current position — has not diminished over time. By piggybacking its most significant infrastructure feature, a $50 million continuation of Greene Street to the river, onto the penny tax’s “Special Projects” list, USC found a public funding mechanism that embraced its plans with open arms.
USC paid to complete the final piece of Innovista’s infrastructure — the completion of the Horizon II building at the corner of Assembly and Blossom Streets. As potential tenants over the years causing the builder, Atlanta-based Holder Construction, to postpone completion until an anchor tenant could be secured, USC finally got one in November 2014, when it lured IBM to the table with a no-bid, $70 million contract to do USC’s IT work. The move bypassed state procurement law and resulted in 70 employees in the Enterprise Applications department losing their jobs with the university in the process.
For Columbia City Councilman Danial Rickenmann, the degree to which USC has paid for Innovista with public dollars is offensive.
“The Innovista TIF, if you look at what was projected as growth and the jobs it was supposed to create, none of that has yet to come to fruition at all,” Rickenmann said in an interview with The Nerve last year. “They’ve spent close to 300 million so far with taxpayer money and we’re just now getting the second Horizon building thanks to the IBM deal.
“A parking garage USC told council was do-or-die for getting business in, all it turned out to be was the public paying for student parking. In my opinion public money has not been used wisely with Innovista and the university’s continuing to throw money at it is troubling to me as a taxpayer.”