Tax dollars fueling private investors in Downtown Florence - WMBFNews.com, Myrtle Beach/Florence SC, Weather

Tax dollars fueling private investors in Downtown Florence

FLORENCE, SC (WMBF) – Taxpayer dollars are freely being given away in hopes to revitalize Downtown Florence and boost the local economy, but what's behind the million-dollar changes happening there?

WMBF News' Ken Baker sat down with Florence officials and business leaders to investigate, and he discovered that many of the buildings in Downtown Florence were purchased with citizens' tax dollars, and then given to private investors.

Boarded up, dilapidated and empty - this is the story of Florence's Downtown. City leaders say the area became run-down years ago with the development of strip malls, and business owners turned their back to Downtown Florence.

But now, a resurgence is underway, and it all began with Tim Norwood, the owner of Victor's Bistro and part-owner of Hotel Florence.

“Before we came down here, there was really not much at all - mostly boarded up buildings,” he says. “And everybody - my best friends, my family, said you are crazy to do this.”

He has spent millions of dollars building and running these new local businesses, starting with renovating the building given to him by the city.

It's that move that has people talking.

“Why are we doing this? I mean why are we giving away all these properties? We are spending so much of the taxpayer money taking a gamble on creating growth and development for private individuals,” says Councilman Ed Robinson with the City of Florence.

Nearly $1 million of taxpayer dollars purchased property that the city then gave away.

“If the public is doing all the investment, you don't change the environment,” says Drew Griffin, Florence City Manager. “You make it prettier, but you're not really causing the investment to grow and really benefit the public body.”

We did some digging and found out which properties were purchased, and who they were given to.

The former Trust Building property located on the intersections of Irby and West Evans Street, cost the city more than $557,000 and was given away to Francis Marion University for the building of a medical school.

The Kuker building located next to the Kress on the corner of North Dargan and Evans cost $200,000 and given away for a $10 million dollar investment that is coming soon.

The building that Hotel Florence and Victor's Bistro now share cost $425,000 and is now owned by six investors. All properties were purchased using hospitality and water sewer money.

“What happens, not if, when, this thing fails?” asks Robinson. “I don't see this thing being sustainable. I just don't see it. And then all of this money we have spent giving to these special select group of people will be left on the backs of taxpayers.”

Griffin defends the investments, saying, “I think every redevelopment probably in South Carolina or the nation starts with the concept of a public-private partnership.”

This partnership is something Norwood says he banked on before moving Victor's Bistro and Hotel Florence into its current location.

“After we talked to the city, they gave us some incentives which was acquisition of the building, some rebates on some taxes over seven years, sewer and water reduction rates,” he says.

Norwood and his group of investors aren't the only group getting those incentives.

Just last year, a $10 million renovation on the Kuker Building was announced. It will soon be home to the first apartments in downtown Florence, a small sauce factory, and a rooftop bar.

“It's very different from anything I've ever done,” says investor Ken Ard. “There is a history to building an Outback on the interstate or a hotel on the interstate. What we are trying to do is recreate a viable business entity in a 115-year-old building.”

Robinson says he's not against downtown revitalization, but he does feel minorities are being left out of re-building downtown Florence.

“I'm not against it at all. I think we need it, but we can't do it one-sided: it needs to have diversity,” he adds.

The city says before any property is purchased and given away, a good hard look is given to the investors' plans for investment, because it's important to not let one project fail.

When asked if this investment is a gamble with the taxpayers' money, Griffin responded: “Generally many people will think so. We generally do not because of infrastructure changes that occur… let's say Hotel [Florence] and Victor's invested their $7 million, and two years later that property failed. Well for one, the building has been redeveloped, and it has a new value. It has gone from a piece of property that was at $150,000, where they have spent $7 million on that building. And let's say for tax purposes it is now worth $5 million. Well instead of the $150,000, the city will now be getting a tax assessment that is in the neighborhood of $5 million, which certainly, over time, will assist the city in repaying that investment.”

Not too long ago, the city put on a special tax in the historic district of Downtown Florence. Those tax dollars by law can go towards bringing re-development to lower income areas of Florence. Currently some of those funds are going towards the building of a $4 million gym.

Copyright 2014 WMBF News. All rights reserved

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