Augusta Commission: Revitalization not attracting private investment

Revitalization project lacks investor interest

 

Called a potential game changer for its ability to attract private development to a long-blighted area, Augusta’s Laney-Walker and Bethlehem redevelopment project hasn’t attracted anything close to its promise of a 10-to-1 ratio of private and public dollars in its few first years.

Conceived as a compromise to win support for completion of the Augusta Convention Center, redevelopment of the historically black districts was guaranteed about $750,000 annually from a transportation and tourism fee charged on hotel room rentals for 50 years.

With an Urban Redevelop­ment Plan in place, city officials borrowed $8 million against the future fees in 2010 and began spending the money while continuing to tout the project’s ability to leverage public dollars for private investment.

Three years later, the first bond issue has been spent – along with $2.5 million in federal Housing and Urban Develop­ment funds – but private investment remains an “aspirational goal,” according to city documents from Housing and Community Development Direc­tor Chester Wheeler.

“We are trying to turn around almost a half-century of blight and disinvestment in our urban core,” said the document, a response to Commis­sioner Alvin Mason’s request for information about the identities of private developers and amounts of their investments.

“In the short term, this means that the public sector will be bearing much of the financial burden for this turnaround play,” the document say. “In the longer term, it is our goal to have the private sector step into the shoes of what government is doing today.”

The project Web site, devised by consultants Melaver-McIntosh as part of a comprehensive “rebranding” strategy for the area, cites the objective of “leveraging each public dollar with 10 private investment dollars” and offers low- and interest-free financing and other assistance toward that end.

From the start, the project was billed as using public funding merely to attract private investment. Jesse Wiles, the president of project consultant Asset Property Disposition Inc., said in 2009 that the “vast majority” of funds would come from the private sector, according to Augusta Chronicle archives. Mayor Deke Copenhaver has often cited the 10-to-1 ratio as he’s promoted the project at planning conferences across the country.

According to the city’s own figures, however, private investment has been limited so far. Wheeler’s document says the ratio of private to government dollars on completed construction projects is 7-to-1, excluding the city’s investment in infrastructure. He cites the planned $5 million investment in Twiggs Circle as the largest example.

His other instances of private investment lured by the city’s infusion of cash are United House of Prayer’s community housing development organization’s development of about 30 apartments in the 1200 block of Wrightsboro Road – listed as a $4 million investment – and $2 million in construction financed by J&B Construction.

Excluding Twiggs Circle, the remaining investment represents $6 million in private investment to the city’s expense of $10.5 million in public funds, making the ratio of government to private dollars 1.75-to-1.

“We are yielding results. We are attracting outside investors,” Wheeler says in the document. Attempts to reach Wheeler on his cell phone Friday were unsuccessful. Russell did not return a call seeking comment.

Augusta commissioners have questioned Wheeler’s reports and the city’s oversight of the project. Mason called Wheeler’s written report incomplete.

With bond funds now spent, however, the project needs an additional $2.5 million to continue until 2015, according to Wheeler. The request goes back before commissioners Monday at a work session.

“Where’s the $41 million?” Commissioner Joe Jackson asked in a recent interview of the amount of private investment he expected to see at this point.

The money has been spent on consultants ($2.1 million); property acquisition ($3.2 million); contractors ($1.8 million); architects and engineers ($364,496); and demolition ($201,122.) An additional $517,520 went to construction of two pocket parks and sidewalks, while new home buyer assistance has amounted to $230,025.

Of 32 lots developed, according to Wheeler’s latest count, 14 new houses have sold, two are on the market, five are under construction or have construction pending, and eight are rented.

“We’re not supposed to be in the building home business anyway,” Williams said. “We’re supposed to give a jump-start and look for developers to come in and do this.”

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Sun, 12/04/2016 - 20:05

Pardon our mess