Wednesday, April 14, 2021

The McGinness project - What's going on? (Part 2)

Borough manager Marks Stivers wants Columbia Borough to buy the 58-acre McGinness property at 1020 Manor Street and develop for business and recreational use. At last week's council work session, he laid out the purported financial benefits that the development will bring to the borough. What he didn't dig into was the upfront cost to taxpayers. 

Here are a few figures: The purchase price is expected to be $1,495,000.  Add to that, $144,000 for environmental tests currently underway. If everything checks out and the purchase goes through, the borough will still need to construct roads, run utilities, and carry out other projects related to site development - the costs of which are unknown at this point but could easily run into hundreds of thousands. (By the way, if test results are unsatisfactory, the $144,000 will have been wasted.) 

And the return on our investment? At this point: a feeling that businesses will flock there to set up shop, build structures, offer jobs, and thereby help stabilize our tax base. After the land is developed, borough officials hope to sell the property.

Borough taxpayers will be responsible for paying school taxes on the land, which might increase as structures are built.  [As a reference, the former No. 1 fire company on Front Street costs the borough about $27,000 a year in school taxes. The newly renovated market house could potentially cost tens of thousands in school taxes when the building is reassessed.]

Where's the money coming from? According to Stivers, the borough will apply proceeds from the sale of its sewer treatment plant towards this purchase. [NOTE: LASA paid $8.6 million for the conveyance system in 2015. The borough still owns the plant. LASA also assumed $12 million of the borough's debt, as part of the sales agreement.] Also according to Stivers, there is a line item in the state budget of $3 million dollars in RACP funds earmarked for the borough. [RACP stands for "Redevelopment Assistance Capital Program," and is a state grant requiring dollar-for-dollar matching funds.] 

Stivers said the $1.75 RACP grant the borough was awarded [in 2019] came from the earmarked funds. Over $1 million of this grant was spent on market house renovation, and the remainder will be used for parking projects. 

Stivers claims there is an additional $1.75 million in state money earmarked for the borough. If that money is indeed available, there's still no guarantee the state will approve it for this project, but if awarded, the grant will still require matching funds [1:1] from the borough. If all "goes well" and the borough acquires and develops the property, it hopes to first lease plots and then sell the entire development in 5 years.

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