Ten years ago the town of Summerville purchased a tract of land on Cedar Street, near West Richardson Avenue. For 10 years that property has been vacant and deteriorating, according to Mayor Bill Collins.
“I think it’s probably hurting property values around it,” he said. “We were getting nothing out of it.”
Now something is being done with that property; a new $30 million economic development project will bring Summerville a hotel, conference center, condos and a parking garage. The town approved the project July 9, when council authorized the mayor to finalize negotiations and execute a public-private partnership agreement between the town of Summerville, the Summerville Redevelopment Corporation and Applegate & Co. of North Charleston.
The Summerville Redevelopment Corporation is a commission comprised of the mayor and council members. It is a tool used to help with redevelopment projects, said Lisa Wallace, director of administrative services.
The town is paying for the events facility and parking garage with proceeds from a 20-year revenue bond with payments being made from hospitality tax funds. The hotel and condos will be paid for by the developer.
Collins said the town will own the conference center and the parking garage being built on town property. It will take 18 months to two years to get the whole project completed.
“Everybody I’ve heard from has been very positive,” he said.
Hospitality taxes are the 2 percent tax the town collects on prepared foods and beverages, and the tax is designed to promote tourism in Summerville — something that Collins said the hotel, events center and garage will help generate.
For the next 20 years the town will be paying $600,000 to pay off the construction of the parking garage and events center. Collins said the town receives $2.5 million a year in hospitality taxes, so about 25 percent of the taxes will be spent on the town’s share of construction.
“We still have money left to do projects with and we’ll be doing other things,” Collins said.
The developer is buying additional land where the hotel and condos are being installed, and the town will receive taxes from that. The town will also receive business licenses from the hotel, restaurant and parking garage (because the developer is going to buy 55 parking spaces inside the garage for the condo residents).
“We’re probably going to end up getting almost $600,000 a year in revenue, equal to what we’re going to be paying out in hospitality taxes for our share of the construction,” Collins said.
Collins added over the past year Summerville has acquired a number of restaurants that help generate revenue — places like Smashburger, Newk’s Eatery, Mellow Mushroom and Carolina Ale House. Collins anticipates that with more businesses the hospitality tax will continue to grow, and the percentage of what is being used to fund the hotel construction project will shrink.
“We put four elements together: the parking garage, hotel, condo and events facility,” Collins said. “Together it makes for a viable project that will generate all this revenue and answers the needs that people have said they want addressed in Summerville — places to live in Summerville, a hotel downtown, more parking and places for events downtown.”