Noisette cleared for bond boostNorth Charleston would float millions in bonds to help finance construction By James Scott (Contact)
The Post and Courier
Wednesday, November 28, 2007
North Charleston would float millions in bonds to help finance construction North Charleston City Council voted 9-2 Tuesday to help finance up to $165 million in bonds aimed at helping the Noisette Co. with its plans to redevelop homes, offices and stores on the former Charleston Naval Base. Under the deal passed by the city's Finance Committee, which will go before City Council Thursday, the bonds would be repaid by future property taxes collected on the base. Tuesday's vote ended a three-hour meeting that was at times tense as council members peppered the city's bond experts and lawyers with concerns over the taxpayers' potential liability if Noisette falters. Mayor Keith Summey and Councilman Kurt Taylor, whose district includes Noisette, sought to ease the concerns of fellow city leaders, assuring them that North Charleston was adequately protected under its contract. Summey in particular rallied in support of Noisette, reminding council members that Noisette stepped up to help the city when no other developers would. He also said that if council members didn't support the deal, then it could kill development on the base. "It is not costing us any money. We have no liability. What in God's name is the question?" Summey asked of council members at one point. "If we're not willing to stand up and move this project forward, who will?" The Noisette dealNorth Charleston has created a special tax district for the former Charleston Naval Base aimed at capturing future increased property tax revenues as base properties develop. The Noisette Co. is asking North Charleston to agree to float up to $165 million in bonds in multiple phases, based on those future revenues, to repay Noisette's private lenders for infrastructure work it hopes to accomplish in the coming years. Those bonds will be issued before the tax district has generated that much money. The city plans to use some of those revenues to pay the debt on the bonds. To cover any shortfall, Noisette has agreed to pay a special tax. In the event of a default, the property would be sold at a tax sale and the bond holders repaid. City Council is expected to vote on it at its Thursday meeting. The meeting, which included a presentation by Noisette and consultants hired by the city, swayed some previously dissenting council members, including Councilwoman Phoebe Miller, who has often been critical of Noisette. "I am tired of looking at that place out there," Miller said after the meeting. "Let's get going on the project. Let's make it happen." Councilman Bob King and Steve Ayer, both Noisette critics, were the lone dissenters. In interviews, both Ayer and King said that Noisette needed to stand on its own and not ask taxpayers for help. Councilman Bobby Jameson, a critic who voted in favor of the deal, said his support was contingent on city lawyers strengthening some of the language in the contract before Thursday's vote. Under the deal, Noisette is expected to get private financing to begin redoing roads and drainage systems on the base. When that work is done, the city will float bonds in multiple phases to reimburse Noisette's lenders for the work. Those bonds will be backed by the future property tax revenues on the base and not by the city's general fund, meaning that if there is a default, the city won't have to raise taxes to pay the debt. The land instead would be sold at a tax sale. As part of the plan, the city will use future property tax earnings to help pay the debt on the bonds. To cover any shortfall, Noisette has agreed to pay an additional tax. Council's approval of the deal followed a presentation by Noisette CEO John Knott, who said his company has invested $45 million in the project's footprint over the years. Knott, who was accompanied by more than a dozen Noisette employees and a handful of supporting residents, including former Mayor John Bourne and state Rep. Seth Whipper, D-North Charleston, said the project's first phase calls for 2,100 homes and 1.8 million square feet of commercial space. Knott also said that the company already has deals under contract for 400 houses and 500,000 square feet of retail, commercial and hotel space lined up once the infrastructure is built. Art Titus, Noisette's vice president of operations, also told council members that the company has demolished two large warehouses and six smaller buildings. Nine more buildings are scheduled for the wrecking ball in the coming months, Titus said. Noisette officials also said that site preparation work is schedule to begin in March and infrastructure in May. Reach James Scott at 745-5855 or at jscott@postandcourier.com. |
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Comments
This article has 13 comment(s)
Posted by SCVOTER on November 28, 2007 at 7:17 a.m. (Suggest removal)
This is great. This project is going to turn this city around. This money isn't coming out of the city's pocket. It is coming from future tax revenues that will be created by the new development. The last comments were complaining about how Noisette needs to stand on its own feet...well why didn't the city create its own master plan....why didn't the city develop the base? Why did they sell it to an out of state company??? Because they didn't have the expertise to do it. Now, some on the council are complaining about having to finance roads and sewer?? Change cost money, and as a result people make money. We will all see increased property values when the ground is broken.
Posted by USC_Alumni on November 28, 2007 at 7:49 a.m. (Suggest removal)
Would you take out a loan to financially help a bankrupt contractor repair your house?
Didn't Noisette try to borrow money before behind the city's back using property it was given for redevelopment?
Do you think the city would also be willing to borrow money for me not based on my current earnings, but my future financial gains after I win the state lottery?
North Charleston's local government is by far one of the worst I've ever seen.
Posted by longview on November 28, 2007 at 9:13 a.m. (Suggest removal)
Alumni,
"Would you take out a loan to financially help a bankrupt contractor repair your house?" Is not what is happening here.
Would you take out a loan to help a bankrupt contractor repair HIS house, then, if he defaults, you get the proceeds of the sale....is much closer to the actual deal. Sounds like a good gamble to me considering the upside for the city if Noisette succeeds.
Get the ball rolling. Or, perhaps you would prefer the city to do nothing? Does that sound more progressive to you?
Posted by reasonable on November 28, 2007 at 9:29 a.m. (Suggest removal)
This is the same arrangement Charleston put in place for redevelopment of the neck. Cities pay for infrastructure, not developers. That is the way it always is. Of course this was not cited in the article because James Scott has some sort of grudge against North Charleston, and has essentially been getting paid to rehash the same stuff over and over again, always getting his quotes from the two negative ninnies.
Posted by scnative4ever on November 28, 2007 at 9:41 a.m. (Suggest removal)
Why is the city of NC still doing business with this guy? he's a crook. I think the entire nc city goverment needs to be investigated. why do you keep doing business with a guy that doesn't deliver, keeps filing bankruptcy, and is always making money some how? something isn't right. One of you hot shot reporters need to get on this.
Posted by crankyyankee on November 28, 2007 at 10:05 a.m. (Suggest removal)
Reasonable, we can understand the government having to provide infrastructure, we're not as stupid as you would like to perceive us. However when is the city of Charleston going to receive the first payment from the developers of the Omni downtown? They barrowed $25 million from the taxpayers many years ago and to this day have not repaid a cent! Our elected officals have no financial integrity and this deal is typical of past dealings!
Posted by USC_Alumni on November 28, 2007 at 10:33 a.m. (Suggest removal)
Longview:
What sounds more progressive to me is this:
Since it obvious North Charleston can't get the job done and appears to be in over their heads; seek advice and study from other SUCCESFUL local gov'ts that got handed property after a base closing and did well at redevelopment.
OR
Contract the entire redevelopment to private companies that are more capable, more knowledgeable, have more skills, and more abilities.
I don't buy the idea that you either make a bad decision with a bad company or let the property fester and rot which is what it's doing anyway.
Posted by Possibility on November 28, 2007 at 1:06 p.m. (Suggest removal)
If you investagate, and not just read James Scoot and Robert Behre,
you will find nothing crooked and no bankruptcy.
Investagate the City. They have not invested,
but Noisette has invested a lot. pretty smart.
Investagate the areas of the City, the taxes they bring in, and the cost of services they need. In this view, the Council has used the Base redevelopment to bring in more taxes from an improving south end of the City. This helps the whole city. Pretty smarrt.
Posted by lostinterestfast on November 28, 2007 at 5:19 p.m. (Suggest removal)
I'm all for cleaning up that place but NC can't even maintain their own infrastructure (mainly roads and storm drainage)! I'd much rather see another company/developer do the work correctly even if the taxpayers have to pay a small portion of it up front. It will be cheaper in the long run. But I too am concerned about what may happen in 2 or 3 years if Noisette bails out before everything is finished. How can we be sure taxpayers won't be left holding the bag?
I just hope those who end up buying homes over there like the sights, sounds and smells of living next to a busy port and in front of the 'hood.
Posted by poorboy on November 28, 2007 at 7:50 p.m. (Suggest removal)
sorry longview I would have to agree usc_alumni. why does the city of north chuck feel they need to be a parner with a developer anyway? not going good thus far that's for sure. you got a crappy waterfront park and the old shipyard looks like an older shipyard. this project could have been built out by now. how long has the shipyard been closed? so whats next on their agenda concerning this project. i certainly have no idea. something isn't right here and you know all you have to do is follow the money!
Posted by burton on November 28, 2007 at 7:52 p.m. (Suggest removal)
"Summey in particular rallied in support of Noisette, reminding council members that Noisette stepped up to help the city when no other developers would."
Mmmmm...I wonder why no other developers stepped up?
Posted by USC_Alumni on November 28, 2007 at 10:10 p.m. (Suggest removal)
Here are good examples, and if anyone in North Charleston's gov't read this and have influence please study up and consider.
http://pacificnwpub.com/viewnews.pl?id=2...
Posted by longview on November 29, 2007 at 9:36 a.m. (Suggest removal)
I see nothing that differs from the Noisette guys' approach...sorry for the long post but this is cut and pasted from the end of the article you linked. Good discussion. Hope to keep it up. One other question: No one would argue that a successful development of the Old Navy Yard would be a bad thing for the area, right?
article:
Developers and builders should also be prepared to work closely with numerous public and private entities when redeveloping bases. Coalescing political and public support for base reuse, especially in urban or urbanizing areas, is also a challenge. It is critical to gain public consensus for reuse projects, since there may be opposition from slow-growth factions and special interest groups may have other plans for the base. (Orange County endured a nasty international airport vs. great park battle over the use of El Toro Marine Air Station before the park’s supporters persevered.)
Everyone doesn’t have to agree on the specifics, but community support for the general direction of a plan is essential for successful implementation. Community members often have great ideas about reuse alternatives. Several tactical outreach tools (focus groups, newsletters, speaking engagements, Web sites and public meetings) should be a part of the process. It is also important to meet with both supporters and opponents one-on-one; conduct neighborhood meetings; and work closely with the local media.
Base reuse developers and builders need to move carefully and cautiously, fully understanding the lay of the land before getting too deeply involved in the process. There can be a plethora of challenges as they address unfamiliar issues and contend with federal, state and local agencies, not to mention military bureaucracies. But in the final analysis, proper preparation, solid planning, substantive community outreach and rigorous teamwork can make all the difference. With a thoughtful, strategic approach, developers can transform decommissioned military bases into successful mixed-use neighborhoods that are truly an economic boon to their surrounding communities.