Gaillard Funding Merits Little Public Discussion

June 29, 2010

Investigative Reports

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The NerveWe were looking for some action during the June 16 Charleston City Council meeting regarding the proposed $142 million Gaillard Center project.

Certainly, there were many citizens who spoke at the public hearing. Most were in favor, but some were concerned about the cost and the need for spending in other areas.

But when it came for discussion on council, there was little.

Considering the magnitude of the project and the proposed funding, we expected spirited debate. There was none and the project and the proposed funding were endorsed unanimously by council members with some minor amendments. At least that is how it seemed.

We spoke to a council member later in the evening and expressed our surprise at the easy passage and the lack of debate. We were told that the latter did not reflect indifference by the council.

There had been considerable discussion among council members and Mayor Joe Riley in recent weeks and concerns had been expressed about financing.

Although the project may have been endorsed by the city council, approval had only been given for financing of the architect fees. They would be paid from the $20 million of the “anonymous” donor.

Before the council approved the costly construction, which would rely on other funds, the financing would have to be in place.

The inference was that the council would not move ahead with the project if there was a chance that the city of Charleston would be left to take up any financing shortfall.

To recapitulate, the city is proposing to renovate the Gaillard Auditorium and to also construct offices at the site for its own use. The cost is estimated at $142 million.

The mayor said that half the cost, $71 million, would come from private donations, $20 million of which has already been received.

The balance would come from a general obligation bond ($23 million), extension of the King Street Gateway Tax Increment Financing District ($30 million) and from other sources such as accommodation taxes and hospitality fees ($18 million).

Riley said during the session that the county had signed off on approving the extension of the TIF district for its share. The Charleston County School Board had agreed to allow the Gaillard to become part of the TIF but agreement still had to be reached on funding.

Understandably, the mayor spoke glowingly of the project – the need to renovate the Gaillard, to have a concert hall/auditorium commensurate with the city’s stature, to encourage the arts and to save on the city’s rent expense.

Riley said that the Gaillard was losing about $300,000 a year and the city was paying $750,000 a year in rents to house staff.

The new Gaillard would save the City over a $1 million a year and that the economic impact was estimated at $62 million a year. Riley also said that the fall in construction costs in recent years made the timing propitious. He expected construction to begin in August 2012, and completion in 2014.

Measured by the comments of the speakers, the city’s business community strongly endorsed the project. Speakers representing King Street Merchants, the hotel industry, the Convention and Visitors Bureau, and neighborhood associations all saw considerable economic benefit.

Vangie Rainsford, president of the Garden District which abuts the Gaillard, spoke in favor.

Warwick Jones, spokesman for the Historic Ansonborough Neighborhood Association, reported that its members had reacted favorably to the proposed design but there was concern about the financing. What happened if the $71 million could not be raised from private donors?

Some council members were also concerned about a cost overrun and sought assurance from the mayor and staff that the cost estimate was reasonable. Riley said that a comparison with what happened with the Aquarium, as made by a council member, was unfair.

The latter was a grassroots project and ran into environmental problems. The Gaillard was a renovation largely, and the cost could be better measured. He also noted that construction cost estimates by staff in recent years had been very accurate.

Marc Knapp is a contractor specializing in heavy underground utilities and the owner of Charleston Site Utilities.