ANNEXATION STRATEGIES

City covets county land

Columbia officials want to push boundaries southeast, northeast

By GINA SMITH

gnsmith@thestate.com

As Columbia looks to boost its property tax coffers, its best bet is to annex Richland County’s fastest-growing commercial corridors and high-end neighborhoods.

The targets: Two Notch Road in Northeast Richland, the Farrow Road/S.C. 277 area, and the Garners Ferry Road corridor — acquisitions that are certain to rankle some residents and further strain already tense relations with Richland County.

“The city has to grow or it will stagnate,” said Columbia Mayor Bob Coble. “The southeast and the northeast are our best possibilities.”

The push to grow in those directions is under way:

• Earlier this month, the city annexed about 1,650 acres bounded by I-20, North Main Street, Pisgah Church Road and Farrow Road, upsetting the County Council member who represents the area. While the tax-exempt acreage won’t bring in new revenue, it pushes the city border closer to the lucrative commercial area along Farrow Road and near Midlands Tech’s Northeast Campus, where a technology park is planned.

• The city has annexed more than 50 acres along Earth Road, a connector to the lucrative Clemson Road corridor in Northeast Richland, and another 35 acres adjacent to the Woodcreek Farms neighborhood.

• The southeast, including Garners Ferry Road. The city’s tendrils began to stretch southward when it annexed the 200 acres of Burnside farm, a prime piece of real estate that will become a mixed-use development and home to as many as 3,000 people. It’s two miles from I-77.

“We need to move aggressively, trying to bring some of this land into the city,” said Steve Gantt, the city’s senior assistant manager.

NOT GOOD ENOUGH

About 85 percent of the city’s growth results from property owners asking the city to annex their land. In 2005, that brought in nearly 400 acres of Richland County land, broadening the city to more than 84,000 acres.

2006 will be an even larger annexation year. The city this year already has annexed at least four times the amount of land added in 2005.

But city leaders say it has not been enough. The gap keeps widening between the cost of providing services and the amount of property taxes taken in to cover the costs.

It costs the city more than $137,000 to lay one mile of 8-inch water line in a neighborhood, said John Dooley, the city’s director of utilities and engineering. That’s $25,000 to $30,000 more than it cost 10 years ago.

It takes the city about five years to make that $137,000 back in fees, he said.

And there are the added costs to build fire stations and police substations, and to provide garbage pickup and other services to newly annexed residents.

“As gas prices continue to go up, we’re impacted even more,” said Missy Caughman, the city’s budget director.

As costs have risen, the city’s tax collections have remained at about $29 million for five years and relatively flat since 1989, when the city annexed Columbiana Centre mall on Harbison Boulevard.

The annexation of the mall and nearby commercial property was the city’s biggest cash boon in recent history, adding millions to annual tax revenue.

While the city has brought in new land each year, more than 50 percent of properties on the tax rolls — hospitals, military installations, local, state and federal government buildings and universities — are exempt from city taxes.

More such properties are going up as USC builds its new research campus, which will cover a projected 500 acres.

“If we want to keep providing services to residents, we need to move aggressively to bring in property that will pay taxes,” Gantt said.

A development on the level of the Village at Sandhill in the Northeast could take the city to the next level.

City officials say they don’t have a strategy to take in the 300-acre development at Clemson and Two Notch roads. An annexation presentation city staffers are slated to give council lists Clemson and Two Notch as discussion points.

It’s unclear if the city is willing to make such a contentious move, further straining relations with Richland County. In recent months, talks have stalled between the two on paying for improvements to The Township auditorium, on housing Columbia’s inmates at the county jail, and on creating a joint office for planning services.

In Irmo, some residents still resent the city’s annexation of Columbiana Centre.

“The city just wants to cherry-pick,” said Joe McEachern, the Richland County Council member whose district includes the 1,650 acres off Farrow Road the city just annexed.

“They want to get the properties that won’t cost them to provide those services. How about a little consideration for the county?”

City officials say the only other way to raise money to cover services is to boost taxes, as it did earlier this year. It was Columbia’s first tax increase outside of a reassessment year since 1992.

The city in October will get some help in convincing homeowners to join the city.

The county’s local-option sales tax, which was passed two years ago, and a new statewide sales tax that goes into effect in October will combine to provide more property tax relief. And that will make it cost about the same, tax-wise, to live in the city as it does in the county.

“As that (sales tax) pot grows — and it’s going to go up substantially next year — you’ll see that it will become as cheap or even cheaper to live in the city than in the unincorporated areas,” said Howard Duvall, executive director of the Municipal Association of South Carolina, which represents the 269 incorporated cities and towns in the state.

“The city will have to convince the people on the urban fringe that it will be less cost to them or that the benefits outweigh the cost to be in the city.”

Columbia officials plan to use that to their advantage.

“That’s one of our strategies,” Gantt said. “Getting that word out to people.”

NO EASY SOLUTION

Columbia’s gobbling up more land poses new financial, safety and political problems:

• Annexations stretch the budgets of police and fire services and can increase the amount of time it takes for them to respond to emergencies.

• As more outlying areas are annexed, it increases the likelihood that insurance rates for all city property owners will go up. That’s because all of the city shares one property insurance rating.

“When we take in and annex these far-flung regions, we jeopardize the (insurance) rates for all of the city’s homeowners,” said City Councilman Kirkman Finlay III, who represents Woodcreek Farms, where residents have bristled at paying high taxes for what they call substandard city services.

“Our only alternative is to build new fire stations. And building, maintaining and staffing a fire station is incredibly expensive.”

The city will pay about $600,000 this fiscal year just to staff its newest fire and police substation, to serve Woodcreek and nearby areas.

Based on the proximity of fire hydrants and fire stations, the insurance rating for most of the city is a 2, on a scale of 1 to 10, with 1 being the best rating. Much of the county has a 6 rating.

“The difference between a 6 and a 2 on a $100,000 home might be a couple of hundred dollars or more,” Columbia Fire Chief Bradley Anderson said.

That means the city must walk a fine line between taking in profitable areas and overextending services.

Up to now, the city’s rule of thumb has been to take in commercial and industrial properties as well as high-end homes — the only categories where the city makes money through property taxes, water service and licenses.

On occasion, the city takes in land that does not make money. Reasons include:

• To make the city limits contiguous to a desirable piece of property. For example, the city might annex a church or neighborhood to get next to a large industrial park. Under state law, the city can annex any property as long as the desired land is contiguous to the city’s borders and the city already provides water to the site. For some time, the city has worked to get near lucrative commercial property, including The State newspaper.

• To eliminate “doughnut holes” — portions of county land that are totally surrounded by the city. Examples include the Old Woodlands neighborhood off Garners Ferry Road, only part of which is in the city.

• To grow the population base. Columbia leaders like to keep the population above 100,000, which ensures federal funding for transportation and community improvements, said Chip Land, the city’s annexation director. Also, many businesses and industries only want to locate in cities of 100,000 residents or more.

ESTABLISHED NEIGHBORHOODS SAFE

More aggressive annexations by the city won’t affect residents in county neighborhoods that already are built out.

“It’s easier for a city to annex land before (it’s developed) versus trying to do it after it’s developed,” Duvall said. “That’s why many cities don’t even try it.”

In those cases, state law requires that 75 percent of the people who own the property must sign a petition agreeing to be annexed. And the same 75 percent of people also must own 75 percent of the total amount of land to be annexed.

“It’s a much higher threshold,” Duvall said.

Not to mention that annexation attempts can upset resistant residents, their County Council representatives and state lawmakers.

“If you try to annex an existing neighborhood against their will, County Council members have to react,” Coble said. “Legislators have to react. It’s often a fight, and it doesn’t work.

“We’re not interested in doing that.”

Reach Smith at (803) 771-8462.