A new era of development: Rock Hill's Brownfield Renovation Project.

• Author: Vehaun, David
• Position: Cover story

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Along the banks of the Catawba River, a new era of commerce is in the works. A joint effort between the City of Rock Hill, South Carolina, and a development partner will provide a unique development opportunity. This his partnership grew from a vision of a group of entrepreneurs who saw vast potential beyond the obstacle of a substantial brownfield site. The city's development partner--which specializes in remediating and redeveloping brownfield sites, but also provides environmental services and real estate development--purchased the 1,008-acre property in October 2005 from a major industrial firm. At that time, the site was occupied by what was once the largest cellulose acetate manufacturing facility in the United States. The plant began operations in 1948 and, at its peak, employed 2,500 people. The facility closed in 2005 after 57 years of continuous operation.

ENVIRONMENTAL ISSUES

In addition to the 2.5 million square foot manufacturing facility, there were significant problems with the site because of environmental issues caused by operations at the plant. As a result, cleanup of the site fell under regulations of the U.S. Environmental Protection Agency's Resource Conservation and Recovery Act (RCRA). RCRA was enacted for the primary purpose of creating a program to regulate, "from cradle to grave," the storage, transportation, treatment, and disposal of all types of hazardous wastes from all significant sources. The RCRA covers sites that are one step from receiving a Superfund designation. The industrial firm that originally ran the site estimated that the cleanup would cost approximately $45 million. In spite of these obstacles, the city's development partner purchased the property and provided indemnification to the manufacturing firm for all known and unknown environmental liabilities, on and off the site. The development partner also self-insured the site.

Under the RCRA, a thorough environmental investigation of the property was required before any development could begin. Through a partnership with the South Carolina Department of Environmental Control, Rock Hill's development partner was able to complete the investigation and cleanup process efficiently. Demolition and asbestos abatement of the facility coincided with the environmental cleanup and started in October 2005. All site work was substantially completed 18 months later, in December 2007.

The site currently operates under a RCRA Part B closure permit. The part B permit includes the conditions setting forth the development partner's duty to comply with the permit terms and the effect of such compliance, all reporting and record-keeping requirements, and any conditions regarding the duration of the permit and its renewal. The permit also provides an overview of the corrective action process, including a general description of each phase, and sets forth the specific conditions governing corrective action obligations.

Because of agreements made regarding land use restrictions, operations, and maintenance, Rock Hill's development partner will maintain the ability to monitor and perform maintenance on any remedial systems to ensure the ongoing protection of human health and the environment well into the future.

DEVELOPING A VISION

Once demolition and abatement was underway, the developer began intensive negotiations with city officials regarding future development on the site. Since the site was located outside the city limits, the process resulted in annexing the property and rezoning the land to suit the needs of the developer. The developer was motivated to agree to annexation since this would open the opportunity for a tax increment financing (TIF) arrangement with the city (something the county was not familiar with, but the city had extensive experience with TIFs).

The developer hosted an intensive, two-day multidisciplinary design workshop in August 2006 to begin developing a plan for development on the site, facilitating an open discussion among project stakeholders. A team of design experts met with members of the City of Rock Hill, York County, representatives of the business community, other developers, and members of the education community, gathering information on issues related to the development. The workshop team then offered solutions that resulted in a clear, detailed, realistic vision for future development.

The results centered on the need for a mixed-use development that would include residential, commercial, and light industrial elements (see Exhibit 1). The vision included a river village concept, distinguished by more than three miles of waterfront, intended to produce a development plan like no other in the Charlotte metropolitan area. The ultimate development proposal, called Riverwalk, would create a mixed-use, pedestrian-friendly community that emphasized employment, connectivity, recreation, and open space uses. The plan would incorporate industrial, commercial, and a diversity of residential products, all connected by greenway trails and parks to link the Catawba River to the various neighborhoods and public centers within the property. The project would also include the East Coast's only oval bicycle racing track, a BMX (bicycle motocross) course, and other sports tourism-related attractions. Upon completion, the project is expected to produce $600 million in private investment, increase property taxes by $4 million annually, and generate 4,000 new jobs for Rock Hill. The project is also expected to act as a catalyst for additional development in the surrounding area that will ultimately produce additional tax revenues and jobs.

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CREATING THE FRAMEWORK

The city entered into a memorandum of understanding in March 2007 with its development partner to provide a framework under which both parties agreed to a set of goals before a final agreement. The obvious goal was to bring about a high-quality development on a very unusual and important site for the Rock Hill area and to take advantage of the unique opportunities the site affords, with three miles of frontage on the Catawba River and a large area of undisturbed woodlands.

The memorandum of understanding stated that the development would ultimately be annexed into the City of Rock Hill and would include a mixed-use development of commercial, residential, industrial and recreational components. The memorandum of understanding also stated that both the developer and the city intended to proceed with the development under a public-private partnership to ensure the public financial assistance required for the public infrastructure--including roadway improvements, trails, utilities, storm water, and recreational facilities. Both parties also agreed to create a land use plan that would provide design and planning flexibility based on the size, complexity, and projected absorption rates (the ability of the area to absorb or sell all of the real estate for sale in a given amount of time) associated with the project. This land use plan would minimize the cost of public services, be environmentally sensitive, seek efficient design of roadways and trails, and preserve and dedicate land for adequate public facilities and rights of way. Most importantly, the memorandum of understanding obligated the city and the developer to enter into a land development agreement under the laws of the State of South Carolina and the City of Rock Hill. The city had never used this new development tool, and the Riverwalk development provided an excellent opportunity to test the viability of this latest addition to the city's zoning code.

The unique nature of the land development agreement is that it combines zoning and financial commitments into a single agreement between the developer and the City of Rock Hill. The land development agreement provides the developer with greater certainty in the development process and creates a mechanism to tie development to the provision of adequate public facilities. It also encourages more efficient implementation of comprehensive planning through large or complex projects such as the Riverwalk project. In general, the land development agreement parallels a rezoning application for the proposed project and gives the city and developer the maximum latitude for creative and flexible design and the ability to condition development on the provision of specific improvements or other phasing requirements. In addition, the land development agreement provides a mechanism to address incentives that might be agreed to due to a project's economic development impacts. This tool ensures that the developer only receives certain development concessions if the quality of the development reaches the city's expectations.

The completion of the land development agreement requires two steps. The zoning component is accomplished through action of the planning commission, and the financing component is accomplished through a financing agreement. Both documents must be considered and approved by the city council.

GAP FINANCING MODEL

At about the same time the memorandum of understanding was worked out, the city and the developer began negotiations regarding the possibility of public participation in financing the project. The most commonly discussed method of public...