Council members voted 5-1 to approve Perlis Nease Development’s request to reduce their water and sewer tap fees for the Canton Exchange shopping center planned on Highway 20 across the street from Canton Marketplace. The developer agreed to annex the property, which is in unincorporated Cherokee County, within the city upon approval of the reduced fees. Councilman Bill Grant voted against the motion.
Perlis Nease Development originally requested to reduce the fees by 75 percent, however, council voted to approve a 50 percent discount. A final development agreement will need to be reached clarifying timelines for annexation when an agreement is reached, according to a letter from the developer to the city.
City Manager Billy Peppers advised the council at the meeting not to agree to a reduction larger than 50 percent.
“When the property taxes fade in, that would put us right about five years to at least recoup what we’re losing on the tap fee side,” he said.
Mayor Gene Hobgood and Grant both raised concerns about setting a precedent for future developments in the area wanting to annex into the city. Grant said a decision like this could end up making the city lose more tap and sewer fees going forward.
“We all know we’re going to need major investments in tap fees and water and sewer and so my concern is we kind of keep discounting, and discounting and discounting,” he said. “To me, there’s still a difference. I mean 75, there’s still a huge difference, 50 is still to me a huge difference. I mean, I would just rather be consistent with what we’re doing at Riverstone, especially anticipating all the new developments that go beyond that development all the way out to Scott Road.”
The shopping complex on Riverstone Parkway, Grant argued, only received a 30 percent cut in tap fees and was a good example of how the city should consider the Canton Exchange shopping center.
Peppers said one difference between the two developments was Riverstone was already in the city limits and the developers at Canton Exchange are making payments to the Canton Marketplace developers for infrastructure that was previously built on Highway 20.
Grant asked if the city would receive inspection fees or if they would be given to the county.
Peppers mentioned the city might lose out on exterior permit fees, but some of the interior buildout fees might go to the city.
“It’s just depends on the timing of the annexation and I think it’s something you could discuss as part of the reduction in tap fees, is what that expectation for annexation would be,” he said.
Prior to the vote, Peppers said the developer might not annex into the city if fees weren’t reduced at all and the city would instead serve them as a water and sewer customer.
Hobgood said he didn’t want council members to forget that while the city might recoup some monies from property tax on the development, the money would be used for different purposes than the funds collected from the tap fees.
“That’s a different bucket of money. That property tax doesn’t go to build those wastewater treatment plants or run those lines,” he said. “It goes for other things. Police protection and so forth. And what we’re giving up is water and sewer money, so I think we need to amend that, I think,” he said.
Though the city would be happy to have Canton Exchange incorporated in their limits, Hobgood said it would be easier to be consistent with the 30 percent discount granted to the Riverstone shopping complex.
The city would receive property taxes, business license fees and its regular potion of the special-purpose local-option sales tax from the project if council approved the request, Peppers said.
Councilman John Rust said the city would receive no taxes if the developer turned down the offer council approved and they could at least start collecting revenues in five years, instead of never.
“If you look at it as a 20 or 30 years project, you’re going to get a lot of money vs. potentially zero,” he said. “And we’re going to still have a lot of the problems because this is right across the street from Canton Marketplace. We have an opportunity here which we may never get again to close the loop between with the county running right down to the middle of (Highway) 20, to close the loop on both sides of 20 with city property. And frankly, I think to go back in with only 30 (percent) is a mistake. I think they might not go for that.”
Though annexation would allow the city to serve Canton Exchange and Canton Marketplace from a public safety standpoint, Grant said the neighboring RaceTrac and AT&T properties were still in unincorporated Cherokee County, so it would not “close the loop.”
“We still have that gap,” he said.
Councilwoman Sandy McGrew asked Peppers if anyone from the city had approached RaceTrac and AT&T to annex within the city. Peppers said he had not, but did mention it was harder to convince an already developed property to annex.
“I think it’s in the city’s interest to try to pull in that entire block to try to really square up those city limits and you know if you’ve got something that’s already developed, it’s a lot harder to get them to annex in,” he said. “They’re going to have to have some kind of incentive to make that work. Working with something that’s not completely developed, it’s not the best scenario, because of course you’d like the building permit fees and the impact fees and things like that, but at least it gets you ahead of the game to some extent on bringing them in.”