HomeMy WebLinkAboutCalled Commission Meeting October 28, 2010
CALLED MEETING COMMISSION CHAMBER
October 28, 2010
Augusta Richmond County Commission convened at 11:00 a.m., Thursday, October 28,
2010, the Honorable Deke Copenhaver, Mayor, presiding.
PRESENT: Hons. Lockett, Grantham, Hatney, Aitken, Johnson, Jackson, Bowles and
Brigham, members of Augusta Richmond County Commission.
ABSENT: Hons. Mason and Smith, members of Augusta Richmond County
Commission.
Mayor Copenhaver called the meeting to order.
The invocation was given by Rev. J. R. Hatney.
The Pledge of Allegiance to the flag of the United States of America was recited.
Mr. Mayor: Thank you and I’m going to turn it over to the Administrator.
Mr. Russell: Mr. Mayor and members of the Commission, thank you for calling a special
meeting today. I think it’s appropriate that it is a special meeting in the fact that that we’ve been
working on this opportunity for the last several months, actually a little bit longer than that, but
the details have come to fruition over the last several months, and I’m pretty excited to be able to
be up here today and talk about this. Before we get started, I’d like to introduce several of the
key players as we go down the line and they’re here with us because of not only their
commitment to the project but their excitement about the opportunities here in Augusta and the
ability that we have to continue to weather the storm as best we can compared to some other
locations. And I think that’s not only a strong point for our city but it’s based upon the decisions
you’ve made as a commission as we continue to move forward and we continue to be on the
cutting edge of doing things in the right way to make our citizens better off as we move forward.
Gar Herring from the Herring Group in Dallas, Texas, Matt Gallo from the Herring Group in
Dallas, Texas, Frank Mullins from Collette and Associates here in Augusta and Charlotte and
twelve other places if I remember correctly, Mike Robbe from Collette and Associates and I
guess our biggest guest today is Joe Montesano who is with Costco. He is in charge of the east
coast real estate as a consultant that they’ve hired. They do not have their own internal real
estate people but he’s been with them for a right good while and is actually in charge of their east
coast real estate program which is significant because that’s why we’re here today is to probably
talk about one of the best unkept secrets that’s been going on for the last several days as we deal
with what we’ve got here. And I think part of the reason that it hasn’t been a secret is because of
the fact that it’s good for Augusta and it’s good for the people that are involved here. I think it’s
good for both Costco as a company and even bigger than that is the development at Riverwatch
that’s been on the table for a while, that 118 acres of which 18 has been donated to us as a part of
our Canal system park but in addition to that another 100 acres there at the intersection of one of
the biggest two roads in our community that’s ripe for development as the economy improves
and we continue to move forward. As you talk about development, though, you talk about the
first step and I think in this particular location the first step is going to be Costco. We have
worked with them and the developer over the past several weeks and up late into the night and
early in the morning as we put together a package that I’m going to share with you right now that
we think is a good example of a public/private partnership that brings not only retail to our
community in one store but opens the gates for development of that entire operation as we move
forward. We’re not talking about a deal for one particular location, we’re talking about an
opportunity to develop a hundred acres in one of the best locations between Atlanta and
Columbia and Atlanta and Savannah and that’s what the big picture is that we’re talking about.
To do that we had to find a store that was suitable to our economy, suitable to the things that we
need to get done in Augusta and a store of national presence because I think that was important
to us. And I think in Costco we found just that kind of store. For those of you that are not
familiar with Costco it is a major retailer on the east coast. Back in my previous life back in
Richmond Costco played a major marketplace in the way that people of Richmond did business.
Not only does it talk to individuals about a lower cost option on how to purchase local products,
but they specialize in helping small businesses grow, helping small businesses improve. So
we’re not only taking care of our citizens but we’re taking care of our small businesses as they
continue to grow, they continue to look forward to that. The first question that’s asked is, “What
about Sam’s?” And Sam’s has a little bit different market, I believe, and we’ve talked at some
length about that and the draw that Sam’s has versus the draw that Costco has. If you look at
what we’re doing, Costco has a store in Atlanta and there’s nothing even close beyond that.
We’re looking at drawing lots of dollars out of South Carolina and lots of dollars from the east
and the south as we move forward. To get Costco here it requires some effort on our part and
that’s the public/private partnership that we talk about because in today’s market, in today’s
world stores don’t come knock on your door. They want to come, they want to come, but they
want to come with some realization that the government and the people there are cognizant of
what’s going on and having some input in that. A lot of times they come totally with their hands
out and we’ve had conversations about several of those people that wanted us to do everything
and they not do anything. They want us to put up money up front and then benefit from that as
we go down the line. As you know in the conservative way that I tend to do business, that’s not
a conversation I like to have with people. They benefit from being here and we need to benefit
from them being here. There is mutual ground that gets us there and that mutual ground is what I
think we’ve been able to do here with Costco and with the Herring Group in that particular
development. As you know as part of the TAD, so there will be some increment gain there
through part of the TAD, we probably will be in the next few weeks modifying that a little bit to
separate this out as a smaller portion of that, but that’s part of the process that we’re doing to
take it out of the multi, the mega TAD issue and put it down into a smaller, bite size portion of
that. In addition to that there is a $10 million dollar spread that’s needed to make this project a
success. A lot of places will come and say give us $10 million dollars and we’ll build a store at
your location. I think Costco would have said that up front if they’d like to but we were able to
work a little bit better deal for them and for us too. And that is very simple. We are going to
invest future dollars in a current product and that current product is those dollars coming from
sales tax. It’s generated not by everybody but specifically by Costco in this project, and in the
out parcels in the project as we move forward. In the end, though, it will be paid back over 23 to
25 years depending on the payback on the sales tax that they generate. Fairly unique, but fairly
reasonable. Because there is some potential slippage in that, we didn’t give them 100% of the
sales tax for the Costco. We negotiated a 65/35 ratio for the Costco itself. 65% of the sales tax
that Costco generates will be put back into paying off that loan. 35% will come to us to be used
as we normally use our sales tax. In addition to that, there are phases out there in the
development which you can see on this map down here. Those phases are divided into Phase 1
and Phase 2. Phase 1 we are looking at a fairly quick, we hope, development of five out parcels.
Those developments will be retail and restaurants probably is what we’re looking at. It’s up to
the developer to push those projects forward and they will be doing so using Costco as a way to
get those other stores there. In those areas we’ve negotiated a 75 to the special fund and 25 to us
so we would get 25% of the sales tax created in that particular area. Phase 2 are the two larger
sections beside Costco and in those areas we will get 100% of the sales tax as we move forward
in those areas. The property taxes are part of the TAD that we talked about. We, being our
financial staff, think that this is a very good deal for Augusta. It’s an opportunity to bring in a
major retailer, it’s an opportunity to bring in not only a major retailer but a major provider of
jobs. They anticipate 150 to 200 jobs over the next several years as they grow to maturity and
they are good jobs for part and full-time people with a mature cashier being there several years
making about $48,000 a year. In addition to that they not only pay well but they even provide
benefits to the part-time people which is pretty neat for this economy as we go forward. They
are not only a people company externally but a people company internally and they’re the kind
of members that our community would like to have and I’m very happy to get them here. To do
so it’s very simple at this moment. We need to pass the attached resolution which will allow us
to move forward with the documents necessary to finalize this deal. You’ll have another bite at
the apple with specific documents to be brought back before you which will continue the process
and allow us to move forward. Do you have any questions and if not, it would be appropriate to
move forward with the resolution.
Mr. Mayor: I’m just going to make a quick comment and then I’ll recognize
Commissioner Hatney and Commissioner Grantham. I’ve shared with people that in economic
development it is so important that we focus on quality over quantity. Costco is really the type
of employer in my opinion that we want to have here providing good jobs, good pay, benefits
packages and Fred, as you’ve made mention of, even to part-time employees, that’s the type of
employer we want here. You also made the point about helping small businesses. I think 40%
of your business is business to business selling to small businesses to help keep their costs down.
Those goods and services are sold back within the community and that money stays within the
local economy so I feel like this is a good deal, a win/win situation for the city. So with that,
Commissioner Grantham and Commissioner Hatney.
Mr. Grantham: Thank you very much, Mr. Mayor. I want to follow along with Fred’s
comments in regards to the time frame that was involved in this. I had the pleasure of being a
part of that team and it was really good to be able to sit down and discuss this with these
gentlemen and to talk about this particular project. As all of you know, we had other projects
presented to us and this just seemed to be the real star in the sky that we needed here in Augusta
and with the number of people that they’re going to employ and the type of jobs that they
provide for these people and the money that they’ll be paying them in salaries is going to be
outstanding for our community. We just anticipate this being the leader for what we see in the
future for that particular area and we’re just delighted to see that you’re coming and I thank all of
you for letting me be a part of that and for being able to discuss that with you. Thank you very
I’m going to put this in the form of a motion
much and and then let Rev. Hatney have his
discussion.
Mr. Jackson: Second.
Mr. Mayor: Rev. Hatney.
Rev. Hatney: Two questions, Mr. Administrator. I think you said there will be
approximately 150 jobs, somewhere in that area.
Mr. Russell: Yes, sir.
Rev. Hatney: Are those jobs for Richmond County folk or are they bringing a hundred
folk with them?
Mr. Russell: It’s my understanding that they would attempt to bring the people from the
county from our location here to do that and I think that’s their major focus. Obviously, some
management people might come from someplace else and I don’t want to speak for them, but I
think what they normally look for is a local workforce because a local workforce is important to
them because they bring their friends to shop.
Rev. Hatney: The other question is you mentioned that this would be some modification
in tax district 1 and they are going to establish a new one, district 2. Any idea about the
modifications and why is that necessary?
Mr. Russell: What we would do was take the mega TAD that includes the increment
from a very large area, reduce this for a special TAD for this particular project which would
make the increment a little bit higher for this particular project and not spread it over for the
large size, you’ve got it spread in the smaller area of this particular project and that would
increase the tax percentage there, it would help them move forward.
Rev. Hatney: You would cut that of the . . .
Mr. Russell: Yes, sir.
Mr. Mayor: Commissioner Lockett, you had your hand up.
Mr. Lockett: Thank you, Mr. Chairman. I would just like to commend all those involved
in putting this together. I understand it was a lot of work and I haven’t been here as long as my
colleague, Commissioner Grantham, but I’m glad to say I’m here in the final stages of this
project and I would also like to thank Costco for having sufficient confidence in us and the
people of Augusta Richmond County to be willing to locate here and I’ll look forward to
shopping there one day.
Mr. Mayor: Thank you, sir. And one thing and then I’m going to recognize
Commissioner Johnson. I would like to say as working on this from the start people need to
know that Costco could choose to go anywhere. They have chosen Augusta. Fred, one other
point that I’d like to make is that you said that there’s not another one between Atlanta and
Charlotte. To the best of my knowledge the region that this is going to be pulling sales tax
dollars into Augusta from is a huge region. Commissioner Johnson.
Mr. Johnson: Thank you, Mr. Mayor. Again, Fred, and everybody that’s involved in
bringing this project together and coming up with a solution that will satisfy getting them here, I
definitely appreciate that and I’m going to say, just for the record, Fred, if you could just reiterate
the impact that this is going to have overall on this city financially in sales tax and development
and potential job growth so if you can just reiterate that so the people will know exactly the
impact that this is going to have and why it’s so important for us to make this decision and to do
what we’re doing today for Costco.
Mr. Russell: Thank you, Mr. Commissioner. I think probably the easiest way to do that
would be to talk about jobs to begin with. Those jobs are about 150 maturing at a little bit over
200 or so and those are good jobs for our people. A mature cashier, a cashier with several years
experience there, would get up to $48,000 a year is what their company averages. In addition to
that the part-time people which involve a lot of our seniors, involve a lot of people that would
have opportunities there, they get benefits. And as we all know based on our discussions last
week about benefits, that that is a great thing in itself that we would be able to provide for our
community. The sales that we are looking at for this store alone in a mature store averages about
$135 million a year in sales. This won’t happen the first day, we don’t think, maybe the second
or third day, if we are able to do that, but that’s the target for mature stores as we go forward and
that’s a big impact on our community. I think part of the benefit that you look at to us itself is
that they will be repaying that $10 million dollar loan with their money. It’s money we don’t
have now, it’s money that’s not generated on an empty piece of property, it’s money that’s there.
And if the money doesn’t work, we’re not on the hook. We’re not using our credit, we’re not
using our whatever, we’re depending on their success to make this project work and their success
is dependent on how hard they work to make it work and we’re comfortable based on their
experiences other places and based on their commitments to us today that this is a win/win
situation for everybody, not only our community but the business community as it helps small
businesses continue to grow and our other retailers as they benefit from some of the traffic that’s
going to be generated and our people that benefit from the out parcels that are filled and that
continue to develop in that particular area. This is not a $10 million dollar project. This is a
hundred million dollar project. This is a project that will continue to grow and we’re on the
cutting edge of what’s going to be at some point a regrowth of our economy and we’re going to
be ready to meet it. We’re not going to be caught waiting to build stuff to do that. We’re going
to be there on the cutting edge ready to roll when that begins to happen.
Mr. Johnson: Well, I’d just like to say thank you, thank you, thank you. I drive through
there a lot and I always talk about the day we can develop that property and it’s going to be a
great day for Augusta when you guys open and have that ribbon-cutting ceremony so I’ll look
forward to it, look forward to shopping there and welcome to Augusta.
Mr. Mayor: Okay. Commissioner Grantham, did you have one last . . .
Mr. Grantham: Yeah, I think one thing to piggy back on would be that we’re not issuing
bonds for this and this is something that was discussed very seriously. But it was not necessary
for us to have to issue bonds and I think if you would comment on that it would be good.
Mr. Russell: We’re not issuing bonds for this.
Mr. Grantham: Well, you’re not obligating the city to bonds.
Mr. Russell: We’re not obligating the city’s good faith and credit on this. We’re looking
at the tax dollars that are created through this project itself to help pay for it. The sales tax
dollars and the property tax for the TAD and once again, it’s based on their success. If they’re
not successful, they suffer, we don’t.
Mr. Mayor: Okay. We have a motion, properly seconded. If there’s no further
discussion, commissioners will now vote by the usual sign of voting.
Motion carries 8-0.
Mr. Mayor: Gentlemen, welcome to Augusta. We’re excited to have you here and to the
Commission, I think that unanimous vote speaks volumes. Thank y’all so much.
Mr. Russell: The press releases that will be going out I’d like each of the commissioners
to have one so if you have questions, you’ll have the numbers there in front of you.
[MEETING ADJOURNED]
Lena J. Bonner
Clerk of Commission
CERTIFICATION:
I, Lena J. Bonner, Clerk of Commission, hereby certify that the above is a true and correct copy
of the minutes of the Called Meeting of the Augusta Richmond County Commission held on
October 28, 2010.
______________________________
Clerk of Commission