Postal Way Rezonings – A Tale of Two Development Agreements

By Paul Gable

For several months, county taxpayers, especially residents of Carolina Forest, have been told that their Council District 3 representative, Dennis DiSabato, is supporting two rezoning requests on Postal Way, which will add approximately 1,654 new residential units to an already crowded area, only because the developers will pay the total cost of the new public benefit infrastructure associated with the two proposed developments.

The residents aren’t buying the fact that just because developers are paying for some extra infrastructure is reason to support the projects. Residents have voiced continued concerns that adding any more housing density to the already crowded area will only add more overcrowding to already clogged roads and schools.

Citizens opposing the projects, a number of whom were at the council meeting last week, have taken to voicing their complaints to council member Mike Masciarelli, whose council district is located across U. S. 501 from Council District 3.

Masciarelli attempted to give voice to some of the criticisms which he had heard from citizens during last week’s council discussion. DiSabato challenged Masciarelli as to why citizens from District 3 were calling Masciarelli instead of DiSabato. Masciarelli said maybe it was because they were looking for somebody who would listen to their concerns.

DiSabato is obviously in full support of the projects regardless of questions raised by opponents.

How much do the council members understand about the commitments, by developers and by the county, included in the two development agreements they are being asked to approve?

Like always, the devil is in the details of the two development agreements county council is currently considering for what are being called the Chatham Crossing Tract development and the Waters Tract development. The wording contained in the two development agreements and the county’s cost estimates leave funding from the developers approximately $3.668 million short of the overall estimated cost of the new infrastructure, provided by the county Planning Department.

After in-depth study of the two separate development agreements (one for each tract), the conclusion drawn is the developers are not contractually obligated to pay for all the costs of the new infrastructure and the county may be left having to pay nearly $4 million, in taxpayer dollars, of those infrastructure costs.

The stated purpose of the Chatham Crossing LLC Development Agreement is to agree on certain public benefits. The agreement names: third lane on Postal Way, a roundabout at intersection of Postal Way and North Chatham Ave., concrete walkway and shared use paths and a Frontage Road running parallel to U. S. 501.

The agreement states, “Such Roadway and Related Public Benefit Improvements shall be constructed, installed, completed and dedicated in accordance with County standards by owner…” It further states the Owner (of Chatham Crossing development) is not “in anywise responsible for the construction of any public benefit improvements on or related to the Waters Tract.” It also states the construction of the Frontage Road on Chatham Crossing is contingent upon the approval of a Development Agreement concerning the Waters Tract showing the construction and continuation of the Frontage Road.

Nowhere in the Chatham Crossing Development Agreement is there mention of a new traffic light on U. S. 501 nor funding for such an improvement.

The Waters Tract Development Agreement is between Horry County and RIRA GP Inc. It reads quite differently. It does not specifically name the public benefits. Instead it refers to unnamed “improvements located within and on its property” and “such improvements located outside Developer’s Property (Offsite Improvements).”

The Waters Tract Development Agreement states the improvements (again unnamed) located within and on the developer’s property will be the sole responsibility of the developer. However (and this is a biggie), the offsite improvements (unnamed) “shall be installed, constructed and paid for by the County.”

The agreement goes on to state, “Developer agrees to pay to the County at building permit issuance, a contribution towards the cost of such Offsite Improvements in the amount of One Thousand Five Hundred ($1,500.00) per approved density unit pursuant to the PDD (“Offsite Improvement Contribution”). It further states the developer “is not in any way responsible for the construction of any public benefit improvements on or related to the Chatham Crossing Tract.”

During last Tuesday’s county council meeting, three main public benefit improvements from the two projects were identified by Horry County Planning and Zoning Department Head David Jordan. They were the Frontage Road, named an onsite improvement, adding a third lane to Postal Way and the new traffic light and intersection improvements on U. S. 501.  The last two were named offsite improvements.

Jordan said the estimated cost of the Frontage Road is $4 million. The Frontage Road is an onsite improvement with the cost borne solely by the developers. The third lane on Postal Way, at an estimated cost of $6.5 million, and the new traffic light, estimated to cost $3 million, are offsite improvements, according to Jordan. The total estimated cost of the three improvements is $13.5 million.

Looking at the combined map of the two projects, approximately 40% of the Frontage Road and 40% of the third lane addition to Postal Way are in the Chatham Crossing Tract with the remaining 60% of each road within the Waters Tract. The traffic light and associated intersection improvements lie completely outside of both tracts.

Using the above estimated costs from the county Planning Department and the wording in the two development agreements, the costs guaranteed to be paid by the Chatham Crossing developer are $1.6 million (40% of $4 million) for the Frontage Road and $2.6 million (40% of $6.5 million) for Postal Way third lane. There is no mention in the Chatham Crossing Development Agreement of any payment for the traffic light. Therefore, according to the wording in the development agreement and estimated costs by the county Planning Department, Chatham Crossing developer will pay $4.2 million of the $13.5 million estimated cost of the public benefit improvements.

Using the same criteria as above, the Waters Tract developer will pay $2.4 million (60% of $4 million cost) for the Frontage Road construction. In addition, the developer will pay $1,500 per density unit as a contribution to the offsite improvements (Postal Way and traffic light). With the PDD showing 1,154 units, the total the developer will contribute to the county for offsite improvements is $1.731 million for total payments by Waters Tract developer toward the cost of the public benefit improvements of $4.131 million.

And, the Waters Tract developer is specifically exempted in the agreement from paying the countywide impact fees established last year on new development, approximately $1,500 per unit. The specific wording is, “…make it appropriate for the County to give assurances to Developer that the Property will not be subjected to any Impact Fees…” and “The prohibition against impact fees…shall prohibit the imposition of fees and charges which specifically impact only new development.”

Considering the Waters Tract developer is specifically exempted from paying the normal county impact fee of approximately $1,500 per unit. Instead, the developer is making a “contribution” of $1,500 per unit It is hard to justify that the developer is paying the cost of any of the offsite improvements out of pocket. The developer is making a contribution to the county of a maximum of $1.731 million while the county is waiving impact fees of a maximum of $1.731 million.

Combining the payments by the developers gives a total of $8.332 million. The estimated cost of the improvements is $13.5 million. Where does the remaining $5.168 million come from to complete the improvements?

Jordan stated that the county expects SCDOT to contribute $1-2 million towards the cost of the traffic light and intersection improvements on U. S. 501. For calculation, let’s use the halfway point of $1.5 million from SCDOT for the traffic light.

This leaves the county with funding $3.668 million of the total estimated cost of $13.5 million for the Postal Way public benefit improvements. DiSabato continues to insist the cost of the improvements will be totally paid by the developers. However, the wording in the development agreements and the costs estimated by the county Planning Department do not support DiSabato’s contention.

And, none of the cost of new school infrastructure, caused by the increased housing units, will be borne by the developers. Taxpayers will pay all of those costs.

Second reading of ordinances for the two development agreements and the two rezoning requests were deferred last week by Horry County Council. Most council members agreed they did not know enough about the development agreements and rezoning requests to vote on second reading.

DiSabato has offered to have another community meeting to discuss the projects. It would be a good idea to have a council workshop on the two development agreements and what they actually commit both the developers and county to pay for.

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