Bissell Companies is hoping to get reimbursed from tax revenue for the $11 million the company will spend to improve roads around Ballantyne Corporate Park.
The road improvements are part of a major expansion of the park that includes adding up to a million square feet of office space, nine new buildings, 200 hotel rooms and 600 residential units.
Bissell Companies is going to apply to Charlotte's Synthetic Tax Increment Financing program, or Synthetic TIF, a partnership between the city and county and the private sector to advance economic development.
If the Synthetic TIF is approved by the city and county, Bissell Companies will pay for road improvements and be reimbursed from the increased property tax value of the expanded corporate park.
The repayment would begin in 2015 and continue for 15 years. The company would get 45 percent of the property tax increase and the city and county would collect 55 percent.
The Synthetic TIF application will be included in the rezoning request for the park, said Ned Curran, president of Bissell Companies.
The zoning hearing before City Council is set for July 18.
Curran said he hopes to have the Synthetic TIF approved by fall to allow road construction to begin as soon as possible.
"The reason we decided to apply for the STIF is because we knew it was the best way to get things done quickly," said Curran. "With the fiscal challenges of the government, we thought it would take a while to process and (road) improvements might not happen for at least a decade."
Bissell Companies will only be repaid if the tax value of the corporate park increases.
Curran said he understands the company stands to risk more than the city and county but feels confident the tax value will increase.
"In this case, you have an organization that's willing to gamble that the tax space is going to grow," said Curran. "But if it doesn't, we won't get repaid, and we understand that. We are motivated to keep the property well maintained to help with property values."
Curran said he believes the road improvements will be a welcomed addition to the area.
Although the improvements will take place on corporate park property, many of those roads are used frequently by the public.
Improvements include connecting the two sections of North Community House Road and installing a bridge over Interstate 485, an additional right turn lane on Ballantyne Commons Parkway onto Johnston Road and lane expansion on John J. Delaney Drive.
The improvements are meant to help traffic on Johnston Road, which is used by 55,000 cars a day, according to Curran.
"These types of road improvements will benefit the entire southern portion of the county," said Curran. "Our traffic experts said once North Community House Road is completed, over 80 percent of the traffic will be cut-through of people who don't have anything to do with the park."
Warren Cooksey, District 7 city council representative, said Synthetic TIFs are "somewhat" high profile because the public perceives it as a government hand-out to big businesses.
"In this case, though, Bissell is investing its own money before receiving any contributions from the city or county," he said. "Because the STIF is being done as a repayment, the risk is higher for the company than there typically is with these. Usually the risk is more on the public side, but this situation is unique."
Cooksey said he is not always in favor of using Synthetic TIFs to finance private projects. He said he has seen jurisdictions overuse Synthetic TIFs and "hollow out" the city and county's general fund.
"If you do too many of them, you don't have the tax revenue needed to fund services that come with growth," he said. "Things like police and fire come from the general fund and if we are paying for capital projects with the tax revenue, we won't have the money for those services."
Cooksey said one way Charlotte has guarded against the potential problem is to cap the number of Synthetic TIFs they approve every year.
Currently, the cap on Synthetic TIFs is three percent of all city property tax levies generated each fiscal year.
According to Cooksey, the city has a payout cap of $10-11 million every year.
"As far as the Bissell STIF goes, they are helping the city out considerably by stretching the $11 million repayment over 15 years," he said.
Cooksey said he can't comment on how he will vote on the expansion and Synthetic TIF until he hears the proposal during the rezoning hearing.
Curran will discuss the Synthetic TIF and the expansion of the corporate park at the Ballantyne Breakfast Club Meeting on June 11.