Developer: County could be on the hook for millions if it breaks Mt. Zion contract

WINNSBORO – After weeks of publicly claiming that the cost of renovating Mt. Zion is unknown, County Councilman Moses Bell and the three-member ad hoc committee he appointed to find out those costs, were reminded Monday night that the cost information is readily available to the public.

Rory Dowling, principal of 1st and Main which owns and is renovating the buildings, said the Mt. Zion project carries a total price tag of $13.5 million, with the county responsible for $8.7 million of that amount.

Included in the $8.7 million is $4.2 million in rent – $600,000 a year for seven years – and a $4.5 million payment at the end of the seven years to purchase the building.

The developer obtained financing via a variety of tax credits to defray its costs.

Attorneys Tameka Isaac Divine, left, and Ray Jones with Parker Poe, and developer Rory Dowling attended the March 8 ad hoc committee meeting to answer questions from committee members Shirley Greene, Tim Roseborough and Neil Robinson. | Barbara Ball

One of the three committee members, Councilman Tim Roseborough, asked if the county could have taken advantage of the tax credits on its own, but Dowling said it couldn’t.

“Tax credits can only be utilized by the private sector. It’s basically a credit against income tax,” Dowling said.

Fairfield County also paid a $175,000 design fee up front and Dowling reiterated that the county fronted $1 million that went into an escrow account to help protect 1st and Main should the county back out. Fairfield County gets the escrow money back after fulfilling its lease obligations, per the deal.

Dowling said 1st and Main allowed the county to dip into the escrow account to cover several unbudgeted punch ticket items, such as wiring, audio-visual equipment and installing Plexiglas dividers.

He said the county has tapped between $400,000 and $500,000 from the escrow account.

“It seemed a faster way to get the funds to do the work,” he said.

Dowling noted that 1st and Main also absorbed $900,000 in cost overruns, mainly due to dilapidated conditions at the Mt. Zion property.

“When you go into an old building, you never know what you’re going to find. We found a lot in this building, unfortunately.

“We are assuming that responsibility,” Dowling added. “That is eating into our developer fee. To be honest, it’s eating into it pretty significantly, but that’s a responsibility we bore in the contract. We knew we had that risk and that’s not the county’s responsibility.”

The cost information has been made available previously at a number of council meetings, a public forum and in The Voice.

Updated rendering of renovated 5-building administration complex, which is expected to be move-in ready by end of summer 2021.

Bell and councilmembers Mikel Trapp, Greene and Roseborough opposed the renovation of the Mt. Zion buildings for administrative offices. While Bell said he is only concerned about discovering how much the renovation will cost the county, others on council have accused him of using the ad hoc committee as a way to renege on the county’s contract with 1st and Main.

Former Council Chairman Neil Robinson, who supported and voted for the Mt. Zion renovation, and also the third member appointed to the ad hoc committee, said at the Feb. 10 meeting that he worries the true intention of the Mt. Zion ad hoc committee is to lay the groundwork for cancelling the county’s contract with Mt. Zion.

But representatives of 1st and Main warned that Fairfield County would face litigation if the council backs out of the $13.5 million deal.

The cautionary advice came during Monday’s meeting after Roseborough raised the hypothetical issue of breaking the contract.

Specifically, he asked if the county’s liability in breaking the contract would be limited to the $1 million it placed into the escrow account designed to protect the developer.

“If the county decides to break the lease, it would cost the county $1 million. Is that what you’re saying?” Roseborough asked.

“No sir, ” Dowling replied. “We would be forced to enter into some legal ramifications with the county because we’re on the hook for $13.5 million.”

While committee members didn’t bring any new questions to the table about the contract costs, Jones pointed out some intracacies of the contract that will end up benefitting the county.

Toward the end of 2019 and early 2020, the contract with 1st and Main was amended to add the teacherage to the renovation.

“It was clear that the teacherage was there [on the property],” Jones said, “and it made a lot more sense to develop it and deal with it while there were contractors on site, and there was an interest on the part of the county to have some function there. So it was added to the lease and the square footage went up from 45,452 to 51,016, and the rent went up as well.”

Jones also said many of the costs of the renovation are not additional costs over what the county is already paying.

“They are costs that the county now pays for occupancy in other buildings around town that it will no longer have to bear if it brings everything under one roof,” Jones said. “Plus, bringing everything under one roof will make it more convenient for citizens to come to, if you will, a one-stop shop. So the costs you see here are not all new costs to the county.”

Dowling also gave a breakdown of how the circa 1930 buildings would be utilized.

The old auditorium is being revamped into a meeting space for county council meetings and other public gatherings. It will have a maximum capacity of 400. The original auditorium seats have also been restored and will be returned for seating. The full balcony is also being restored.

In addition, the separate cafeteria building is being reshaped to expand the county’s early childhood enrichment services. The gymnasium is also being renovated to include basketball and volleyball courts and a 1,000-square-foot fitness center with men’s and women’s locker rooms and recreation offices.

Administrative offices, the sheriff’s office and a 911 call center would relocate into the old classroom building where the rooms are ample and accommodating with large, refurbished original windows that look out over the neighborhood. The 1880s-era teacher building is being considered for a welcome center.

Dowling said he anticipates the site will reach substantial completion by late August, with over 51,000 square feet of space. The current county building is about 21,000 square feet.

No decisions were made Monday night. Committee chair Shirley Greene said the panel would report its findings to the full council in coming weeks.

Barbara Ball contributed to this story.

The massive auditorium has a full balcony and will seat 400. The original seating has been refurbished and will be returned to the auditorium, which will include space for County Council, community theater and other public functions. | Photos: Martha Ladd

Related: Developer Answers Questions About Mt. Zion Renovation

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