RFP Staff
♦NC DENR gave the green light for development of 329 South Main Street, in a notification Tuesday from Dan Graham, a hydrologist at the Mooresville regional office of the N.C. Department of Environment and Natural Resources—a major step in the eventual development of the site on which the City of Salisbury has offered for the Rowan-Salisbury Schools’ new Central Office.
Plagued by controversy since the School Board selected the site, after closed door negotiations between city and school officials, the property may now be built upon. Despite the substantial groundwater contamination observed in monitoring wells, pumping from those wells may be conducted, and the wastewater collected and properly disposed of, until the concentrations of toxic chemicals are diluted to acceptable levels.
In the notification from Mr. Graham to City Manager Doug Paris, he noted, “However, every effort should be taken to maintain the integrity of the existing monitoring wells on site until such time that the site is eligible for no further action.” So while development may proceed at will, the absence of a “no further action” (NFA) letter means that the liability associated with possible contamination at neighboring properties in the vicinity is still unknown.
The $8 million, that Salisbury City Council will “consider” borrowing for the school system to construct the Taj Mahal would have to be reviewed for approval by the Local Government Commission (LGC), a division within the NC Treasurer’s Office. But until the City has an “NFA” letter in hand, it is improbable any financial institution would consider such a loan, due to the as-yet undetermined potential crossover contamination to neighboring properties.
It is important to mention the actual cost of construction on infill and the architectural adjustments required will likely run around 10 million dollars and not the 8 million dollars quoted by the city and the school board. According to commission chairman Jim Sides, he saw nothing in the architectural prints, presented by Bill Burgin the last time the school system pitched the Central Office for 329 S. Main for 8 million dollars, showing structural adjustments required for building on infill. Further chairman Sides received no communication from Burgin or the school system that infill adjustments were made. Generally adjustments for a three story building to be built on infill, such as the Central Office, would run in the vicinity of 2 million dollars. Thus the estimated 10 million dollar price tag.
Chairman Sides said: “For me and some of the other commissioners the biggest problem with the downtown Central Office was not contamination that some in the local media keep bringing up, but the price tag and the fact that such spending would endanger the school system’s ability to repair, renovate, and build school houses. If the school system waited until 2016 they might save enough to build their Central Office without endangering needed school renovation and replacement. We couldn’t in good conscience loan them the money. No contamination was not the key issue.”
That the county commissioners will take up the downtown Central Office is unlikely. Last night Chairman Jim Sides told the RFP: “We voted 3 to 2 on this issue and that’s that.” Vice Chairman Craig Pierce told us Monday evening: ”It’s a ”dead issue”. There’s no real interest in rejoining that project. It’s on the city’s ball court and they are welcome to do anything they want with it.” Mike Caskey, when asked if the county commissioners might revisit the issue, chuckled: “I don’t think so.”
Click here to read an article on NFA letters.
Jon Morris reported recently: “If Salisbury intends to get a loan for the current estimate of $10 million dollars for this project to be built on infill, the city will have to obtain approval for that loan from a division of the NC Treasurer’s office called the “Local Government Commission,” who makes a recommendation. A “thumbs-up” is required for a loan, unless the city elects to use their reserve funds to build the project, and seeks reimbursement. Might be tough with all the millions Fibrant has siphoned from the reserves without paying a cent back.” Morris continued: “It is likely to pose a challenge for the City of Salisbury to find a lender willing to hand over 10 million dollars for a project proposed to be built on a site where testing has confirmed the water table is contaminated by the presence of benzene and MTBE. The reason: it is still unknown whether those groundwater contaminants are confined solely to the property at 329 S. Main or whether groundwater contamination may have migrated off site, to neighboring properties. And if indeed contamination has migrated to neighboring properties–whoa! Those neighboring property owners would be looking for the current owner of 329 S. Main to ante up for a toxic waste cleanup of the groundwater beneath their properties.
“Right now,” wrote Morris. We know that the City of Salisbury is the owner of 329 S. Main St. But even if the county commissioners were willing to assume ownership of the site — and the associated legal liability for off-site contamination that may follow the chain of title—from what money bin would the construction loan come? It seems like an ill-conceived plan to still consider a project on which no reputable financial lending institution would lend the 10 million dollars for the growing price tag of the Taj Mahal. This 9th wonder of the world already costs nearly half a million for it’s oft-erased architectural prints.”
“As I suggested a few weeks ago in my letter-to-the-Editor of the Rowan Free Press”, wrote Jon Morris. “The City of Salisbury may not go beyond “considering” a loan to the Rowan-Salisbury School System for the Downtown Central Office. The Local Government Commission (LGC) is unlikely to approve the application for such a loan, especially since the city is not a stakeholder in the county school system.”
Click here to read “Is Salisbury Still Considering a Loan to the School System”: A Letter-to-the-Editor from Jonathan Morris.
Councilman Brian Miller said if the state has no objections to development, county commissioners shouldn’t either. But Miller spoke more about this subject, saying he was skeptical that commissioners would come back. ”Their obstacle has now been removed,” Miller said. “So they will have to come up with a new reason.”
If the City had pursued financing of this property before purchase through an FDIC lending institution, they would have been required to perform ASTM Environmental Site Assessments. But since the City merely wrote the owner a check, and did not initially finance the property, they were able to skirt the environmental “due diligence” process. Now, the City and the School System are expecting the County to pick up their basket case site and “borrow” $8 million against it. Even if the County wished to do so, the ‘due diligence’ process would take over a year, and tens of thousands more in engineers, contractors and lawyers, before the ‘due diligence’ could be proven.
Councilman Miller, a banker, doesn’t seem to be very concerned about the “lend ability” of this property. Perhaps that is because bankers see local governments ability to raise taxes (if monies are needed to negate expensive liabilities) as a cash-cow. Fortunately for Salisbury’s taxpayers, between the LGC process and the FDIC bank lending “due diligence” rules, some clear warnings will be revealed. Then it will be Mr. Miller, and not commissioners, who will have to “come up with a new reason” as to why the county should write a blank check out of reserves to finance the City of Salisbury’s lack of due diligence in purchasing and grading a toxic cleanup site for the Taj Mahal project.
Click here to view a folder containing files related to Environmental Due Diligence and Loans.
Salisbury City Council has not voted yet to go forward with seeking a loan. They have not gone beyond the “considering” stage. At this point in time it appears the school system will have a rugged time finding partners for their dance.
