Quarrier Street housing project still a go despite denial of grant
Charleston officials intend to move forward with a plan to build commercial space and downtown housing on the site of the old Holley Hotel on Quarrier Street, even without a grant to help fund the project.
City Manager David Molgaard came up with the idea to construct a building with commercial space on the ground floor and 40 to 60 apartments on the upper levels.
The city applied for a grant from the Bloomberg Foundation to help fund the project.
That organization, named after New York City Mayor Michael Bloomberg, awards one $5 million grant and four $1 million grants to cities that come up with innovative ideas to improve their communities.
Charleston leaders learned earlier this month that they were not among the 20 finalists selected for the grants. But Molgaard doesn't believe that decision dooms the project.
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Partnership with company, bonds could help pay for construction
"We decided early on that we would start moving on the project and not wait and see what happened with the grants," he said. "Nothing along those lines has changed."
Mayor Danny Jones also continues to support the plan.
"We're going to develop that property one way or the other," Jones said about the lot on Quarrier Street where the hotel used to sit. "I think we can come up with a way to make this work."
The idea to build the structure, which would be located next to the Quarrier Diner, does hinge on whether area employers would be willing to subsidize employees' rent.
Molgaard hopes businesses will be willing to provide a $10,000 annual subsidy per employee for three years to help fund the project. The employee would be asked to pay rent at a "fair market value," he said.
Rent likely would be about $700 per month, Molgaard said during an earlier interview.
Half of the annual subsidy could be used to pay for the debt service to construct the building, as well as maintenance for the structure.
The other $5,000 would be placed into an account that would build up over three years. Employees would stay in their apartments for that maximum timeframe so the account would build to $15,000 per employee, Molgaard said. This money then would be loaned to the employee to help pay for the purchase of a house in Charleston, he said.
Molgaard does not foresee the city using any of its own revenue to help construct the building, but he said the city might do so to help pay for the design.
Charleston's maintenance crews also could be used to help maintain the property, he said.
Another city contribution would be the property itself, which the Charleston Urban Renewal Authority owns and has been trying to sell for years.
The authority is asking for about $1.4 million for the 40,592square-foot plot of land.
"We think CURA is supportive of the project and willing to put up the property," Molgaard said.
He and other city officials also will have to come up with ways to pay for the construction of the building, he said. This might be accomplished with a public/private partnership — the city would own the building, but a company would lease it, he said.
The city could borrow money by selling bonds and use the rent payments and employer subsidies to pay the debt, Molgaard said.
"All of these possibilities need to be explored to find out what makes sense," he said.
The next step is setting up a program for the young professionals who would participate.
They would take part in the program for a maximum of three years. During that time they would be introduced to local leaders and philanthropists to foster community participation, Molgaard said. They would be expected to participate in a program that would improve the community as a whole during the second and third years.
City leaders will approach local business leaders after the program design is complete to secure concrete commitments for the subsidy, he said.
"We've wanted to ask for commitments and more distinct signs of support after we actually put together more of the pieces," Molgaard said. These details will be hammered out after the beginning of the year, he said.
Both Molgaard and Councilwoman Susie Salisbury believe the interest from business leaders in the community is strong.
The Charleston Area Alliance board is interested in the project, as is the Kanawha Valley Foundation, he said. Although Salisbury doesn't believe the lack of grant funding dooms the project, she is disappointed that the city was not a Bloomberg Foundation grant finalist.
"I'm disappointed because it would have been nice to have some money to start off with," she said. "But this doesn't mean we won't try to find money for this project from other sources."