Fort Mill developer asks that new home buyers pay more of the infrastructure costs

Lennar wants people who buy homes in its new Elizabeth neighborhood to pay more of the costs the company would otherwise pay to support public infrastructure. It’s a move that would come amid increasing development costs.

Lennar Company Division President Jon Hardy and Castle Bay Group consultant David Nelson outlined a proposal Monday night for a new municipal improvement district that would add up to $1,750 per year for single-family homes and up to $1,050 per year for townhomes in Elizabeth.

That money would be collected each year for 30 years alongside, and in addition to, taxes.

However, the home builder will have to convince leaders in Fort Mill that the proposal isn’t just a way to take in more money for itself.

For comparison, a new single-family home in Fort Mill costs an extra $18,158 in one-time impact fees for the Fort Mill School District. That same home in Elizabeth, if assessed the highest amount over 30 years for the municipal improvement district, would cost an additional $52,500.

Commercial properties within the Elizabeth district would not pay additional fees.

Hardy said the new district would generate about $16 million in revenue for roads, water, sewer or other public infrastructure.

Much of the infrastructure is already in place for the first phase of Elizabeth, which is south of Fort Mill Parkway. A second phase will be on the other side of the parkway.

Signs in front of Elizabeth advertise homes from the $300,000s to $500,000s. Elizabeth lists close to 90 homes sites as already sold, under contract for purchase or otherwise accounted for, such as the model homes that opened last weekend.

“It’s fortunately selling well, ahead of projection,” Nelson said.

Several Fort Mill Town Council members on Monday questioned how the district would help the town, and not just Lennar, as the company was already required to make infrastructure improvements in Elizabeth.

“This could pile on even more for our citizens,” said Councilman Chris Moody.

The Lennar team told council members there will be a detailed financial breakdown and formal application within 45 days, and the company may have additional non-monetary offers for the town.

“I’d bring my A game,” Councilman Chris Wolfe said.

Elizabeth plans

Initial requests for new homes on the Elizabeth property date back almost a decade. In 2016, former U.S. Rep. John Spratt presented a plan for more than 700 family-owned acres along the Catawba River. The first proposal involved up to 3,400 homes and apartments.

Fort Mill Town Council ultimately approved up to 2,650 new residences with at least 350,000 square feet of commercial space and 60 acres donated for park and recreation space.

How Spratt property plan stacks up against other Fort Mill area projects

The current plan has 820 single-family homes and 492 townhomes, plus some apartments. Overall Elizabeth will have 636 acres of residential area, 127 acres of open space and 84 acres of commercial property.

Fort Mill Mayor Guynn Savage said Monday that people may see the ongoing project, at such a large scale, and not realize how much work the town did on what was at one point a plan bigger than combined neighboring developments of Massey and Waterside at the Catawba.

“There were concessions given during that process (by the developer) that were not always apparent,” Savage said.

Nelson said there are three commercial pieces of Elizabeth already under contract or moving ahead with plans. There’s a 12-acre retail and office parcel, another with a daycare and medical office planned and another site where apartments will go.

As thousands of new homes come to Fort Mill Parkway, these new businesses could join them

Nelson said future commercial growth is a driver of the municipal improvement district proposal.

“The commercial will take longer to come to fruition (without it),” Nelson said.

What is a municipal improvement district?

Riverwalk in Rock Hill has a district. So do Sun City and Roselynn in Lancaster County. They’re assessments rather than taxes, but can operate similarly. They’re intended to help pay for needed public infrastructure. They’re typically established on the front end of new development.

Yet at Elizabeth, there are many homes already bought or under contract that the Lennar team wants to include if the town allows the new district. Hardy said Monday the 30-year amounts could be up to $1,200 per single-family home or $720 per townhome annually for homes purchased before the new district’s approval.

If the town allows it, the Elizabeth district would be the first of its kind in Fort Mill. Savage said a district was discussed in prior negotiations on the Elizabeth property but never agreed to, and council members questioned how money charged to new homeowners would benefit the town. Hardy said without the district, Lennar would have to pay for the needed public infrastructure.

“We would have to pay for that out of our pocket,” Hardy said.

Hardy and Nelson said development costs are up considerably. Homebuilding materials alone are up 60% in the past two years, Hardy said. Hardy and Nelson said without a new district, the homes and other products at Elizabeth won’t change. It could just take longer for commercial development.

District revenue would make up less than a third of public infrastructure costs for Elizabeth, and about a tenth of overall project costs, Hardy said. Asked why Lennar wouldn’t instead build needed costs into future home prices, Hardy said the municipal improvement district makes more financial sense.

“If we didn’t believe we need to go through it, believe me, we wouldn’t be doing it,” Hardy said.

Managed growth

Savage said the only reason the town negotiated with owners of what was then called the Spratt property was to have a say in a development that would happen with or without the town. Annexing the property at the time gave the town some level of control, plus tax revenue.

Savage said it’s clear in town decisions the past couple of years where the current council stands on growth issues.

“We’re not pro-growth,” Savage said. “We want managed growth.”

Council members shared concern with the toll a new district might put on town staff.

The town agreed to residential development spread over 20 years at Elizabeth, but several years without construction brought up concern the project can put up more new houses per year to make up the difference.

Hardy said his company doesn’t want to overburden the town with too many homes at once, though he says there is plenty of demand for new Fort Mill homes. Moody looks at the Waterside project, where there has been concern about some of the new construction near the Catawba.

“I’ve seen some of the infrastructure challenges there, and I hope Elizabeth is going to raise the bar,” Moody said.

Wolfe summed up the sentiments of several on council. As a lifelong resident, Wolfe said he wasn’t there Monday to help Lennar. He wasn’t there to help himself. He’ll make his decision based on what’s best for Fort Mill residents.

“I’m here for Fort Mill,” Wolfe said.