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TWSA considers policies to help displaced N.C. 107 businesses

Speedy’s Pizza, a landmark business on the list for relocation, is one of the many businesses along the corridor that does not own the building where it’s located. Holly Kays photo Speedy’s Pizza, a landmark business on the list for relocation, is one of the many businesses along the corridor that does not own the building where it’s located. Holly Kays photo

There’s still more than a year to go before the N.C. Department of Transportation starts acquiring right-of-way for the N.C. 107 project in Sylva, but businesses are already making decisions about whether to leave town, and governmental entities are already having conversations about how to entice them to stay. 

One of those entities is the Tuckaseigee Water and Sewer Authority, whose Policy Committee held a meeting last week to discuss possible incentives for affected properties. 

“I know these dates are far off, but I know these businesses along this corridor are already making decisions,” said David Nestler, a member of the TWSA and Town of Sylva boards. “I think we need to have that policy in place as quickly as possible if we want to keep those businesses.”

The policy under discussion had to do with system development fees, which until earlier this year were known as impact fees. They’re upfront fees that new users must pay to tap into the water and sewer system. TWSA’s fees had garnered criticism for being too high — in one publicized case, a restaurant owner was looking at $45,000 to get water and sewer to his new building — but were reduced in July following implementation of a state law governing how the fees are set. Under the new system, that same restaurant would have been charged $17,000 instead.

SEE ALSO: Work to start on alternative road plan

While the fees are much lower than they used to be, they’re still substantial. And because the water and sewer capacity they pay for is tied to the property, if a business decides to move to a new location it can find itself facing a hefty fee to get allocation at the new place. 

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That’s where the N.C. 107 project could cause problems for displaced TWSA customers. At 25 percent complete, current plans list 54 businesses, five residences and one nonprofit slated for relocation, with the potential for more businesses to decide to relocate even if they’re not required to. TWSA is reviewing property records for 150 customers who could be affected in ways ranging from minor to major.

The question is, if a business owner is ousted by the road project, should that person be expected to bear the expense of re-purchasing allocation they’d already had at their original location? 

If the DOT takes a property, TWSA Executive Director Dan Harbaugh told the Policy Committee, the reimbursement will account for the value of the system development or impact fee paid. But that doesn’t mean that TWSA shouldn’t consider a policy allowing affected property owners to transfer their purchased allocation somewhere else in Sylva. The town contains very little land suitable for businesses looking to relocate, and because DOT relocation funds can be used anywhere within a 50-mile radius, displaced businesses could easily decide to leave Sylva altogether.

“By doing a transfer policy, do we do anything that helps with the business staying in the community?” Harbaugh asked. “That is the upside is that allows them to be more focused on staying here and staying on the TWSA system.”

However, many — if not most — of the businesses to be affected rent their space rather than owning it. Such businesses could be eligible for relocation funds, but because they don’t own the property DOT would not be reimbursing them for the value of existing water and sewer hookups. If they relocated within Sylva, they could find themselves on the hook for an expense they’d already had access to — or, in some cases, purchased outright in rented space. 

“The reason I think we need to do a transfer policy instead of just letting DOT reimburse is there are issues which I think are pretty common where the person who owns the business does not own the property,” said Nestler. 

“But TWSA should absorb free allocation for renters who are displaced?” asked Tracy Rodes, chair of the TWSA board and mayor of Webster. “I don’t think that’s fair.”

“I think it’s fair,” Nestler replied. “It’s a tremendous disruption for the whole community in the town of Sylva. Everybody is having to absorb the cost. The town of Sylva is going to take a huge hit on revenues and nobody’s going to come reimburse us for our lost sales tax revenue.”

Sylva Mayor Lynda Sossamon, who attended the meeting, nodded her head to that point and told the committee that most of the businesses to be affected rent their space rather than owning it. 

“The people that came (to the town’s Aug. 6 public hearing), we had a list of whether they were property owners, business owners or both, and along 107 there are very few that are both,” she said. “Most of the buildings are occupied by renters or leasers.”

Various government entities in the county are gearing up to do what they can to help the displaced businesses, Sossamon said, with the town planning board currently looking at fees it can waive, such as administration and sign fees, to make relocation in town easier. The town is also requesting that the county do the same with inspection fees, she said. 

“I would hope as mayor and a citizen that shops in those places that we would do all we could to ease the burden that’s going to be on those people,” Sossamon said.

However, said Harbaugh, “the devil’s in the details when it comes to something like that.” For instance, how long would the window to transfer allocation be open? Where would it apply? Everywhere in TWSA’s coverage area, or only on hookup-ready properties? And how should TWSA treat allocation owners versus the businesses renting space from those owners? 

While all three Policy Committee members said they feel TWSA should offer some incentive for business owners to stay in Sylva, Rodes and Board Member Buddy Parton were more cautious in their position than Nestler. 

“Whether you charge a fee for a sign or not is not going to impact what your capacity is to put signs up or anything like that,” said Parton, referring to Sossamon’s comment about town policies now under discussion. “But if we’re doing something with a business moving, that will impact the capacity wherever they’re moving to.”

“We need numbers and a plan before we do the policy, enact the policy,” said Rodes. 

The problem with that, said Nestler, is that the DOT will continue making its plans up until right-of-way acquisition begins in 2020, but businesses are already making decisions about whether to stay in Sylva or get out of dodge. He also theorized that TWSA could come out ahead on water and sewer capacity, since allocation held by relocated building owners who don’t re-establish themselves in town would “go poof.”

If the TWSA board doesn’t want to outright give allocation to relocated renters, Nestler added, there are other options. It could allow them to access rented allocation equal to the amount they had at the other location free of charge. That way, the allocation wouldn’t get passed on to the building’s next user but would still be available to the affected business. Or, Harbaugh suggested, the businesses could be given a finite number of free years of allocation use before being asked to pay. 

Either way, said Nestler, “We need to be open to helping more than the person who actually owns the allocation, because that doesn’t represent the full picture of who’s affected.”

Ultimately, the committee decided to recommend that the full board approve allocation transfers for property owners along N.C. 107 and to continue researching and brainstorming a policy to help renters. 

“I think we should do something to help them, especially if other governments are helping and chipping in,” said Rodes, “but I don’t know what.”

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