Oct. 05–Walking on the west end of River Street can be a lonely stroll.
Tourists, street musicians and workers on their way to the job disappear as the shops and restaurants give way to the vacated remnants of the area’s industrial past.
There is no more riverwalk. It ends abruptly before a fenced-in vacant lot. Instead, a deteriorated street and defunct power plant await pedestrians who make the trip.
Past the last bar, a dirt trail serves as a makeshift path to the upper portion of the Historic District. Clamber up the hill and one can return to the world of art, food and drink by following Montgomery Street south to City Market.
The area’s days of neglect may be coming to an end, however.
On Thursday, the Savannah City Council
agreed to partner with two hotel developers to transform the area into a site shoppers, diners and sunset lovers can’t ignore. But first, the city has to figure out how to cover a $14 million price tag.
Extending River Street
Jim Shrim, of Rockbridge Capital, and Richard Kessler, with The Kessler Collection, may have been the City Council’s two favorite people in the room during a workshop Thursday morning.
With a hand-crafted model of the hotel projects displayed on the table in front of them, the mayor and aldermen praised the two developers after learning their West River Street plans amounted to a private investment of about $280 million.
“If this materializes, it changes the dynamics of the entire west end of River Street,” said Alderman Tony Thomas.
City staffers did not have to do much persuading to garner the council’s initial support for a plan to invest $14 million in tax dollars toward improvements that include a 1,300-foot extension of the Savannah Riverwalk.
Based on a plan developed in 2007, the street’s deteriorating pavement would be removed to expose the Belgian block underneath, sidewalks would be added, an elevator would be installed and a staircase would replace the dirt path to Montgomery.
“The concept is really to make this look like the rest of River Street,” said Assistant City Manager Peter Shonka.
A final agreement with the funding method in place still has to be worked out, but the plan proposed Thursday would use increased tax revenue derived from the increased property values, room bookings and sales generated by the hotels to pay for the public improvements over an expected 20-year period.
“Because of the development, we’ll have the tax revenue to pay for these things,” said city attorney Brooks Stillwell.
Funding safeguards
City officials say they are being extra cautious in their revenue projections and financing arrangements in recognition that grand plans do not always materialize as expected.
The vacant Savannah River Landing site beyond the east end of River Street, which once generated similar enthusiasm, serves as a reminder of potential buzz kills.
The 54-acre site was also expected to be an extension of downtown, but the 2008 economic downturn brought that plan to a halt. The city is now paying about $1.4 million in annual debt payments after investing in infrastructure for the development, including a closed off east extension of the riverwalk.
To prevent a similar mishap, protective provisions will be included in the final agreement to limit the city’s financial liability, Stillwell said. The City Council will have to approve those provisions, as well as the detailed funding plan, before the project can proceed.
David Maxwell, Savannah’s chief financial officer, said staff is being “ultra-conservative” by only analyzing the hotel rooms and not taking into consideration the additional revenue the shops and restaurants will likely bring. In addition, the city’s investment will be limited to what can be supported by the incremental increases in tax revenue.
“If it doesn’t get built, then the city doesn’t have to pay for anything,” Maxwell said.
Jobs and dollar signs
The Rockbridge Capital hotel being planned for the southwest side of the River and Montgomery streets intersection will replace a squat building at the site with a 165-175 room hotel at an estimated cost of about $60 million.
Across River Street to the north, Kessler’s Plant Riverside development is expected to add 430 rooms to the area by constructing new buildings on both sides of the former power plant, which will be converted into a hotel. The project’s cost is estimated at about $220 million.
The plan outlined Thursday puts the hotel developers in charge of building the riverwalk extension, stairway and other public improvements to prevent overloading the work site with separate contractors. Once completed, the developers would sell the public facilities back to the city at a fixed cost, Stillwell said.
The developers’ designs for the public improvements would have to be approved by city staff before work begins to make sure they are appropriate, said Shonka, the assistant city manager.
Mayor Edna Jackson said the city had made clear to the developers that local workers are expected to be involved in the projects after some aldermen raised concerns about handing the projects over to the developers.
“I want to go down there when construction is going on and see someone I know,” said Alderman John Hall.
While reassuring the council their desire for local participation will be met, City Manager Stephanie Cutter said some of the work will require specialized skills and contractors will have to hire appropriate staffing.
Kessler said the size of his project will likely put a strain on the workforce in Savannah, but he will try to hire anybody who can do the job.
Moving forward
Besides some accolades for the developers, the City Council’s unanimous vote Thursday to approve the initial development agreements came with little discussion. The quick passage was a contrast to past meetings, when the proposed height of Kessler project drew some opposition, including a lawsuit to stop the change.
Concerned about setting a precedent, Aldermen Mary Ellen Sprague and Tom Bordeaux had voted against amendments for the project that doubled the buildings’ allowable heights to four and six stories.
Kessler’s pledges of jobs and investment helped convince the rest of the council to support the change.
Local architect Patrick Shay, who is involved in the Rockbridge hotel project, had also criticized the height change for bypassing the Savannah Historic District Board of Review approval process and blocking his hotel’s views.
But after Kessler’s height change was approved, increased height limits were subsequently requested and approved by the review board and zoning board of appeals for the Rockbridge project.
The lawsuit filed in June by nearby property owners was dismissed about two months later after a settlement was reached with the developer.
Both projects are scheduled to go before the historic review board on Oct. 8 for additional design approval.
If there are no problems, construction on the Rockbridge project is expected to start in April next year, followed in about two months by the Kessler project’s ground breaking.
Mayor Jackson voiced her wish during Thursday’s workshop that the hotel projects proceed with as little delay as possible.
“I’m hoping that we are sending the message to those boards,” she said, “to make sure we can continuously move this project forward.”
