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Mystery company to receive county tax incentive plan
By Dan McCue
Staff Writer
The Charleston County Council approved a fee-in-lieu-of-taxes agreement with a mystery company that will soon be investing $38 million, including $9.7 million for a new manufacturing plant, to be located in the Palmetto Commerce Park in North Charleston.
The project, code named “Project SG Ventures,” is described in council documents as a leading U.S.-base manufacturer that has been activity engaged in discussions with county Economic Development Director Steve Dykes since February, and chose the commerce park site after considering a number of locations throughout the Southeast.
The company plans to employ as many as 80 people here at an average salary of $24 an hour. The council documents describe the company as having an annual payroll of approximately $3.84 million.
“This is a big opportunity,” said Dykes during the council’s July 24 meeting. “It’s a manufacturer, requiring a healthy head count of employees, paying good salaries and committing to making a significant capital investment in our community.”
He declined to disclose any further information about the company, citing confidentiality agreements.
In order to facilitate the expansion of the firm into the Lowcountry, Dykes committed to the use of fee-in-lieu-of-taxes, a “multi-county park” designation for the project, and a special source revenue credit to the owner/landowner, an industrial contractor currently identified only as “Project Gwinn.”
The fee-in-lieu-of-taxes agreement for Project SG Ventures features an assessment ratio of 6%, with millage fixed at the current rate of 253.6 over the next 20 years. Council was told
the tax revenues from the project are estimated to be $5.22 million during that time period.
A related fee-in-lieu-of-taxes agreement with Project Gwinn will also feature an assessment ratio of 6% over the next 20 years.
Also provided is a special source revenue credit equal to 6.8% of fee-in-lieu-of-taxes revenues for Project Gwinn to address several public infrastructure, site and building construction costs. This SSRC applies to the first four years that fee-in-lieu-of-taxes payments are received and has been capped at $357,000.
Although the council’s action effectively commits it to the agreements, it will still have to revisit the matter in the form of a formal ordinance shortly before construction on the project begins.
Paraphrasing a line the late actor and director Orson Welles used to utter in television commercials for Paul Masson wines, Dykes vowed to “reveal no project before its time” when pressed for more information on the company.
He went on to predict that its identity would likely be revealed sometime in the fall, although he hastened to add that at this point, that was only a guess.
In related action, the council on July 24 also endorsed fee-in-lieu-of-taxes agreements for the Tenet Healthcare Corp., and TWL Precision Inc., the British automotive parts supplier, which recently announced that it is locating its North American headquarters here.
As in the case of Project SG Ventures, both agreements must be ratified through passage of a formal ordinance. Because the TWL Precision project is further along than the others, its fee-in-lieu-of-taxes ordinance was put on a fast track, with the county council performing a first reading of the ordinance.
The fee-in-lieu-of-taxes agreement tied to TWL’s construction of a new 25,000-square-foot facility in the Palmetto Commerce Park features an assessment ratio of 6%, with millage fixed at 253.6 over the next 20 years. The company has said its total investment in the new facility is approximately $8 million and will create approximately 76 jobs averaging $20 an hour.
The proposed Tenet Healthcare project involves replacing East Cooper Hospital’s current Mount Pleasant facility with a new 140-bed hospital. The project, which still needs to be approved by Tenet’s Board of Directors, represents a $120 million investment.
If the project proceeds as proposed, the hospital would add approximately 200 additional employees to its current staff of 630, with average salaries ranging from $25 to $40 an hour.
The question is whether the Tenet board will allow the project to move forward or opt to support other projects in other communities. County documents said East Cooper officials approached the council about a fee-in-lieu-of-taxes agreement in order to “level the playing field” between Tenet’s competing projects.
Under the deal, the county is offering Tenet a fee-in-lieu-of-taxes agreement featuring an assessment ratio of 6%, with millage fixed at 199.4 over the next 20 years. Tenet will also receive a special source revenue credit equal to 5% of fee-in-lieu-of-taxes revenue to address infrastructure and construction issues. This amount has been capped at $1.11 million.
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.
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