PrintPrintCharleston County Council members voted Tuesday in favor of a tax incentive package for the Boeing Co., including plans to issue bonds to give the manufacturer upfront money for construction. Most of the details remain under wraps, however. Officials said that’s because they are still negotiating with Boeing. Some details could be made public before a final vote on the package on Dec. 22.
By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published Nov. 18, 2009
Charleston County Council members voted Tuesday in favor of a tax incentive package for the Boeing Co., but most of the details remain under wraps.
County officials said that’s because they are still negotiating the financial deal with Boeing. Some details could be made public before the third and final vote on the package, scheduled for Dec. 22.
Other details could remain secret, even for a year after they are approved, said Councilman Elliott Summey, who made the motion for the council to approve the incentive package.
Summey said the council is moving ahead on the three required votes before the details are finalized because Boeing is in a hurry to start building its new assembly line plant in North Charleston. The aircraft manufacturer announced it would locate the facility here in late October and plans to break ground Friday.
Some of the county’s incentives would help with upfront construction costs. Others are long-term benefits, such as annual income tax credits.
Charleston County’s incentive package includes special-source revenue bonds and a fee-in-lieu-of-tax agreement with Boeing. Those incentives work hand-in-hand, said Steve Dykes, the county’s economic development director.
A fee-in-lieu-of-tax agreement allows a company to pay a set fee annually instead of ad valorem property taxes. The county can use that annual revenue as debt service for an amount borrowed upfront and made available to the manufacturer for construction costs, Dykes said.
The arrangement is attractive because governments can borrow money at a less expensive rate than businesses, Summey said.
Summey said the fee amount Boeing pays might not be announced until a year after the incentives are approved, and that state law allows that privacy for publicly traded companies.
Another incentive in the county’s package is inclusion of Boeing in a multicounty industrial park. In Charleston County, the designation allows for an income tax credit of $1,500 per job per year, on top of the $1,000-per-job income tax credit offered by the state, Dykes said.
Council members also voted to apply for and accept a $5 million grant from the S.C. Department of Commerce for site preparation work. Dykes said that money was part of the incentive package that state officials previously announced for Boeing.
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Before the council voted, Councilman Vic Rawl asked whether details of the incentives would be provided at a later date. County attorney Joe Dawson told Rawl he recommended an executive session to discuss the “contractual relationship” with Boeing.
Council members met privately to discuss the matter for about 15 minutes before returning to council chambers for a public vote. All nine members voted for the incentive measures, which were described only generally.
The second vote is scheduled for Dec. 8. A public hearing on the matter is also set for that day.
On Dec. 15, the council is scheduled to vote on a resolution by the S.C. Budget and Control Board approving the special-source revenue bonds.
The third and final vote on the incentives is scheduled for Dec. 22.
Reach Ashley Fletcher Frampton at 843-849-3129.
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