May 28, 2022

The Nerve

Where Government Gets Exposed

Google project could get part of $150M in state surplus money

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By RICK BRUNDRETT

The S.C. Department of Commerce hasn’t committed to any projects with most of the $150 million in state surplus funds that the agency wants to spend next fiscal year for a new “infrastructure” program, the department’s director told budget writers recently.

Yet Commerce secretary Harry Lightsey, whom Gov. Henry McMaster appointed last June, disclosed to a state House Ways and Means panel that approximately $80 million of the proposed $150 million could be used in part for a Myrtle Beach project tied to internet search giant Google, and another project involving an automotive test track at a publicly owned business park near Greenville.

He also discussed two other projects totaling about $70 million that would benefit corporate giants Boeing and Volvo, the details of which were revealed by The Nerve before the Feb. 1 Ways and Means Economic Development Subcommittee hearing.

Lightsey’s statements about the projects to the three-member subcommittee, chaired by Rep. Leon Stavrinakis, D-Charleston, contradicted Commerce’s written fiscal 2022-23 budget request for the proposed “Strategic Economic Development Infrastructure” program – listed as the agency’s No. 1 budget priority.

In Commerce’s initial $100 million budget request for the fiscal year that starts July 1, which later was amended to $150 million and included in McMaster’s state budget version for fiscal 2022-23, the agency said it needed a different “funding mechanism” than providing incentives on a “project-by-project basis.” The $150 million, which would come out of state surplus revenues, is “paramount to the state’s ability to remain competitive,” Commerce contended in its written request submitted to the S.C. Department of Administration.

Neither Commerce nor McMaster, though, gave any specifics in budget documents about the proposed infrastructure program, as The Nerve pointed out.

Lightsey during the Feb. 1 hearing said about $70 million of the proposed $150 million would be used to relocate a radar facility – a $20 million project – and the entrance road at Charleston International Airport in North Charleston to provide “room for Boeing to expand into the future.”

Those funds also would be used to start construction of a railroad line at the Camp Hall Industrial Park in Berkeley County to serve the Volvo automotive plant, Lightsey said, adding, “Basically, they required and need rail service to that facility.”

The Nerve has reported extensively about the collective hundreds of millions of dollars in taxpayer-backed incentives provided to Boeing and Volvo.

Lightsey in the hearing said the latest Boeing and Volvo projects were “committed to in the past that we are now seeking to fund” – contrary to what the agency said in its written budget request that the $150 million wasn’t intended to be used on a “project-by-project basis.”

The Nerve in January revealed, citing a Commerce email obtained under the state’s open-records law, that a draft of the revised $150 million budget request noted there were “several significant infrastructure-related projects from the prior (Commerce) Secretary’s tenure.”

‘Totally Transparent’

As for the remaining approximately $80 million of the proposed $150 million, Lightsey cited two possible “future projects” that could be funded with the money:

  • A “landing” facility in Myrtle Beach for an underwater cable that Google plans to stretch through the Atlantic Ocean from South America to South Carolina. Google, which has a data center in Berkeley County, announced in November that it was considering Myrtle Beach as the “U.S. landing location” for its “Firmina” underwater cable, which, when completed, would help “increase access to remote medicine and education, make it easier for small businesses to sell products online, accelerate advanced scientific research, and more,” according to a company statement.
  • A “closed-loop” automotive test track, to be developed from an existing straight test track, at the South Carolina Technology and Aviation Center (SCTAC), an automotive, aerospace and advanced manufacturing and technology business park located near downtown Greenville, and co-owned by Greenville city and county.

Lightsey during the hearing said he believes the Google project would “attract companies that desire immediate access and proximity to an internet hub,” bringing tech jobs with “very high pay.” A Google spokeswoman did not respond to The Nerve’s written inquiry Tuesday about whether there would be a spinoff effect in the Myrtle Beach area with the project.

The proposed “closed-loop” test track at SCTAC would “attract many more automobile companies to test vehicles on that track, which would create investment at their facility,” Lightsey told the budget subcommittee.

SCTAC already has received money from Commerce: State comptroller general records show that the agency paid $9 million in general funds in October to SCTAC’s Board of Directors, though specifics weren’t provided.

Lawmakers designated $9 million out of state surplus funds to Commerce for unspecified “infrastructure upgrades” at SCTAC, budget records show. Commerce spokeswoman Alex Clark in an email response Tuesday described the amount as “pass-thru funding” provided by “direct appropriation of the General Assembly.”

According to a document provided Tuesday by Commerce to The Nerve, the $9 million is to be used by major defense contractor Lockheed Martin, which is a tenant of SCTAC, for the construction of a runway “arresting system,” described as “integral to the routine operation of military aircraft from aircraft carrier decks and runways.”

In an email response today, SCTAC president and CEO Jody Bryson said the project will “allow us to support F-16 production and depot work, as well as pursue future fighter aircraft work,” noting that SCTAC is home to Donaldson Field, the state’s “largest non-commercial public airport.”

Although he cited the SCTAC test track and Google underwater-cable projects during his Feb. 1 budget presentation, Lightsey said the proposed infrastructure program would not be “tied to any specific company coming to South Carolina, not to any specific amount of capital investment or creation of specific jobs.” Given that, he explained, any future projects to be funded through the program would have to be approved by “whatever process the General Assembly deemed appropriate.”

Currently, millions in taxpayer-backed incentives are doled out annually by the state Coordinating Council for Economic Development (CCED), made up of the directors or board chairpersons of 11 state agencies, including Commerce, involved with economic development. The Nerve repeatedly has pointed out the secrecy surrounding the CCED, which, by law, is chaired by Lightsey.

The CCED, for example, over the years has awarded millions to large corporations – typically discussed behind closed doors – from the state’s “closing fund,” as The Nerve has revealed. Lightsey told the budget subcommittee that Commerce is seeking an additional $17 million annually for the next three years for the fund; McMaster in his fiscal 2022-23 state budget version proposed allocating the total $51 million at one time to the fund.

Lightsey also told budget writers that with the proposed $150 million infrastructure program, his agency would be “willing to be totally transparent.”

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-3948273 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

Nerve stories are free to reprint and repost with permission by and credit to The Nerve.


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