Commerce Won’t Release Meeting Minutes of $35.7 Million Grant for Tire Plant

July 11, 2014

Investigative Reports

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TiresOn June 16, Gov. Nikki Haley announced that Singapore-based Giti Tire would locate a $560 million manufacturing plant in Chester County, bringing 1,700 jobs over 10 years.

Less than two weeks earlier, on June 5, the county was approved for a $35,775,000 state grant to “offset the costs of land acquisition and real property improvements to support Giti Tire,” Commerce spokeswoman Allison Skipper said in a July 3 letter to The Nerve.

The Nerve reported last month that the grant amount is larger than the total ratified 2013-14 budgets of 59 state agencies or divisions.

Skipper’s letter was in reply to a June 19 request by The Nerve under the S.C. Freedom of Information for, among other things, copies of any state incentives agreements for the tire plant project. Commerce can’t release those records because, according to Skipper, the agreements have not been finalized – a typical answer given to The Nerve when it requests incentives agreements.

But Commerce won’t even release a copy of the minutes of the June 5 meeting of the state Coordinating Council for Economic Development (CCED), at which the $35.7 million grant likely was approved.

The Nerve previously has reported that the 11-member CCED, made up of the heads or board directors of state agencies involved with economic development, and chaired by Commerce Secretary Bobby Hitt, typically meets in secret to discuss what companies will receive taxpayer-backed incentives – collectively totaling millions annually.

The CCED and a subcommittee known as the Enterprise Program Committee usually hold their closed-door meetings in Commerce’s headquarters on the 16th floor of a high-rise office building across the street from the State House.

The Nerve requested a copy of June 5 CCED minutes under the FOIA but was informed by Skipper in her July 3 letter that the minutes “have not yet been prepared and must be reviewed and approved by the Council at its next quarterly meeting.”

An agenda of the June 5 meeting that was provided to The Nerve lists a Chester County application under the heading, “Confidential Economic Development Projects and Other Legal Issues.” Sixteen other applications, identified only by county and identification number, are listed under that section. The Enterprise Program Committee, which met the same day just prior to the CCED meeting, listed eight Chester County items on its agenda under the section titled “Projects for Review – ‘confidential.'”

In a follow-up email Monday to Skipper, The Nerve pointed out that the FOIA does not require approval of minutes before they are publicly released, noting that under the law (Section 30-4-90(4)(b) of the S.C. Code of Laws), minutes of public bodies “shall be available within a reasonable time after the meeting.” The fact that more than a month has passed since the CCED met on June 5 meets the “reasonable time” standard under the FOIA, The Nerve contended in the email.

Skipper in an email on Tuesday said she would check on the matter but has not responded since then. Contacted Thursday, Bill Rogers, executive director of the South Carolina Press Association, said many public bodies don’t understand the FOIA.

“We run into this a lot,” Rogers said. “The law says a document is public once it is created. The law says nothing about that it must be approved (before being publicly released).”

The Nerve, through its parent organization, the South Carolina Policy Council, is an associate member of the Press Association.

Contacted Thursday by The Nerve, longtime Chester County Supervisor Carlisle Roddey said the CCED approved the $35.7 million grant for the Giti Tire project.

“I saw the amount of money coming through, and I signed it and sent it straight on through,” he said.

Although the county was required to sign the grant agreement with the CCED and Giti Tire, the tax dollars will go directly – likely in increments based on the company meeting certain requirements – from the state to the company, Roddey said.

“It goes straight to the company,” he said, adding jokingly, “If I got $35 million, my treasurer would go crazy.”

Roddey said Giti Tire will use the grant to “buy land and put in a lot of infrastructure” for its planned 1.8-million-square-foot manufacturing and distribution facility in the Carolinas I-77 Mega Site in the county’s Richburg area.

The Nerve first reported in March that the budget-writing House Ways and Means Committee approved putting $37.3 million into Commerce’s “deal closing fund,” though Hitt at the time publicly gave lawmakers no details on why specifically the money was needed. The ratified state budget for this fiscal year, which started July 1, appropriates the $37.3 million to the deal closing fund – $12.4 million from state surplus revenues and $24.9 million from the state’s Capital Reserve Fund, a “rainy-day” fund that lawmakers have raided in recent years.

The “deal closing fund,” or “governor’s closing fund,” or “closing fund” for short, is used by Commerce to get companies to locate or expand in the state. The fund is authorized annually through obscure state budget provisos.

Haley didn’t mention the $35.7 million closing-fund grant in announcing the Giti Tire project. Skipper later revealed that amount to The Nerve; she also said then a $2 million state Rural Infrastructure Authority grant was awarded for the project.

In addition, Skipper said then the CCED approved job development credits for Giti Tire, which are rebates of a portion of employee wage withholdings. Factors affecting the amount of those credits that eligible companies can claim – which can total in the millions over time – include the number of jobs created, the level of wages paid, and the location of the company.

Roddey told The Nerve that Giti Tire also will receive a major break on property taxes through a fee-in-lieu-of-taxes (FILOT) agreement with the county, adding it was his understanding the length of the agreement was in the range of “40 to 50” years.

Asked if he believed Giti Tire deserves to get tens of millions in taxpayer-backed incentives, Roddey replied, “Every penny of it,” explaining that his small, rural county has suffered economically for years with the loss of thousands of textile jobs.

“On incentives, you’ve got to give to get,” Roddey said. “That’s life now in economic development.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.