Out-of-Sight State Panel Rubber Stamps $6 Million in Incentives

December 7, 2012

Investigative Reports

Print Friendly, PDF & Email

ApprovedYou already may know that South Carolina spends $896 million annually on economic development incentives, according to figures compiled in a recent 10-month study byThe New York Times.

What you may not know is that figure, which breaks down to 15 cents of every tax dollar or $194 per person, is doled out to companies in part by a group of 11 people at meetings held out of the public eye and, until Thursday, without any media present for at least the past five years.

Operating away from public scrutiny, the S.C. Coordinating Council for Economic Development greases the wheels of economic development through the approval of millions of dollars in grants and other incentives.

At its meeting Thursday, which The Nerve attended, the council approved $6 million worth of new grants for 12 non-confidential economic development projects. That figure doesn’t include the potential millions more involved with 16 additional confidential projects discussed in executive session, or the $2.12 million worth of previously approved grants that now require extensions to meet their requirements for disbursement.

Such is the authority and influence of the powerful council, which meets quarterly at the S.C. Department of Commerce’s offices on the 16th floor of 1201 Main St. across from the State House.

If you’ve never been to a meeting, you’re hardly alone. In a recent review by The Nerve of council minutes dating back more than five years, not a single media member attended any meeting.

And, for at least five years, there was no media present at meetings of a five-member subcommittee of the council known as the Enterprise Program Committee, minutes show. That streak was broken when a Nerve reporter showed up at an October meeting.

Legally required only to post a public meeting notice 24 hours prior to the meeting (they tape an agenda by the elevators on the 16th floor), the only other notification of council meeting dates and times is via an in-house email list.

Established in 1986 by the General Assembly to better facilitate communication on statewide economic development issues, its members are among the most powerful men in state government:

  • Commerce Secretary Bobby Hitt, who, by law, chairs the council;
  • S.C. Ports Authority Chairman Bill Stern;
  • Santee Cooper Chairman O.L. Thompson;
  • Peter Brown, chairman of the Jobs-Economic Development Authority;
  • State Agriculture Commissioner Hugh Weathers;
  • S.C. Department of Employment and Workforce Director Abraham Turner;
  • Nick Odom, chairman of the state Technical College System;
  • Duane Parrish, director of S.C. Parks, Recreation and Tourism Department;
  • S.C. Department of Transportation Secretary Robert St. Onge;
  • S.C. Research Authority Chairman Marco Cavazzoni, a Boeing Co. executive; and
  • Bill Blume, interim director of the state Department of Revenue (Blume, director of the S.C. Public Employee Benefit Authority, is replacing Jim Etter, who is resigning effective Dec. 31 in the wake of the recent massive cyber attack at the Revenue Department.)

While the council operates – albeit legally – in the proverbial shade of meetings the public and media (other than The Nerve) seemingly have no interest in attending, its major financial decisions appear to be made prior to the brief public comment and discussion period required by law.

Tasked to approve or deny requests from all discretionary incentive funding sources, the council appears only to rubber-stamp projects that already have been approved. During Thursday’s meeting, not a single question was raised over any of either the requested amounts or the nature of the projects themselves; and not a single member present voted against any the 35 requests, all of which were approved unanimously with the exception of Stern recusing himself from a $1 million grant request by TD Bank, citing a conflict of interest.

Much of the heavy lifting regarding negotiations of tax breaks and incentive terms for prospective businesses is handled by the Enterprise Program Committee, made up of Brown, Thompson, Stern, Blume and Weathers.

That group, of which Brown currently is chair, meets monthly and presents its recommendations to the council. Because its activities deal largely with confidential projects relating to recruiting new business– as it did Thursday morning prior to the full council meeting – the only part of the proceedings open to the public and media – other than the typically quick votes on the listed projects – are the call to order, approval of previous minutes, motion for executive session (at which time reporters are escorted from the room), motion to come out of executive session, and motion to adjourn.

Following are the non-confidential requests approved in open session Thursday:

Business: TD Bank, N.A.

Source of funds: Closing funds

County: Greenville

New capital investment: $18 million

New jobs: 1,441

Grant amount requested: $1 million

Use of funds: Relocation costs

 

Business: Crescent Dairy & Beverage

Source of funds: Set-aside funds

County: Colleton

New capital investment: $30 million

New jobs: 60

Grant amount requested: $1 million

Use of funds: Purchase and upfit of building

 

Business: Koyo Corp.

Source of funds: Set-aside funds

County: Richland

New capital investment: $130 million

New jobs: 175

Grant amount requested: $750,000

Use of funds: Site preparation and infrastructure

 

Business: Shutterfly, Inc.

Source of funds: Rural infrastructure funds

County: York

New capital investment: $60.1 million

New jobs: 383

Grant amount requested: $700,000

Use of funds: Building renovations

 

Business: Drive Automotive Industries of America

Source of funds: Set-aside funds

County: Greenville

New capital investment: $50 million

New jobs: 99

Grant amount requested: $600,000

Use of funds: Road improvements

 

Business: Haddon House Food Products

Source of funds: Rural infrastructure funds

County: Chester

New capital investment: $3.1 million

New jobs: 100

Grant amount requested: $500,000

Use of funds: Infrastructure (includes clearing and grading)

 

Business: Red Ventures, LLC

Source of funds: Rural infrastructure funds

County: Lancaster

New capital investment: $2.5 million

New jobs: 125

Grant amount requested: $500,000

Use of funds: Real property improvements

 

Business: Physicians Choice Laboratory Services, LLC

Source of funds: Closing funds

County: York

New capital investment: $24 million

New jobs: 364

Grant amount requested: $250,000

Use of funds: Road improvements

 

Business: Pro Towels, Etc.

Source of funds: Closing funds

County: Abbeville

New capital investment: $2.5 million

New jobs: 50

Grant amount requested: $200,000

Use of funds: Equipment relocation and building upfit

 

Business: Ace Bakery, LLC

Source of funds: Rural infrastructure funds

County: Cherokee

New capital investment: $19 million

New jobs: 51

Grant amount requested: $200,000

Use of funds: Building improvements

 

Business: JTEKT Automotive

Source of funds: Set-aside funds

County: Greenville

New capital investment: $120 million

New jobs: 100

Grant amount requested: $200,000

Use of funds: Site preparation

 

Business: AFL Telecommunications, LLC

Source of funds: Set-aside funds

County: Spartanburg

New capital investment: $8,541

New jobs: 95

Grant amount requested: $100,000

Use of funds: Real property improvements

Not present for the Coordinating Council meeting were Blume, Cavazzoni, Parrish and St. Onge. Blume also wasn’t present for the Enterprise Program Committee meeting.

Reach Aiken at (803) 200-8809 or ron@thenerve.org.