S.C. agriculture agency wants millions for ‘build-it-and-they-will-come’ program

January 10, 2019

Investigative Reports

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By RICK BRUNDRETT

The S.C. Department of Agriculture, which for years has been involved with taxpayer-backed economic development projects, now wants millions to construct buildings statewide in hopes of attracting new agribusinesses.

In his written budget request for the 2019-20 fiscal year, Agriculture Commissioner Hugh Weathers said the agency needed another $1 million to “continue funding agricultural related economic development projects not supported by traditional state incentives,” though he didn’t give specifics.

He noted the agency initially asked for a total of $3 million for this fiscal year, which started July 1, for “agribusiness infrastructure” grants, but “only received $1 million.”

In recent emails to The Nerve, assistant agriculture commissioner Clint Leach said the money would be used to construct “specifically designed food-grade spec buildings.” Generally, a speculative building is placed for sale with no formal commitment from a buyer.

Leach said the department would award funds to a county “with the signed commitment (meeting certain investment and job numbers) of recruiting an agribusiness related company.” If an agribusiness buys the spec building, the county will “pay SCDA back the amount we provided them, in accordance with the agreement,” he said.

Leach added if a building is used by a “non-related agribusiness company, the county must pay back SCDA with interest.” In his budget request, Weathers said the department will ask that grant “recipients (local governments) provide a financial match for the intended project,” though he didn’t give specifics.

Leach in a Dec. 31 email said the department hadn’t yet disbursed any funds, though an application period was planned to “open this upcoming month.” He said applications will be reviewed by “our economic development folks,” and that Weathers will be “directly involved in the process as well.”

Lawmakers appropriated $1 million in recurring state funds and another $210,000 in non-recurring funds this fiscal year for the grant program. Gov. Henry McMaster vetoed the non-recurring money, contending in a written message that it was among a “collection of legislative earmarked appropriations void of necessary transparency,” though legislators easily overrode the veto.

The department’s total budget for this fiscal year, which includes state, federal and “other” funds, is $22 million. Of that amount, $14.1 million, or 64 percent, is designated as “marketing services,” which includes $1.2 million in agribusiness grants, budget records show.

Leach did not respond to a follow-up question from The Nerve about how the funding would differ from rural infrastructure grants awarded to counties by the state Coordinating Council for Economic Development (CCED), an 11-member panel that includes Weathers and is chaired by state Department of Commerce Secretary Bobby Hitt.

The Nerve previously has reported about the secrecy surrounding taxpayer-backed incentives doled out by the council. In 2017, the council awarded more than $6.6 million in rural infrastructure grants to counties for “site preparation,” “real property improvements,” and “building upfit/improvements” for new businesses, according to the council’s annual report.

A Department of Agriculture official also serves on the seven-member governing board of the Rural Infrastructure Authority (RIA), a small but cash-rich state agency created in 2012 to “aid the development of trade, commerce, industry, agriculture, aquaculture and employment opportunities,” according to its enabling legislation. As with the CCED, the RIA board is chaired by Hitt.

The RIA’s website says the agency initially offered grants for water, sewer and storm water drainage projects in rural and “distressed” counties, but programs were expanded to “make grant and loan assistance statewide.”

The RIA’s total budget for this fiscal year is $42.6 million, a nearly 71 percent hike from fiscal 2015, records show. The Department of Agriculture’s total budget grew by more than 12 percent over the same period.

The RIA and Department of Agriculture started this fiscal year with $14 million and $1 million, respectively, in general fund reserves, state comptroller general records show.

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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