S.C. Pushing Recycling Business; Mum on Taxpayer Cost

February 22, 2013

Investigative Reports

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Appliance WarehouseGov. Nikki Haley was gushing Wednesday as she announced that a start-up recycler of appliances and other electronic waste would locate a $40.6 million plant in Aiken County, creating 200 jobs.

“These things don’t happen by themselves,” Haley said during a press conference at the State House. “We put that in with Team South Carolina, from the local officials at the Aiken County level … all the way up to where we make sure that anything and everything this company will ever need, we will take care of.”

Ben Hirokawa, CEO of Recleim, also wasn’t bashful about the help offered to his recycling company by The Palmetto State.

“The state of South Carolina and Aiken County have been extremely proactive in offering incentives for us to grow our business,” he said during the press conference. “We are confident as we move forward that this strong relationship will continue for our mutual benefit.”

But despite the acknowledgement of taxpayer-funded incentives for the project, no one during the press conference offered any specifics on the taxpayer cost.

When The Nerve afterward asked Haley spokesman Jeff Taillon for details on the incentives, he referred questions to the S.C. Department of Commerce, an agency in Haley’s Cabinet. Amy Love, Commerce’s chief spokeswoman, didn’t respond to a written request from The Nerve seeking comment.

Ronnie Young, Aiken County Council’s chairman, didn’t mention anything about incentives in his remarks during the press conference. Asked by The Nerve afterward about taxpayer-backed subsidies for the project, Young said Recleim likely would be offered a fee-in-lieu-of-taxes (FILOT) agreement, which would significantly reduce its property tax bill, though he couldn’t provide specifics.

Young said he didn’t know anything about state incentives for the project, other than job training offered through the state Technical College System’s “readySC” program.

The Recleim plant, to be located in the 110,000-square-foot former Hickman Mill building in Graniteville, will specialize in “resource recovery from appliances, white goods and electronic waste, and in environmentally sound disposal of hazardous components,” according to a Commerce press release.

Hirokawa said properly recycling one refrigerator or freezer would be the equivalent of taking two cars off the road for a year.

What was different about the press conference compared to typical economic-development announcements was that it was part of a day-long agenda of events at the State House sponsored by a little-known nonprofit organization known as the South Carolina Recycling Council, which goes by the name of “RecyclonomicsSC.”

A board member of the organization spoke at the press conference before and after the Recleim project announcement, and the group had a table there with informational materials. The day’s events also included a group-sponsored luncheon for lawmakers.

The organization’s stated goal is to increase total municipal solid waste recycling from 27.7 percent to 75 percent by 2030, contending that every 10 percent increase creates 2,000 jobs. The state’s recycling industry includes about 450 companies employing nearly 20,000 workers, according to the group’s literature.

“Recycling is a no-brainer,” George Fletcher, RecyclonomicsSC’s executive director, said when contacted Thursday by The Nerve. “It saves water; it saves energy; it saves materials.”

Fletcher is the immediate past executive director of another nonprofit known as the South Carolina Council on Competitiveness, which goes by the name of “New Carolina.” Fletcher told The Nerve that RecyclonomicSC started as a project of New Carolina but officially spun off as a separate nonprofit last year.

Still, RecyclonomicsSC lists the same address as New Carolina, and Fletcher said New Carolina provides staff support for his organization.

In its federal tax returns, New Carolina describes itself as a “public-private partnership working to increase per-capita income and enhance South Carolina’s competitiveness through a cluster development strategy.” It defines “clusters” in its literature as a “group of businesses in a certain region that focus on or service the same industry.”

New Carolina had $1.64 million in total revenues in fiscal 2012, which ended June 30, including $446,022 in government grants, according to its federal tax return obtained Thursday by The Nerve. The only specified government grant to New Carolina that fiscal year was a $39,000 contribution from the S.C. Department of Education.

New Carolina’s total revenues jumped 68 percent from the previous fiscal year, tax records show. In contrast, RecyclonomicsSC listed total revenues of $4,581 for the first six months of last year, according to a financial report filed with the S.C. Secretary of State’s Office.

Fletcher said the Education Department contribution to New Carolina last fiscal year was “pass-through” money for a statewide student engineering-project competition. As for the remainder of the government grants last fiscal year, most of it was a federal grant earmarked to promote small businesses tied to the state’s nuclear industry, he said.

Besides receiving taxpayer funds, New Carolina’s ties to government also include “designated” board seats for the presidents of the University of South Carolina, Clemson University, Medical University of South Carolina and the state Technical College System;  S.C. Sen. Nikki Setzler, D-Lexington; and S.C. House Speaker Bobby Harrell, R-Charleston.

Fletcher said neither Harrell nor Setzler has attended any New Carolina meetings.

RecyclonomicsSC’s nine-member board of directors includes Ronnie Grant, a senior account representative with Sonoco, a global packaging provider headquartered in Hartsville. New Carolina’s website describes Sonoco, which uses recycled content in its packaging products, as the “anchor company” for RecyclonomicsSC.

Grant also is chairman of the S.C. Recycling Market Development Advisory Council, a governor-appointed panel, established by lawmakers in 1993 as part of Commerce, that “tracks the success and growth of the state’s recycling industry and makes policy and program recommendations to the Governor and General Assembly each year,” according to Commerce’s website.

Like New Carolina, RecyclonomicsSC is trying to establish a public-private partnership, according to state records and Fletcher. Its board of directors, for example, includes Donna London, director of the Jim Self Center on the Future at Clemson’s Strom Thurmond Institute.

Fletcher said his organization has 32 members, all of which are companies with ties to the recycling industry, adding he would like to increase the company membership to 75 by July.

Asked if local governments could join his group, Fletcher replied, “We’d love to have them.”

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