In 1994 lawmakers invested $17 million in Air South. Three years later the company went bankrupt and 700 South Carolina workers were laid off.
In 1997 Marine Energy Systems was promised enormous taxpayer-funded incentives. The company announced the creation of 700 jobs. Less than three years later, the company was bankrupt.
In 1998 Western Star Trucks was offered a massive investment package that included a reduced fee in lieu of property taxes and $25 million in exchange for 400 jobs in North Charleston. Two years later the plant closed.
For two decades politicians gave millions – in cash – to Policy Management Systems Corp. In 2000 the company laid off 700 workers, was bought out, and the new company laid off 550 more.
South Carolina taxpayers have spent more than $100 million on a new “research park” called “Innovista.” Politicians promised it would attract millions of private sector investment dollars. Today, the buildings are unfinished and largely empty.
More than $40 million in state and local tax dollars have been spent in the Midlands alone to develop the “hydrogen economy.” Two hydrogen fueling stations cost $1.45 million. There are only two hydrogen-powered cars in the state, one of which costs more than $100,000.
This preceeding information was provided by the South Carolina Policy Council.
We think everyone will agree that these practices are outrageous. Unfortunately, we don't have to go out of Berkeley County to find similar egregious waste of taxpayers' dollars. All we have to do is look toward the end of Sheep Island Road.
We must go back to 2006 where the story of the "Sheep Island Road Industrial Project" begins. The controlling entities have changed names several times so, to avoid any confusion, we will refer to the only part of the "Project" concerning TBC. A FILOT (Fee In Lieu of Taxes) was executed in 2006. TBC would pay taxes at a rate of 6%, with a Special Source Revenue Credit of 15% of that amount.
On October 12th, 2009, Supervisor Davis executed a document amending this original FILOT agreement. In this new agreement, the SSRC was raised from 15% to 100% for 15 years. Also, in this agreement, TBC would only pay 25% for the final 5 years of the term. In simple terms, this means TBC would pay NO TAXES for the first 15 years.
As if this agreement didn't give away the farm enough, Mr. Davis executed yet another amended FILOT agreement with TBC on December 13th, 2010. In this newest agreement, TBC's tax exempt status was extended to 40 YEARS.
The reasoning was:
Whereas, the County has determined, in anticipation of the expected economic development impact of the Project, that it is in the best interest of the County to further induce the undertaking of the Project by extending the Fee Term, initially established to be twenty (20) years in the Original Fee Agreement, by twenty (20) years for a total of forty (40) years.
These agreements establish beyond question that Berkeley County can expect to get exactly nothing from TBC in the way of taxes for the foreseeable future. That removes any revenue gains from this equation. Now that we know what BC is NOT GETTING from TBC, let's look at what BC is GIVING TBC.
According to BC Resolution R10-03, on the 25th day of January, 2010, BC accepted a grant from the South Carolina State Ports Authority in the amount of Seven Million Dollars ($7,000,000), for the purpose of providing "aid in the construction of a new interchange located at approximately mile marker 197 on I-26." (Sheep Island Road) On the same day, Resolution R10-04 was adopted. This document details a grant from BC to TBC for $2,550,000 "for the relocation, acquisition, installation and other related costs associated with TBC's material handling equipment, generators, security systems, and other equipment." Also, on January 25, 2010, Resolution R10-05 was adopted. This Resolution grants TBC another $4,173,000. In the document, this money is earmarked "to assist with the costs of site work, utility installation (including water, sewer, telecom and electrical service) and engineering and design costs......".
The South Carolina State Ports Authority can legally grant monies to counties for infrastructure projects but is restricted by law from giving monies to private businesses. GE&P interviewed two members of BC Council concerning the coincidental transfers of these funds. We were told that no laws were broken BUT the laws have loopholes big enough to drive a truck through.
Moving right along, on February 8, 2010, BC Resolution R10-08 was adopted. This resolution accepts a $15,000,000 grant from the South Carolina State Ports Authority "to use for the costs of facilitation of construction management and to aid in the costs of construction of a new interchange in support of the County's economic development efforts....". According to this document, this Resolution supersedes R10-03, previously mentioned. At the end of this new document, it specifies the total amount of $15M can be used "for public purposes" even though the description paragraph states the money is to be used for the new interchange.
On February 22nd, 2010, Resolution R10-12 was adopted. This Resolution grants TBC another $2,100,000 "for the construction of certain public roads, including Drop Off Drive and other adjacent public roads."
SCSPA granted $7M to BC and BC granted $6,723,000 to TBC on the same day, 1/25/10.
SCSPA granted to BC an additional $8M, totaling $15M in February 2010 and BC granted TBC $2,100,000 same month.
TBC will pay NO BC taxes for 40 years.
Just when you think this mess couldn't get any worse, there's more. The State Infrastructure Bank had indicated it would contribute $25M toward the new Interchange. Since then, due to reduction in State revenue, they have withdrawn this offer. The town of Summerville offered $5M toward the new interchange because those folks learned two hotels planned to build in the same area. Summerville added one little string to its offer though. They wanted to annex the area into their town so they could get a share of the property taxes and the accommodations tax. Well, BC said, "No way, no how" to that suggestion. So Summerville withdrew their $5M. To add insult to injury, when the hotel companies realized they could end up in a situation where they had to pay taxes to two entities, they pulled out of the deal, too.
Considering the fact that TBC has no BC tax liability and BC has deferred a huge amount of their startup costs, should this economy continue to decline, what is there to deter this company from just packing their bags and leaving the BC and SC taxpayer holding the bag? In a word.......NOTHING.