- Special Sections
- Public Notices
With the recent announcement of Keer America choosing to locate its new facility in Lancaster County, questions have been raised about the incentives that can be offered to companies (both domestic and foreign) to locate in South Carolina.
The rules covering these incentives for companies that locate here are set forth in state law. These incentives are necessary because of our state property tax laws, which tax industrial property at 10.5 percent as compared to 4.5 percent in North Carolina. Incentives range from fee in lieu of taxes (FILOT) to special source revenue credits. These incentives are available to existing companies or new companies that make a minimum investment of $2.5 million within a five-year timeframe.
South Carolina has been very successful at attracting companies to locate in the state and has for the last two years been No. 1 in per capita foreign investment. The incentives we offer play a part in attracting companies to South Carolina, but our natural resources, inexpensive utilities, our port and competitive labor rates also play a role in getting companies to invest in South Carolina.
After an extensive search process, Keer decided to locate its new textile facility here and joined a growing number of companies that are onshoring manufacturing jobs to the United States. The new owners will make a minimum investment in Lancaster County of $218 million and will create 500-plus jobs within eight years. They received a 4 percent FILOT agreement, due to the size of their investment. Special source revenue bonds will be issued to pay for infrastructure and EDA grants will pay for water, sewer and road infrastructure. If they do not meet their investment or job creation commitment, they will be penalized. They will have to pay back a portion of the incentives that they have received and their FILOT rate will go from 4 percent to 6 percent.
Even with the incentive package offered, Lancaster County will generate a significant increase in property taxes starting from the first year following Keer’s initial investment going on the county’s property tax rolls. Currently, the property Keer is purchasing generates about $67,000 in taxes per year. That first year, the property tax will increase from $67,000 to more than $226,000. Over the 40-year life of the incentives, Keer will pay almost $25 million in property taxes. This is an average of more than $620,000 in property taxes per year, which makes a strong case for why we are excited that they have chosen to build their facility here.
Some of Keer’s reasons to locate facilities in Lancaster County are increasing labor and raw material costs in China, along with higher electrical costs and less than stable electrical supplies, which are increasingly an issue in China. Contrast that to our competitive labor rates, our stable and cost-effective electrical supply and raw material cost. Taking all of this into consideration, a solid business case can be made for locating a facility in Lancaster County. The decision to locate in Indian Land was partly driven by the company’s desire to be close to Charlotte.
Keer Corp. is a financially stable company with sales of more than $500 million last year. Their investment in the United States and, more specifically, here in Lancaster County is designed to increase their sales and profits. The company is buying 140 acres, but will only be use 40 acres for its initial investment. The additional 100 acres will allow for future expansion by Keer or the locating of support facilities or sister companies here. Part of Keer’s agreement is to use ReadySC and SCWorks for hiring its workers. This should allow the opportunity for many of these jobs to be filled by workers from Lancaster County. The impact from the company’s $15 million annual payroll will have a ripple effect throughout Lancaster County.
While Keer, along with Fancy Pokkets from Canada, are welcome additions to the growing companies that choose to call Lancaster County home, they are not the only companies that announced that they were making an investment in Lancaster County this past year. Cardinal Health, Thomas & Betts, Accutrex, Maverick Funding, Red Ventures, DLS Tire, ECN, Van Can, Nutramax, Radco/Surefin, Acadia Health, Duracell, IMS and Fab Fours all announced plans to expand their workforce and/or facilities in Lancaster County. All combined, these companies investments will be more than $363 million and will create 2,365 jobs when they are all completed.
Working together, Lancaster County Council and Lancaster County Economic Development Corp., its employees and board of directors, as well as their business allies, have done a great job promoting Lancaster County. Since 2003, the LCEDC business partners have grown from 30 companies to more than 130 today, making an annual contribution to the LCEDC of more than $120,000 through their payment of membership dues. They also help generate hundreds of thousands in grant funds that help support the county’s economic development efforts.
Increasingly, we compete on a global level when seeking to attract companies to Lancaster County. The LCEDC and its business allies are an integral part of our success. Last spring, the LCEDC was ranked sixth in job creation and 15th in new investment out of the 46 counties in the state. This partnership is obviously paying off for Lancaster County.
Our unemployment rate has dropped to 8.1 percent, down from a high of 18.6 percent. The use of incentives has been instrumental in helping make this happen. Clearly, the citizens of Lancaster County are the winners and will continue to benefit from the use of incentives to help encourage investment by our existing companies, as well as new companies that choose to locate in Lancaster County.
If you have specific questions about the LCEDC and how it works, we encourage you to contact the LCEDC staff by e-mail at email@example.com or by phone at (803) 285-9471.
Lancaster County Councilman Brian Carnes represents District 1.