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Economic Development (3 of 3)

Similar goals, differing opinions

Posted: March 22, 2018 6:33 p.m.
Updated: March 23, 2018 1:00 a.m.
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Kershaw County Council members (from left, top) Dennis Arledge, Al Bozard, Chairman Julian Burns, (bottom) Ben Connell, Tom Gardner, Jimmy Jones and Sammie Tucker Jr.

In October, 2011, many in Kershaw County, including then County Council Chairman Gene Wise, anxiously awaited a telephone call that would bear exciting, important news: a major company, Continental Tire, would be coming to Kershaw County.

The call came, but the news was not what was anticipated -- in fact, it was devastating: Continental Tire, along with more than 1,600 jobs and a half billion dollar investment, was instead going to Sumter County.

Missing out on Continental Tire, especially during the painfully slow recovery from the 2008 economic recession, was a heavy blow to bear for Kershaw County. And since that time, the state of South Carolina has announced more than 300 new industry announcements, representing more than 48,000 jobs and more than $10 billion in capital investment. Of those, exactly one new industry has announced it was coming to Kershaw County, representing $5.8 million in capital investment and 25 new jobs.

For the sake of this article, the term “economic development” generally refers to industrial recruitment and retention. The idea is to diversify government/public revenue streams by increasing industrial revenues to help take the burden of funding government services and public amenities off the backs of the individual taxpayers. Ideally, a large company or companies will relocate to Kershaw County and make multi-million dollar capital investments and employ large numbers of people with higher wage/benefited jobs, people who in turn will buy homes, patronize local businesses -- and ultimately add to the revenue base.

While Kershaw County has done better with existing industry expansions, announcing at least 13 since 2010, it has only seen one new industry announcement.

It is that lack of new announcements that seems to have some people asking, “why?”

Review, reassess, refocus

No one, other than those who actually make the final decisions, can truly give an accurate answer as to why a company chooses to locate in a given area. Reasons that are given are varied. Rumors have abounded, but obviously, none of those can be substantiated, although some can make for interesting conversation.

“Why did Continental go to Sumter County? I don’t know that -- maybe they were able to sweeten the pot in some way we couldn’t or wouldn’t,” Councilman Tom Gardner said. “All I do know is that there are a lot of factors that go into those decisions and there are a lot of moving parts when it comes to economic development.”

Councilman Sammie Tucker Jr. said he believes what made the difference in the Continental Tire decision was an alliance of Sumter County citizens, business owners, attorneys, construction companies and bankers.

“A group of them got together and they formed this alliance that they were going to ‘open the doors,’ roll the red carpet out for Continental to come down by make it inviting,” Tucker said. “They went out and sought the property where it was easy for council to access it. No hoops to jump through. A lot of the preliminary work was done by this group -- out of their own pocket -- because they understood the impact Continental would have on Sumter County.”

He said this alliance saw Continental Tire’s potential impact to be similar to DuPont’s on Kershaw County in the 1950s.
Tucker said the Sumter group was similar to the Kershaw County Committee for 100, but formed very quickly and moved very aggressively as Continental Tire courted their county.

“That’s not to say the Committee of 100 doesn’t do good work. I don’t think they get enough credit for things they do,” Tucker added.

Tucker also said a lot of people in Kershaw County like to say that Continental did not come here because our taxes were high, something he called “hogwash.”

“Every county that touches Kershaw County has higher taxes than Kershaw County. So, it had nothing to do with taxes,” Tucker said.

The answer to why Kershaw County has not landed a new industry since 2012 is likely multi-faceted, council members say. For one, economic development is not only a team effort -- the county, entities as the Central SC Alliance and the S.C. Department of Commerce (SCDOC), and elements of the private sector such as the Committee of 100 and the Kershaw County Chamber of Commerce, play roles.

Indeed, the question, “why” may not go far enough.

“Were any of the efforts in the past addressing those things -- and are they now? I think that’s the real question,” Councilman Ben Connell said, referring to criteria industries have listed as prerequisite to their relocating to a given area.

Economic development, particularly major industry recruitment, has many hands and many players. County economic development staff basically receive leads and referrals from the economic development alliances, which work with the SCDOC. Kershaw County pays $72,000 annually to be a member of the Central SC Alliance and while council members overall seem pleased with Kershaw County’s economic development staff and all agree the alliance does good work, some question the need and the expense.

“We do have services being repeated,” Councilman Al Bozard said.

Bozard and others also agree the county could and should revisit functions and expenditures at all levels.

Gardner said he would be interested in revisiting the expenditures the county makes to the alliance.

Council Chairman Julian Burns did note that it is SCDOC’s policy for counties to work through the alliances, but added that the Central SC Alliance does perform valuable services for Kershaw County. He currently serves on the alliance’s board of directors; he is the first Kershaw County Council chairman to do so.

After Continental went to Sumter County, Kershaw County officials brought in consultants to assess its economic development program and prospects. The consultants identified a number of areas the county could revisit. Two key areas they said needed improvement included product -- areas and facilities ready for a company to move in and get up and running -- and the lack of a trained and ready workforce.

Burns makes no bones about his passion for economic development. He ran for election in 2014 on a platform of jump-starting economic development and has stayed focused on that as his main priority.

His viewpoint is straightforward: He believes past councils, for whatever reasons, did not put adequate resources into economic development, which led to fairly predictable results. He credits his predecessor, Gene Wise, for recognizing the need to make changes in the county’s approach to economic development.

“He recognized the needs and began the process,” Burns said. “I have the privilege of stepping in to continue those initiatives.”

Because he believes that past policies were not working, Burns has advocated and worked toward getting the county to make investments in itself. It is a team effort, he said, requiring the support and cooperation of other local governmental bodies, the school district, the business community and most importantly, the public.

“The role of county council is first, to set the conditions for success and to come up with the policies and resources so that staff can be successful,” he said. “The second role is to be the voice and the public face for the county.”

He points to the KershawVision 2030 plan, a guideline for growth, development and anticipated service needs and wanted amenities for the entire county. The plan not only is a detailed guideline for the future, it is an accurate reflection of the will of the people, he said.

Gardner agreed, acknowledging that long term plans are largely works in progress, but pointing out that KershawVision 2030 had so much input -- in many ways was crafted and developed by the public -- from so many people from across the county.

Tucker said he believes council’s role is that of a gatekeeper.

“I take that role very seriously,” Tucker said. “Council sets policy and rules, and we’re the ultimate decision (of) whether a company may come or not come to Kershaw County. What I mean by that is how we conduct business. How we look at growth. Are we anti-growth? Are we pro-growth? Are we responsible growth? They look at all of that. They look at how do we get along with our school system? What’s public safety doing? Do we do enough to make sure citizens are safe? What’s recreation doing? So, it’s not just one element. There’s a multitude of things they look at which county council’s ultimately responsible for. And we also have the power of cutting (crafting) the fee in lieu (of taxes agreements) to make the deal happen, to a degree.”

Councilman Dennis Arledge said he remembers what Kershaw County had to offer prospective industries when he first came on council three years ago, in January 2015.

“Dirt and trees,” Arledge said. “It was pretty obvious that didn’t work. When I ran in 2014, people talked about your normal things -- my road needs paving, ditches need to be cleaned out … but the biggest thing was, and probably more in east Camden in my district than anywhere else, ‘My kids can’t find good jobs in Kershaw County.’ They have to work outside the county; therefore they have to live outside the county. I heard more about jobs than anything else, but it made sense. I looked around, and thought, ‘Wow, other than Chick-fil-A, what’s come to Kershaw County?’”

Arledge became a county councilman the same year Burns became chairman. He said Burns and County Administrator Vic Carpenter presented a “great plan” on economic development -- a plan that departed from the old way of “aggressively waiting on the phone to ring” and would eventually become a $17 million bond council passed in September 2015.

“We hired a consulting group (in 2014) to come back and give us the cold, hard facts. They gave a great presentation and, basically, said … ‘You have no product; you have nothing to look at.’ They’re (companies) looking for faster results. It was kind of in our face that we’re going to have to do something quickly to get the ball rolling,” Arledge said.

Once the decision to do that was made, a vote was taken whereby, 4-2, with one councilman absent, council passed a $17 million bond issue in 2015, the funds to be put to use to improve the county’s industrial parks with water and sewer connections, entrance roads, signage and even, in at least one case, a shell building. The idea was heavily discussed, Arledge said, before the vote.

“It was discussed back and forth to the point that we cleaned it up and said these are the projects and this is how they’re going to be paid, and (hope) we get fortunate enough to land one or two decent sized industries,” Arledge said.

Connell, who was elected to council in 2016, also points to the consultants’ recommendations. For him, however, the quality of life issues are also important factors, both for incoming businesses and their accompanying people and for those who are already here. He said Kershaw County is a good, giving, loving, morally grounded community; indeed those very qualities are what made him want to return here to live, work and have a family. Ultimately, economic development is a means to empower people to have that experience, he said.

“It’s not just about businesses coming in,” he said. “We have a lot of businesses here already that we could and should focus on -- to me, economic development is about ‘how do we improve lives, how do people’s lives become more empowered via economic prosperity? What draws people here, why do they want to live and work here?”

Connell also said he believes government, particularly local government, can and should do all it can to encourage, develop and grow local businesses. He also says he recognizes the importance of what council is trying to do with regard to economic development and is comfortable with the votes he has made regarding economic development spending.

“It seems to me the funds we’re spending are aligning with the needs the industries have expressed,” he said.

A different view

Not everyone is in agreement with some of these decisions. Councilman Jimmy Jones, who during his tenure on council has taken on a role of financial watchdog, said he believes council’s zeal for landing new industry is financially irresponsible. He voted against the $17 million bond in 2015; he has repeatedly brought it up for reconsideration and discussion and urged council to slow down on some of the projects they have approved.

In January, he made a motion for council to finish whatever current capital projects it had started, which represented around $3.5 million, then stop and “test the waters” as he put it. Jones said council could park the money in a bank account until such time as it appeared these initial projects were bearing fruit and either go forward, cautiously, with more projects, or pay off the bond early and save millions of dollars in interest. That motion died without a second.

Jones said he has also consistently voted against increases to the economic development budget and was not in favor of moving the economic development office to larger, newer space in the new Central Carolina Technical College (CCTC) building.

“I see us just throwing more money at it, with no results,” Jones said. “I have proposed a viable and fiscally responsible alternative that was vetted by the appropriate people on staff and was based on the idea of pay as you go rather than going into major debt, and yet we still insist on continuing down this path … people are fed up with wasteful government spending. There is no business I know of that could run successfully the way we run county government -- they’d go broke.”

Jones said he believes council does have an important role to play in economic development and that the county needs to be ready to bring in new businesses, but does not believe many of the recent expenditures and spending increases, especially the $17 million bond, is the answer.

“I am absolutely, 100 percent in favor of economic development, but I believe we need to cut back on our spending,” he said. “We need to do this in a way that takes it off the backs of the taxpayers.”

Councilman Al Bozard, who also questions the bond, agreed.

“The role of council is to take care of the people of Kershaw County first, to look after their interests,” he said. “If that has to be (by) raising taxes, we have to do it -- the people still have to be taken care of. It’s not an easy thing to do, but it’s sometimes necessary.”

That said, Bozard is not convinced that floating a $17 million bond for economic development is the wisest course of action when it comes to taking care of the interests of the citizens of Kershaw County, particularly when those taxpayers will ultimately be the ones who have to pay that money back.

Bozard also is concerned with some of the expenditures within the economic development office and wants council to revisit that budget as well.

Not only is he concerned about the implications of a bond that could ultimately cost around $30 million to pay off, he is concerned about events outside the county’s purview, such as the ongoing SCANA/Santee-Cooper owned V.C. Sumner nuclear power station debacle, that he believes will have a severe and negative impact on economic development statewide.

Bozard was recently appointed to the Fairfield Electric Cooperative board of directors. He said he has been informed that the V.C. Sumner situation is going to cost all the electric cooperatives in the state -- 20 different companies -- around $120 million each. He said a lot of the co-ops have 15-year contracts where they have to buy 65 percent of their power from SCANA and/or Santee-Cooper. With potentially huge rate hikes looming, Bozard believes no company will want to relocate to South Carolina. Therefore, Kershaw County, and perhaps the entire state, may be wasting resources -- such as money from a multi-million dollar bond -- on efforts that are likely to go nowhere due to circumstances beyond anyone’s control.

“I think economic development in the entire state is going to come to a standstill until this situation is resolved. Until that happens, I think our hands are pretty much tied,” Bozard said.

He said he believes Kershaw County has not made any wrong decisions with regard to economic development efforts. He believes the Santee-Lynches Council of Governments, Central SC Alliance and county economic development staff have been working hard for the county. Bozard also acknowledges the intense competition and the fact that other counties and states might be in a position to do more for incoming industries.

But that, Bozard noted, can also be problematic; he believes giving large tax breaks to big outside companies actually brings little benefit to the county at the expense of local small businesses.

“It seems like a lot of the companies we get stay just a few years and then leave us high and dry,” he said.

Instead, county government should spend less time and resources in industrial recruitment and instead tailor its policies to allow local businesses to thrive and grow, he said.

Are we successful?

The question of success depends on who one asks. For some, no new announcements in nearly a decade augers failed effort and wasted resources.

“I believe we need to recognize that throwing lavish sums of money at economic development is not the answer,” Jones said. “It has not resulted in addressing or solving the problems identified more than seven years ago. I believe we can undertake economic development as efficiently as we did prior to this huge increase in spending that has not produced results. We need to look at the economic development budget and economic development spending in the coming year, including spending from the bond.”

To others, the current strategy is not only sound, it is already yielding great benefits. For example, Burns said the CCTC/Applied Technology Education Campus and partnership is a major milestone and vital step in building a trained and ready workforce, which is a top, if not the top priority of new industries. That the county has passed the bond to improvee infrastructure and increase product inventory not only shows progress, Burns said, it sends the message that Kershaw County is willing to invest in itself.

“Remember, we are only two years into it,” Burns said, referring to the bond issue and KershawVision 2030. “We have sought advice from the best experts in the field we can find. We are working with  Commerce and the Central SC Alliance closely, we are working with the Council of Governments and the state and federal delegations. I have personally made two trips in the past month, on my own dime, working on this. I am confident we will be successful, we have planted the seeds -- but it’s going to take a little time.”

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