In responding to a series of questions about the Central South Carolina MegaSite in Lugoff, as well as a recent editorial published by the Chronicle-Independent, Kershaw County Administrator Vic Carpenter said state funds would be used to purchase the site should the county exercise its option to purchase it.
The C-I had asked Carpenter what would happen if the county decided not to exercise its option after the most recent five-year extension expires in March 2024 and further decided not to extend the option again, essentially dropping its plans to develop the property for industry. The C-I asked if the documents generated through the $1.13 million of work Alliance Consulting Engineers will perform would be retained by the county or the private landowners. $800,000 of that money will come from the county; another $330,000 will come from funds contributed by the state of South Carolina, Duke Energy and Fairfield Electric Cooperative.
Meanwhile, the option extension calls for the price per acre during its first two years to be $21,000, moving up to $22,000 during the extension’s final three years, and states that the option is for the entirety of the more than 1,400-acre property. Whoever pays for the MegaSite would pay close to $30 million if the county exercises the option.
In his initial response, Carpenter said, “The option would be exercised by the state of South Carolina, not Kershaw County, in securing the property for an industry that has determined Kershaw County to be the best location for its facilities. In the event that after five years, such an event has not occurred, the option would be renewed -- as the state of South Carolina has determined that the Central South Carolina MegaSite is the most ready site for large industry in South Carolina. (The) studies and permits would be of no value for any purpose other than a large industry.”
Carpenter’s statement that the state, not the county, would exercise the option prompted the C-I to point out that the land option agreement only lists the county as the optionee, and is signed only by the private landowners, their representatives, Carpenter and Clerk of Council Merri Seigler (as witnesses), and Kershaw County Council Chairman Julian Burns. The state of South Carolina is not listed nor referred to in the agreement, nor does any state official’s signature appear on the document.
Carpenter apologized for not being as clear as he intended.
“Though the option is listed in Kershaw County’s name, when an industry lands here, we will exercise the option. However, the actual purchase will be made using state of South Carolina funds, not Kershaw County funds,” Carpenter said.
This is the first time the C-I is reporting that the state itself would purchase the MegaSite or that state funds would be used by the county to purchase the site, whether in part or in whole.
When the county first announced its intention to negotiate an option with the site’s private landowners in October 2010, the C-I reported the following:
The price tag for the land would come in at approximately $20 million, but (then-Kershaw County Economic Director Nelson) Lindsay made a point to say the county wouldn’t purchase the land if there wasn’t a company agreeing to locate here.
At the time, the county had 310 days to complete its due diligence, which included an environmental study, weapons delineation, endangered species studies, and surveying. At the time, Lindsay -- who is now the commerce department’s director of global business development -- made it clear that the option and the due diligence meant the county wasn’t purchasing the land then, but was only spending money on the studies and surveying work.
At that late October 2010 meeting, Lindsay said that funding sources had already been established through Progress Energy (now Duke) and, potentially, the S.C. Department of Commerce. It was not clear whether he meant funding for the due diligence or the purchase of the site if the county had decided to exercise its option.
A few months later, however, in February 2011, Progress Energy presented a $100,000 check to county officials toward infrastructure development at the MegaSite.
In a separate, but attached response to a recent C-I editorial, Carpenter said, “Kershaw County is not committing to buying land. The county is improving its marketability, which is vital to attract new business. When the land is sold, it will be the state of South Carolina that is buying the land. As they have done with every significant economic development deal in South Carolina for the last 20 years or so, where a land purchase was required.”
The hope tied to the MegaSite is that a very large -- perhaps even billion or multi-billion dollar -- industry will decide to locate in Kershaw County.
Past successes in South Carolina include companies such as Boeing and BMW. In North Charleston, Boeing had already purchased land belonging to two of its suppliers, according to the Post & Courier. In 1992, a combination of the state, Spartanburg County and S.C. State Ports Authority acquired 900 acres of land as part of a $130 million incentive package, according to a look back at the deal by The State in 2014.
Closer to home, in reporting on Continental Tire choosing Sumter for a new plant, the Post & Courier wrote that “S.C. State Commerce Secretary Bobby Hitt said South Carolina put about $31 million into closing the Continental deal. That cash will be used to buy and prepare the site” of more than 250 acres.
That deal, at least, would appear to support Carpenter’s statement that the state has assisted counties in recruiting industry by purchasing or helping to purchase sites to then sell to companies who choose to come to the Palmetto State.
Scope of services
When County Councilman Sammie Tucker Jr. made a motion on Feb. 26 to extend the MegaSite option in exchange for permission to have Alliance perform work relating to engineering studies and obtaining permits, he did so by referring to a 100-acre “slab.”
In his email Thursday, Carpenter said a slab is “a location where the physical plant of an industry can be located. This is normally applied to the actual buildings and facilities that would be constructed.” He said the term “parcel” could be used instead and clarified that neither the county nor Alliance will install any paving or concrete there, but perform “only engineering, due diligence studies, and permitting.”
Carpenter also pointed out that, as early stories about the MegaSite confirm, Alliance has worked on the site before. The firm is first mentioned in a Feb. 2011 story about the county negotiating an option on an 81-acre parcel that was later added to the MegaSite. At that time, council approved awarding a $100,000 “certification” contract to Alliance for wetlands delineation, a wetland survey, protected and endangered species survey, aerial topographic survey, and a final certification report.
Alliance has also assisted the county with a master recreation plan and with a 2015 study of its industrial recruitment efforts along with Parker Poe Consulting. That study’s bottom line: the county needs to invest in itself in order to seriously compete in industrial recruiting.
Carpenter said the county issued a request for qualifications (RFQ) in February 2016 to engineering firms interested in providing services for projects covered by the county’s 2015 $17 million facilities improvement bond. Of the 11 firms that submitted RFQs, the county chose Alliance, “based upon their demonstrated experience in such projects, and track record across the state in completing them,” Carpenter said. “Also, their familiarity with this particular side made them the clear choice.”
Carpenter also provided a copy of a letter Alliance sent to County Economic Development Director Peggy McLean in January outlining the scope of services it would provide for the $1.13 million. Alliance refers to the portion of the MegaSite it will focus on as a “100-acre grading pad.”
In the letter, Alliance Vice President Kyle Clampitt noted that while the site has been shown to industrial prospects “dozens of times” and “finished second on multiple occasions,” it has yet to become the “final destination” for a facility.
What’s for $1.13 million?
Clampitt stated that the scope of services consists of the engineering design, permitting and coordination to construct the proposed building pad improvements. That work would take into account future site fine grading; roadway and water system improvements; wastewater gravity lines, pump station and force main; and rail improvements based on a Jan. 7 conceptual site layout for “Project PoneyExpress,” which was not attached to the copy of the letter Carpenter provided.
Alliance’s work will include:
• Topographic Survey -- in preparation of site grading and construction access roadway, consisting of locating the limits of the construction area, existing improvements within that area and collecting elevation data in 1-foot intervals. It would also include 185 acres within a proposed land disturbance area. The survey’s data will be incorporated into an existing conditions plan to be utilized during the design phase.
• Subsurface exploration -- conduct borings ranging from 25 to 75 feet deep, followed up with site exploration, laboratory testing and a report of findings.
• Construction plans and specifications -- this is where “Project PoneyExpress” is first mentioned by Alliance. In essence, the firm is agreeing to develop schematic construction plans and details for site grading, construction of the access roadway alignment and profiles, storm drainage improvements, erosion and sediment control and site details.
• Permitting -- Alliance is agreeing to coordinate submittal of permitting documents to the county, S.C. Department of Health and Environmental Control, S.C. Department of Transportation, and the U.S. Army Corps of Engineers. This will include various required forms, such as stormwater pollution prevention plans.
• “Take-Off” and Construction Cost Opinion -- Alliance is agreeing to prepare a detailed estimate of the probably construction costs for the proposed improvements.
• Bidding and Award -- Alliance will prepare bid documents to include technical specifications so the improvements will conform to regulations; it will also assist with the actual bid process.
In a statement forwarded by Carpenter, McLean said Alliance’s work will help market the site.
“Having these studies, plans and permits in hand will make our site more attractive to prospects as it will provide assurance that the site is ready for construction and will significantly reduce the time it will take them to start production,” she said. “This will give our site a distinct advantage over other sites.”
Carpenter did not respond prior to deadline Monday to a question of whether “Project PoneyExpress” is merely a placeholder name in Alliance’s documents or is being used as a code name for an actual industrial prospect with whom the county is negotiating.
Response to editorial
In a March 19 editorial, the C-I stipulated that if Tucker’s motion consisted of approving Alliance’s work predicated on obtaining the option extension with the MegaSite’s owners, then a quid pro quo existed whereby the owners were gaining some value from the work to be paid for in large part by the county. The C-I pointed out that the extension agreement itself refers to granting the county permission to have Alliance’s work conducted and the $1.13 million expenditure to do so.
In his response, Carpenter said council’s approval of that expenditure has “no connection” to the private landowners signing the deal.
“These studies and permits will not change the value of the land at all,” he said. “They will, however, increase the marketability of the land, which is the only commitment Kershaw County has made to the owners themselves -- that we will market their land.”
Carpenter said the only reason the option extension agreement mentions the permits, studies and the $1.13 million to pay for them is that the private landowners would have to repay that money should they sell the land themselves to a non-industrial buyer during the five years the studies are valid.
He also said the private landowners have made it clear they are willing to sell the land in one of three ways.
“Either the northern portion, the southern portion, or the entire tract. That has been common, public knowledge from the start,” Carpenter said.
As the C-I detailed in January, the private landowners have stipulated different outcomes from the original agreement through several extensions, including the latest one.
In its earliest iterations, the agreement stipulated what Carpenter laid out: options to purchase portions of or the entire site. In 2016, the private landowners -- in connection with “Project Dragonfly,” which never came to fruition -- got very specific, saying the county would need to buy a single 492.24-acre parcel, plus any other parcels necessary for the project; or all of the property except the 492.24-acre parcel; or the entire tract, which at the time totaled 1,340 acres.
The new option, which went into effect March 12, specifically states the following:
In consideration of the mutual covenants, conditions, and agreements set forth herein which Optionor (the private landowners) and Optionee (Kershaw County) acknowledge and agree, constitute valuable and sufficient consideration, Optionor grants to Optionee exclusive and irrevocable right and option (the “Option”) to purchase the Property in whole as described in Section 3.
The C-I noted the current requirement for the county to purchase the entire tract -- “in whole” -- because of the per acre pricing ($21,000-$22,000) would necessitate the expenditure of between more than $28 million and around $29.5 million.
Carpenter concluded his response by speaking about why the private landowners might want to sell the entire tract and why an industry would need more than just the 100-acre slab, or pad.
“(A)ny developer will tell you that it is impossible to locate a massive industry on a parcel that only includes the footprint of the building itself,” Carpenter said. “In this case that is the 100 acres. Such a facility requires significant parking (not included in the 100 acres), buffers (not included in the 100 acres), roads and access (not included in the 100 acres) and land for future expansions (not included in the 100 acres).
“Also, no owner will allow the sale of a parcel that has been cherry picked of the usable parts, leaving behind valueless land in its wake. So the owner requires that the remaining part (wetlands, orphan tracts and unusable remainders) also be sold with those parts that have value.”