Downtowns in Rock Hill, Lancaster and Chester would become magnets for new business, if one federal program works the way it's intended.
Those cities combine for eight of the 135 "opportunity zones" S.C. Gov. Henry McMaster submitted last week in an effort to bring long-term investment to low-income areas. The U.S. Department of Treasury first must approve the proposal.
Opportunity zones are part of last year's federal tax overhaul.
Opportunity zones are based on low-income U.S. Census Bureau tracts. Income and other data come from the most recent census estimates through 2015. Governors in each state will submit areas to benefit from federal tax incentives allowing taxpayers to invest in "opportunity funds."
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"This means tens of thousands of folks across every one of our counties will see a brighter future due to a stronger local economy, a surge in job growth and the potential revitalization of entire neighborhoods.," said U.S. Sen. Tim Scott, who led the legislative push for opportunity zones.
Almost half of the census tracts in South Carolina qualified as opportunity zones. McMaster was able to designate only a quarter of the eligible areas. Counties offered input, which was weighed against an area's ability to attract investment. The areas picked by McMaster spread through counties across the state.
“We’re confident that we’ve been able to implement a collaborative approach to designating these communities, with input from local governments across the state, that will eventually mean further private investment and economic growth in the areas that need it most,” McMaster said.
Rock Hill zones
Four census tracts in downtown Rock Hill made the list.
They connect, in the area just south of Winthrop University and Glencairn Garden between Anderson Road and Heckle Boulevard. Knowledge Park and both the Saluda Street and Albright Road corridors are included, as are parts of Main Street and Cherry Road.
Mayor John Gettys said Scott's vision "can and will be a reality" in Rock Hill.
“With the designation of these tracts, we are confident that development activity will quickly follow, proving to developers and others around the nation that Rock Hill is open and ready for business," he said.
Gettys said he expects the designations in Rock Hill to result in new development within two years, at an estimated $400 million of private investment.
The four Rock Hill areas combine for more than 14,000 residents. The unemployment rates range from about 8 to 12 percent, their poverty rates from 29 to 39 percent. Median household incomes range from $14,735 to $32,832.
Lancaster has two zones, running either side of Main Street in the city from just west of Springs Memorial Hospital to U.S. 521 on the east. They combine for 6,808 residents.
The eastern zone in Lancaster has a poverty rate of almost 48 percent, unemployment at 12.5 percent and a median household income at $18,226. Almost 90 percent of the residents there are minorities.
The western zone has a poverty rate at 30 percent and unemployment at almost 11 percent, with household income at $37,100. Minority residents there make up just 39 percent of the population.
Dean Faile, president and CEO of the Lancaster County Chamber of Commerce, said he has a meeting scheduled with city and county leaders Wednesday to discuss what the opportunity zones there may mean for business.
"Obviously anything we can do to springboard investment in that area will only help all of our businesses," he said.
Private investment in the downtown area is "really what we've been missing," Faile said, and the tax incentive may prove to be that needed boost.
"We've got some vacancies in some businesses downtown," he said. "It's hard to imagine a downside to this."
Downtown Chester has two zones too. A zigzag through the city separates them,. from S.C. 9 to Dawson Drive. Armory Road binds them to the north, U.S. 321 to the south.
The northern zone is more than 78 percent minority residents, with a poverty rate at about 29 percent and unemployment at 14.4 percent. Household income is $25,321.
The southern zone has almost 65 percent minority residents, with poverty near 44 percent and unemployment at 6.7 percent. Household income is $17,029.
Brooke Clinton, president of the Chester County Chamber of Commerce, said she followed up with her state senator to see just what the opportunity zones might mean for Chester. She said she's excited and hopeful the incentives might "wipe away some of those overwhelming fears" for would-be business owners downtown.
"I know that's always a hard area in any community to get new investment, and yet it's kind of the heart and soul of most places. It's got the history."
She said that's part of the issue.
"Because they're historic, that means they're old," Clinton said. "It's almost like that initial investment is going to be so much, right off the bat it's overwhelming."
Clinton said she likes how the opportunity zones aim for long-term investment. Money, time in modernizing buildings, parking and other concerns make downtown projects complicated.
In Fort Mill, state and local tax incentives were broadened in recent years to lock in tax rates for decades on historic properties. The result is a downtown with several new restaurants, a brewery and other businesses.
Clinton sees potential for downtown growth in Chester.
Her building was renovated a few years ago from its long-ago use as a bank. A photography studio had its ribbon cutting Monday as Clinton discussed the opportunity zones, while an attorney walked in from a nearby firm that's been in Chester for 80 years.
"There's a lot of potential in these downtown areas," Clinton said. "We've got some folks that have set a good example. So when these new businesses come in they're going to have neighbors who will be happy to have them."