Sunbelt Rentals would gain tax breaks under pending property deal with Lash Group
Sunbelt Rentals is looking to buy a former Lash Group property and, as part of the deal, inherit a pre-arranged tax incentives deal with York County.
State and local governments use tax incentive deals to attract businesses, bring in jobs, and raise revenue. One such strategy is to allow businesses to pay a lower fee instead of the standard corporate tax rate.
York County Council passed a resolution Monday night, signing off on a transfer that would move 2015 tax agreement conditions to Sunbelt Rentals — if the sale happens. The decision Monday night was part of a consent agenda, or a lumped-together group of decisions council passes without conversation or debate.
In this case, the site is 1799 Innovation Point, and would include almost 11 acres, a three-story office building at almost 175,000 square feet and a parking deck. According to county documents, the property owner, 1799 Innovation Point, would sell the site to Sunbelt by the end of the year.
Sunbelt Rentals has a history of growth in the region. Sunbelt serves commercial, industrial and other rental users as one of the largest equipment rental companies in the country.
In 2016, the company announced it would expand its Deerfield Drive headquarters in Fort Mill with an $8 million investment. Sunbelt since has set up shop in the Kingsley location at 1799 Innovation Point, site of the ongoing deal.
The Lash Group incentives deal
In its 2015 agreement, Lash Group committed to minimums of 2,200 new jobs and $80 million of investment within five years.
Lash Group opened a building in 2016 for 1,600 workers. A second building, in 2018, added space for 1,300 more.
The 2015 fee deal with York County, which has come to include other companies, included 1799 Innovation Point.
The county approved a tax incentive agreement in 2015 with Lash Group and company Kingsley #9. The agreement was modified in 2016 to include Palmetto Funding Company and in 2017 to add company Kingsley #10. A 2018 update added property owner 1799 Innovation Point, affiliated with New York City group Sentinel Real Estate Corporation.
On Monday morning, prior to council’s resolution vote later that day, Councilman Tom Audette said Sunbelt would be able to bring more new business in the area with the move.
“They would be taking over the building, and (Lash Group) met all the qualifications to be able to continue that agreement,” Audette said. “That’s going to allow (Sunbelt) to have the space they need to continue to grow their business, which is a win for the county.”
Relief from earlier agreement
Late last year, Lash Group asked York County to reduce the hiring requirement cited in the terms of the original tax incentive deal. The county agreed to reduce the new job threshold from 2,200 to 1,000 jobs because Lash had more than doubled its promised investment.
As of June 30, county documents show Lash created at least 1,643 jobs and more than $80 million in investment, based on the modified incentive deal. County council agreed to lower the job count last year, allowing Lash to factor in remote work after COVID-19 created hiring challenges. But council members also pointed out Lash Group’s total investment of $167 million.
“That far exceeds the expectation going in,” Councilman William “Bump” Roddey said at the time.
New jobs and overall investment are the main cogs in state and county level tax incentive decisions. Both signal the level of new wealth a proposed project might add to a community.
Roddey said more investment means more tax revenue.
South Carolina companies that invest at least $2.5 million can negotiate agreements to pay fees rather than pay full tax amounts, according to the South Carolina Department of Revenue. Those fees can reduce the revenue paid to the county by up to 40%.
Larger investments and more jobs can mean lower fees for a company.
Fee agreements often last up to 40 years. When they expire, or if investment and job thresholds aren’t met, businesses must pay traditional corporate tax rates.
This story was originally published August 22, 2023 at 1:49 PM.
