Rock Hill school board demands answers on tax impact of $240M county Costco deal
Rock Hill school board members still don’t have answers on a $240 million distribution center project within the district’s boundaries. They’d like to know why the company behind it, reportedly Costco, would only pay half of the tax amount the school district could expect on a project that size.
York County is in negotiation with a company for something called Project Sample. The county hasn’t named the company publicly, but York County Council members have referenced a report indicating it is Costco.
The project would create 165 jobs. York County is considering a fee in place of taxes, a common step the county uses to bring in large businesses.
The county also is considering an incentive that isn’t as common, with $30 million in infrastructure credits for the company. The company would pay a fee instead of taxes that is lower than what the tax rate would be, then receive money back from that fee for building public infrastructure like roads or utilities.
Tax incentive deals are critical to drawing large companies to the area, county economic development leaders say. That’s especially true when companies may come from states with lower business tax rates, or if they are considering sites in states with lower rates.
“I really wish that corporations would come to town and invest in their school district and the community that they’re in,” board member Lacy Daniel said when the board met Oct. 28. “Educators and administrators are tired of our money being siphoned away, and still being held accountable, still having Band-Aids in place.”
York County Council expects to hold a public hearing on the project when it meets Nov. 17.
Project Sample would generate about $951,000 annually for Rock Hill schools through the fee in place of a tax, county Economic Development Director Mitch Miller told York County Council in October. That’s half of what the district would get if the same project happened without that incentive deal.
For Rock Hill school leaders, there’s frustration that they have almost no role in that decision.
Incentive deal impacts on Rock Hill schools
When businesses pay property taxes in the Rock Hill area, 65 cents from every dollar goes to school operations. York County collects the tax revenue and cuts a check to the school district.
School districts have a say in setting millage rates, but they don’t vote on tax incentive deals for companies.
“The county has that decision-making power,” said school board Chairwoman Helena Miller. “Economic development is part of their fundamental mission. Ours is to educate kids.”
State tax law puts school operations funding on businesses rather than homeowners. Incentive deals for large companies change the math on how much they pay. School board member James Burns owns a family car dealership that doesn’t get incentives if it opens a new dealership and improves roads around it.
“Maybe the County Council needs to come and explain to us why small business carries the brunt of all the taxes in York County, while large businesses get all the benefit,” Burns said.
School board member Pete Nosal has spoken to County Council representatives. Nosal is disappointed the company hasn’t reached out to the school district. Reduced funding for schools is an even bigger concern.
“We need partners in the zone of Rock Hill schools that want to work with our school district, that want to help us educate these kids and produce kids that are ready to go to work for good jobs and good companies,” Nosal said.
Communication issues for schools on tax incentives
The idea of schools only getting half the amount of what taxes should generate supposes that the business would come with the same development plan regardless of it has an incentive deal.
But that’s not the case, economic development experts say. Without an incentive deal, projects are unlikely to locate here and generate new tax revenue.
“If you want an employer to come in, you almost have to compete somewhat,” York County Councilman Watts Huckabee said when his group discussed the project in October.
Because the county negotiates terms and has legal requirements that only so much information can become public, the school district historically hasn’t learned about incentive details until deals are done.
Project Sample has brought that typical way of doing business into question. York County Councilman William “Bump” Roddey called school board members to ask if they’d heard about the project.
Board members wanted to know why they hadn’t.
“We want industry to come to Rock Hill,” said board member Jennifer Hutchinson. “But we also want to know what’s going on when business comes to Rock Hill.”
The school district asked York County leaders or county economic development officials to come to Tuesday’s school board meeting for an update on the project. The county would only discuss it in executive session, school officials say.
Traffic, environmental concern for Rock Hill schools
Tax revenue isn’t the only concern for Rock Hill schools.
The 173-acre site for the Costco project reportedly is near Interstate 77 and Porter Road, near four Rock Hill schools.
York County Council mentioned the possibility of more than 1,000 trucks per day using the new site that will serve 20 locations across the Carolinas and Georgia. A 541,000-square-foot building would open by mid-2027, and could expand to 898,000 square feet, according to the county.
The school district wasn’t part of any traffic or environmental study related to the project, according to the board. Superintendent Deborah Elder has been in touch with the county in recent weeks to offer concerns.
“I did express that,” Elder said of the traffic impact, “and the hope that any sort of traffic study would look specifically at drop off and pick up time.”
For the past decade, big tax incentive deals in York County largely have focused on manufacturing. Distribution hasn’t been a target for economic development due to its relatively lower wages, fewer total jobs and impacts like truck counts on roads.
From its impact on student drivers to the kinds of jobs Project Sample might create for graduates, the Costco project is too big for the school board not to take notice.
“This is a huge potential project that is ultimately on the backs of our kids,” Hutchinson said.
The main focus, though, will remain on the money. “Funding is always at the forefront of our discussions,” Miller said.
