Big SC taxpayer incentives deal targets Rock Hill 1,200-job project. What to know

A few additional details came out Monday, June 15, on a $1.5 billion pharmaceutical project set to bring more than 1,200 jobs to Rock Hill, including when the manufacturing company behind it will be named.

Company representatives will attend a public York County Council meeting June 29 to share details. A public hearing also will allow people to offer their thoughts before council makes a final decision this summer.

Known for now as Project Palmetto Rock, the corporate headquarters and manufacturing site is planned for a 50-acre piece Palmetto Research Park. That’s the more than 200-acre former Carolina Panthers headquarters and training site off Interstate 77, at Exit 81.

The Panthers began construction there before abandoning the project four years ago amid a dispute with the city about public funding obligations.

Now, Rock Hill owns the research park, but already has two large companies set to buy pieces of it for redevelopment. Along with Project Palmetto Rock, Novant Health is buying 25 acres to build a $300 million medical campus.

Here’s a look at more information on Project Palmetto Rock:

When will we know the name of the company coming to Rock Hill?

County Council passed the first of three votes needed to set up an incentive deal for the company on Monday. The second vote, and a public hearing, will come at a special called meeting on June 29.

“You’ll hear directly from the company about their plans for this project, the proposal,” Miller said. “And that will include them identifying who they are as a company and sharing their name.”

An agenda hasn’t been posted for the June 29 meeting. It’ll likely be held in Council Chambers at 6 S. Congress St. in York. A final county decision is expected in July.

What’s in the tax incentive deal for the project at the old Panthers HQ site?

The standard tax rate for commercial or industrial projects in South Carolina is 10.5%. The fee in place of taxes would cut that assessment rate to 4% for 40 years, Miller said.

There would also be special source revenue credits, or reimbursements to the company from that fee. Miller didn’t give an amount for those credits on Monday and Council hasn’t published them.

Money that comes in from the fee works like it would if it were tax revenue. The standard breakdown is the local school district (in this case the Rock Hill School District) gets 62%, the city gets 24% and the county gets 14%, said Councilman Watts Huckabee.

Project Palmetto Rock is expected to generate $362 million in public fee revenue for those groups over the life of the deal, Miller said.

Is York County giving away $65 million?

Several Council members had already taken calls or seen online posts about York County giving away $65 million of its tax revenue to entice the company to locate here.

York County voted Monday to approve $65 million, but that was for a state incentive grant. The county operates essentially as a pass-through for the state money. There’s no local match required.

“York County is not giving away $65 million,” Miller said. “The state believes in the project enough that they want to put a competitive offer to make sure that they secure this investment.”

Corporate offices and life science manufacturing are the top two priorities in state economic development recruiting, he said, and this project checks both boxes.

Is the Rock Hill biomedical project safe for the community?

Two projects that got county incentive deals have since prompted environmental and public safety concerns among neighbors. Protests have become routine at Council meetings related to solar panel manufacturer Silfab Solar and data center company QTS Data Centers.

At the Silfab site in Fort Mill, the most common complaints involve the use of industrial chemicals beside an elementary school and near homes. At the QTS site in Lake Wylie, neighbors fear a water and power drain.

“I’m not aware of any hazardous chemicals they may be using or are going to use in their process,” Miller said of Project Palmetto Rock. “I definitely think that it’s a much different process than what’s being done at Silfab.”

He will defer to the company for details at the June 29 meeting, and will ask it to prepare information to share on what chemicals they use.

Unlike at Silfab, Project Palmetto Rock is right off Interstate 77 in an area zoned for manufacturing. It’s surrounded on multiple sides by industrial parks. The city and county have talked for years now about putting life sciences projects there.

Miller doesn’t anticipate problems related to the medical component of the new company. “This is not going to be a facility that houses diseases, viruses, things along those lines,” he said. “This is going to be manufacturing products — lifesaving products.”

Does York County have to offer tax incentives?

South Carolina tax law puts higher costs on businesses, particularly for school operations funding, than on homes. That’s why the industrial tax rate is 10.5% here but 4%-6% in North Carolina. Fees in place of taxes are designed to level the playing field when attracting companies.

“We have to be competitive with our neighbors,” Miller said. “Because if they’re looking in South Carolina, there’s a really strong chance they’re going to be looking in Georgia, North Carolina, Virginia, beyond.”

Fee agreements shouldn’t be approved, or they should be options for all businesses, said Councilman Andy Litten. But counties are stuck with them, he said, until state law changes. It isn’t realistic to expect large companies to come to South Carolina without incentives, several Council members said.

“We wouldn’t get a second look,” said Councilman William “Bump” Roddey.

Also, the investment and job projections for companies are tied to the incentives. So tax deals are a way to make sure companies deliver what they promise, or risk losing money.

Why do companies have to be a secret?

State economic development teams typically recruit large projects with nondisclosure agreements. The state generates a project name and passes information to counties to begin tax incentive and other approvals.

“Project names are part of this process,” Miller said. “The best way that I can relate it is that none of you all are going to announce a job change before you actually sign a contract and formalize a deal. Same thing with a company looking to make a decision of where they’re going to put their investment.”

The tradeoff to the secrecy, like with the economic incentives, is the type of impact a large company can have on a community when it comes.

An independent economic analysis on Project Palmetto Rock found it would support more than 2,200 jobs beyond its own projection of more than 1,200 jobs, Miller said.

From construction of the manufacturing site to companies that will do business with Project Palmetto Rock, it can have a lasting impact on area jobs. Then there’s the high wages at Project Palmetto Rock itself, compared to lower wages economic development teams might find if they couldn’t use incentive deals.

“It’s hard at a time like right now for someone to survive off of $13, $15, $16 per hour,” Miller said. “These jobs are significant, and it’s going to provide opportunity for really not just this generation, but future generations.”

So then why all the problems with past York County deals?

While there’s a case for incentive deals, there’s been public backlash on projects like Silfab and QTS, too.

“We are going to do this very differently from what we’ve done in the past,” Miller said.

Incentive deals take three votes. Historically, companies haven’t been named until the final vote, or even after it. So the required public hearing happened without much time, if any, for people to learn about the companies in advance.

Because of public outcry in recent months, Miller’s team has begun giving more information early in the process. That’s why the company hasn’t been named for Project Palmetto Rock, but details are on record for what type of business it is, projected investment and job count, location and related details.

There’s also a push with recent projects to get the name of the company out sooner.

That’s what happened with a Costco site in Rock Hill, when a company official joined Miller in November to details plans for a $240 million distribution facility ahead of two Council votes needed to approve it.

Once projects are approved by Council, there’s typically little the public can do to stop or change plans. That’s even more the case once projects are under construction. The new model of presenting projects aims to give more people an opportunity to vet deals, and Council more information to make its decisions.

“Hopefully those who have concerns will come now,” Roddey said, “versus two years down the road when they’re building.”