HSB Insider's Perspective
By Gary Morris
From an economic development perspective, South Carolina is poised to complete another banner year. In 2017, major manufacturing announcements included BMW, Volvo, Arthrex, and Samsung, among others. Numerous other companies announced new projects or expansions. The pipeline of potential projects remains full at the state and county levels, which will hopefully allow this trend to continue.
It remains difficult for rural areas to attract major projects. However, these rural areas have had great success in landing smaller prospects. These communities continue to invest in product and infrastructure to attract more significant investment. For example, activity along the I-95 corridor has increased significantly, resulting in the development of megasites. Based upon the steps being taken, we believe these rural communities will generate more significant investments in the years to come.
One interesting note is that solar companies appear to target rural areas across the state. These companies bring a different perspective to the rural regions. While the solar farms create very few jobs, the investment side of the equation is substantial. Many of the rural communities are being approached, however, to provide significant property tax relief in order to meet certain cost model parameters established by the companies. From an economic development perspective, the benefits to the rural communities, even with substantial property tax reductions, may very well outweigh the cost. Counties are working to develop parameters for property tax reductions while also addressing decommissioning costs and planning/zoning issues associated with these projects.
Commercial real estate activities this past year have also been extensive. In particular, retail development continues at a fast pace, especially in hot markets such as the York-Lancaster region, Greenville-Spartanburg corridor, and the Charleston/Berkeley/Dorchester area.
Based on the activity we are seeing in both the commercial and industrial markets, the prospects for 2018 appear strong. One key variable is the impact of changes in tax law contemplated by the U.S. Congress on economic development growth. Tax reform could have a profound impact on domestic and international companies and could lead to the repatriation of significant cash holdings abroad. At any rate, 2018 should be a very interesting year, and we look forward to continuing to work with our friends and allies throughout South Carolina and beyond.