Task force considers changing terms for economic development incentives

Task force considers changing terms for economic development incentives
Posted Friday, February 14, 2003 - 4:46 pm

By By Rudolph Bell
BUSINESS WRITER
The Greenville News
[email protected]

A task force appointed by Gov. Mark Sanford to study economic development
strategy may recommend changing the terms for using up to $250 million that the
state set aside for attracting major industrial investment, the chairman of the
task force said Friday.
Lawmakers earmarked the money to pay for infrastructure such as road
improvements that would help make possible major new factories or expansions of
existing ones. But for any of the money to be released, companies must agree to
hire at least 400 new workers and invest at least $400 million.
Those terms are geared for big manufacturers and make it difficult to use the
money for recruiting so-called "knowledge-based" companies, said Clarence
Davis, a Columbia attorney who chairs Sanford's economic development task
force.
Knowledge-based companies, he said, don't typically make initial capital
investments as large as $400 million.
Davis said the task force may recommend legislative changes that will make the
fund more useful for developing the knowledge-based sector — a term that refers
to industries such as biotechnology and computing that employ advanced
technology and a highly educated work force.
"It is an issue which I think is going to be looked at," Davis said.
The task force, which Sanford announced in December, is scheduled to report its
recommendations to the governor and to Bob Faith, the state's new Commerce
Secretary, by the end of the month.
On Friday, Faith said he wouldn't comment "piecemeal" on the panel's work.
"We have been party to a wide range of discussions regarding ways to attract
knowledge-based industries and are eager for this type of innovative dialog to
continue," the Commerce Secretary said in a statement released through a
spokesman.
Brainstorming by the task force "could easily lead to new, break-through
ideas," Faith said. "For that reason it is important that wӪe not comment
piecemeal on the work of the committee except to say, 'Please continue to
challenge the status quo so South Carolina can take a leadership role in
molding a new economy.' "
Faith has said he intends to modify South Carolina's traditional approach of
recruiting conventional manufacturers to put more emphasis on developing the
knowledge-based sector.
Any changes in how the $250 million may be used would have to be approved by
the Legislaure.
Speaker of the House David Wilkins, a Greenville Republican, said Friday that
lawmakers approved the fund with two manufacturing projects in mind: an
expansion at BMW Manufacturing Corp. near Greer and a DaimlerChrysler AG van
plant near Charleston.
BMW announced a 400-worker, $400 million expansion at its plant in September,
but DaimlerChrysler said in October it would put its $750 million plant in
Pooler, Ga., near Savannah.
Since the Legislature had those specific projects in mind when it approved the
$250 million, allowing the fund to be used for recruiting knowledge-based
companies "would be a major change in the policy of what the legislation was
designed to do," Wilkins said.
Still, he predicted lawmakers would "respond positively" if the Sanford
administration decided to seek the change and could "make a compelling case.
"I think the most important thing is we've got a governor focused on economic
development and that's the way it should be," Wilkins said.
To create the fund, lawmakers increased the state's debt limit by one half of
one percent.
Of the $250 million, $62 million has been earmarked — $37 million to build an
interchange along Interstate 85 to accommodate the BMW expansion and $25
million for Clemson University to build a graduate school of automotive
engineering at a proposed automotive research park in Greenville.
The $25 million for the graduate school was allocated as part of the BMW
expansion. The German automaker hopes to recruit talent from the school and has
agreed to donate $10 million to endow professorships.

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