by Don Moniak

April 19, 2023

At its Tuesday, April 18th public meeting, Aiken County Council approved the third reading of two different ordinances related to Project Sabal and its undisclosed representative Starskey LLC—a project in Graniteville being touted as a $900 million investment with fifty new jobs: 

• One ordinance to “Authorize The Execution And Delivery Of A Fee In Lieu Of Tax (1) (FILOT) And Incentive Agreement By And Between Aiken County, South Carolina And A Company Identified For The Time Being As Project Sabal (The “Company”).” (Pages 9-11 of Agenda Packet)
• The other ordinance “to Develop A Jointly Owned and Operated Industrial/Business Park in Conjunction With Edgefield County.” The industrial park is described in an attachment, but Exhibit A which shows the property is left blank. (Pages 13-15 of Agenda Packet)

The ordinance states the project creates no financial liability for the county and that “the benefits of the Project are greater than the costs;” but no costs in the form of resource or environmental impacts are identified. Only the jobs and investment benefits are listed in the ordinance.

At the last public hearing on the matter four weeks ago, Chairman Gary Bunker declined to answer any questions about costs or even identify the industry involved.

For the final public hearing this week, Aiken-Edgefield Economic Development Partnership Director Will Williams was summoned to answer questions; and informed Council that the Project Sabal “Company,” Starskey LLC, represents a data collection company that is “still doing due diligence on whether they have enough (electrical) power” to establish a new facility in the Sage Mill Industrial Park area. 

So it could be Google, Meta/Facebook, Microsoft, or another major data collection company with nearly a billion dollars to spend. But a nondisclosure agreement prohibits Council from divulging the real company’s name at this time.

Starskey LLC’s agent is Corporation Service Company of Columbia (2), and its legal representative is Nexsen-Pruet of Columbia, a powerful firm which recently merged with Maynard Cooper and Gale to form one of the largest law companies in the Southeast. 

Starskey LLC, via Nexsen-Pruet,  purchased ~560 acres of land from Wyatt Real Estate Investment, LLC (Agent: Weldon Wyatt) in 2022 for $19,299,555.   The property consists of four contiguous parcels adjacent to Bridgestone’s Giant Tire plant to the east and Bettis Academy Road to the west; near the Edgefield County line in the Graniteville area.

When asked how much electrical power is required, and how much water is necessary for the data collection center, Williams responded that 200 megawatts of electric capacity was needed, and that Aiken Electric Cooperative is working with the company to provide its power needs. 

As for the water issue, Williams did not offer hard data, stating only that “the company continues to reduce their water usage over time. In the process they have relocated a water line” in the Breezy Hill Water and Sewer District.

Because of the massive water demands at data centers, Google and other major tech companies are working to reduce water usage at their water-intensive data centers.  At their Douglas Georgia data center Google boasts “we’ve designed an innovative reuse water system to use recycled water for 100% of our cooling needs.” And at their Berkeley County, South Carolina data center rainwater is reportedly collected as a water source for their cooling system.  Williams provided no details of any water conservation measures being proposed at this site.

Aiken County’s deal has similarities to the investments Google has made at its sprawling Berkeley County, South Carolina data center operations since 2007.  For example, Google’s $500 million investment in Berkeley County in 2014 involved: 

• A great deal of secrecy including nondisclosure agreements for elected officials. 
• A holding company called Maguro Enterprises, whose agent was also Corporation Service Company of Columbia; and who paid $17 million for property in Berkeley County.

The latter by itself might not mean much, as Corporation Service Company (2) is the listed agent for dozens of South Carolina LLCs. And it could be purely coincidental that Nexsen Pruit hired Berkeley County’s Attorney Nicole Ewing  in 2014, who had extensive experience navigating that county’s deal with Google.

But the nondisclosure agreement was a contributing cause to Councilman Kelly Mobley opting to vote no on the final reading, as he explained that:

“There is a non disclosure agreement. It is not fair for elected officials to not be able to tell our constituents who this is we are voting on.” 

Mobley had, minutes before, offered the opinions that:

• “We can’t ignore the positive in the economic development, but with that said, we’re being asked to give and approve an unknown. What do we have? A real estate holding company that bought the property, rerouted a water main on Breezy Hill, but are still not willing to tell us who they are?” 
• “I am concerned about the water, we do not know what percentage taken is going to be for water treatment , and we don’t know what the water usage is going to be.” 

Newly elected Councilman Mike Kellums also voted no, saying that “Council should know by the Third Reading what the project is by that time. I will be voting no tonight as well.” 

The final vote was 7-2, with Councilmembers in the majority offering some of the following supporting arguments: 

• Phil Napier: “You can be assured that Breezy Hill (Water) has the capacity for water and sewer capacity if they say they do…These large corporations do not publicize their names while they are negotiating. This county needs more jobs. We can pull the plug if something comes up.”
• Andrew Siders: “Aiken County is not putting one dollar towards this.” 
• Gary Bunker: “This does not commit Aiken County to any costs. It is a Fee in Lieu of Taxes and not a liability.” 
• Sandy Haskell: “They don’t want their competitors to know what they are up to.”

Councilmen Ron Felder, Willar Hightower, and Danny Feagin all voted yes without offering any insights into their vote.

Every Council member supported the project, but only two did not support the continued level of secrecy. The contradictory message from supporters of continued secrecy is that county taxpayers should rest assured there is ample water for the plant, and the county’s wastewater system can handle the outflow; yet nobody can say how much water is necessary and how much impact on county infrastructure there will be. 

Likewise, the “special source credits” mentioned 165 times in the 48-page Project Sabal FILOT agreement are never defined because they remain to be negotiated. While there is no liability incurred by Aiken County, the caveat for the special source credits is that future FILOT payments could be returned to the company, which could deprive the county of expected revenue. This stipulation is listed in capital letters on Page 12:

“THE NEGOTIATED FILOT SPECIAL SOURCE CREDITS AUTHORIZED HEREIN SHALL NOT CONSTITUTE A GENERAL OBLIGATION OF THE COUNTY, BUT SHALL BE A LIMITED OBLIGATION OF THE COUNTY PAYABLE SOLELY FROM THE NEGOTIATED FILOT PAYMENTS RECEIVED BY THE COUNTY HEREUNDER WITH RESPECT TO THE PROJECT.”

The real details of the project’s costs and incentives might never be known. The Post and Courier reported in 2020 that in Berkeley County, the county keeps the financial incentives a tightly guarded secret. Google, and other tech companies, is also “very protective” of its water usage and has applied twice to increase the amount of water it pulls from nearby aquifers to supplement, if necessary, the four million gallons a day it uses to cool its data collection machines.

Footnotes: 

(1) Fee in Lieu of Taxes (FILOT)

The South Carolina Department of Revenue summarizes FILOT as:

“Industries that invest at least $2.5 million in South Carolina may negotiate for a fee-in-lieu of property taxes. This can result in a savings of about 40% on property taxes otherwise due for a project. Certain large investments may be able to further reduce their liability by negotiating the assessment ratio from 10.5% down to 6%. For large investments, the assessment ratio can be reduced down to 4%. The county and the industry may agree to either set the millage rate for the entire agreement period or have the millage change every five years in step with the average millage rate for the area where the project is located. Any personal property subject to the fee in lieu of property taxes depreciates in accordance with South Carolina law, while the real property is either set at cost for the life of the agreement or can be appraised every five years.

A fee in lieu of property taxes is granted by, and at the discretion of, the county where the project is located. The industry must make the $2.5 million investment over a five-year period to qualify. Large investment projects have eight years to meet their increased investment requirements. During this period, all property that is placed in service pursuant to the agreement is subject to a fee instead of ad valorem property taxes. A county may give the industry an additional five years to complete the project and place new property in service subject to the fee. A single piece of property can be subject to the fee for up to 40 years with the county’s consent. The total project can be subject to the fee for up to 50 years with the county’s consent.”

The FILOT rate for Project Sabal is listed as four percent.

In between his terms on County Council and his election as County Council Chairman, Gary Bunker was a popular columnist for the Aiken Standard. in his columns he routinely described Fee in Lieu of Taxes as an industrial tax incentives. In 2013 he wrote that South Carolina’s tax structure: 

“Encourages retirees to settle here, who benefit from low property taxes. Their limited retirement income isn’t greatly penalized by the high income tax.  Conversely, this tax structure is hard on businesses and manufacturing. It encourages fee-in-lieu of tax agreements and special source revenue credits to get around high property tax rates on large industrial developments. In essence, the left hand must undo the damage caused by the right.” 

(2) In a typical loop for shell companies, Corporation Service Company’s listed agent is United States Corporation Company; and the latter’s listed agent is Corporation Service Company. 

Starskey LLC was registered as an LLC in Delaware on March 7, 2021, and in South Carolina on October 24, 2022 prior to its December 7, 2022 property purchase. All that is public are the names of the registered agent: