by Don Moniak
December 18, 2024

Tuesday night’s Aiken County Council meeting featured an unusual vote of 5-4, the only such vote for all of 2024. 

At issue was the Second Reading of the proposed Fee in Lieu of Taxes* agreement and an associated Industrial/Business Park designation for Project Wisteria (pages 42-91). 

Project Wisteria is a planned $23 million small data storage center to be constructed by an unidentified company and appears to be located on 14 acres along Atomic Road outside of North Augusta City limits (Figure 1). The property is currently owned by DCB (DC Blox) North Augusta, LLC; which purchased it for  $1,588,400 from Riverplace Holding Partnership in November 2024. The area is zoned Urban Development, but does have residential areas within that district.

The data center will involve a single job worth $150,000 per year. 

Council members Kelly Mobley, Mike Kellems, Danny Feagan, and Ron Felder voted against the Fee in Lieu of Taxes (FILOT) agreement. Mobley and Felder openly questioned the need for a tax incentive for a project that will only create a single new job. Mobley also noted that since the facility will be located on “prime real estate,” the company has already purchased the land, and it is not in an existing county industrial park, there is little reason the County should further incentivize the project.

Council Chairman Gary Bunker and Council members PK Hightower, Phil Napier, Andrew Siders, and Sandy Haskell voted for the agreement and the Industrial/Business Park designation. Siders pointed out the “ancillary jobs” associated with servicing the facility added more value than the focus on a single job.

No other Council member put forth an argument in favor of granting the project tax incentive. 

Will Williams of the Western South Carolina Economic Partnership explained that the FILOT payments would be greater for the first five years, but did not explain the structure after that point nor the differences in revenues through the up to 40-year period of the negotiated FILOT agreement (2).

A public hearing followed by the Third Reading of the Project Wisteria FILOT Ordinance is tentatively scheduled for either Council’s January 7, 2025 or January 21, 2025 public meeting. 

Still No Live Stream Broadcast of Meetings

The spirited discussion revolving around Project Wisteria was only observed by meeting attendees because Aiken County Council does not livestream meetings for its citizens to observe County government in action. 

According to a recent report in The Nerve, Aiken County is one of 20 counties, out of 46, that does not livestream County Council meetings. 

Councilman Mobley, who was attending his last meeting as a Council member, has openly advocated for live streaming of meetings for the past year. During the Administrative Committee meeting he again expressed the need for Council to film the meetings, stating that: 

“People are asking to broadcast meetings and see what is going on. People want it, we can afford it, and people will trust us more if we do it.” 

During the public comment portion of the meeting, I asked the audience of approximately 40 county citizens whether they supported live streaming of meetings. An overwhelming majority raised their hand in support.

Footnote

*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) See Page 18 of the County’s $6 million grant application for the proposed, and defeated, House of Raeford chicken slaughterhouse and processing plant project for an example of a FILOT payment structure.