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Spring 2013

Snarled traffic S.C.’s infrastructure needs attention to keep growth on track

CHANGE SERVICE REQUESTED 389 Johnnie Dodds Blvd. Suite 200 Mt. Pleasant, SC 29464 SC Biz News

Bill McCall: A Passion for Power | Special Section: Cities Mean Business | S.C. Delivers


Table of

Contents COVER STORY 26

Roads and rails, ports and airports:

Updating infrastructure is at top of wish list for S.C.’s business leaders.

34

Rail developments focus of Commerce

Cover and Contents Photos: Trucks and cars clog Interstate 26 in Charleston metro area. (Photo/Leslie Burden)

Feature 18

A passion for power

At Santee Cooper, Bill McCall built energy framework for business growth

Special section: Cities mean business

www.scbizmag.com

Farmers markets sow economic benefits

2

Departments 4 Bill Settlemyer’s Viewpoint

10 Business Accelerator

36 S.C. Delivers

5 Upfront

12 Spotlight: Lexington County

48 1,000 words


®

CEO and Publisher | Grady Johnson gjohnson@scbiznews.com Vice President of Sales | Steve Fields sfields@scbiznews.com

From the

Accounting Department | Vickie Deadmon vdeadmon@scbiznews.com Managing Editor | Andy Owens aowens@scbiznews.com

PUBLISHER

Dear Reader,

Special Projects Editor | Licia Jackson ljackson@scbiznews.com

Welcome to the spring issue of SCBIZ. Since we serve the state’s business community with our biweekly newspapers, the Charleston Regional Business Journal, the Columbia Regional Business Report, GSA Business, and daily email news alerts from each of them, we use SCBIZ each quarter to take a more thoughtful and analytical look at some of the biggest stories impacting the state’s economic landscape. For this issue, our staff photographer, Leslie Burden, risked life and limb to snap the cover photo from an overpass on I-26 near Charleston. If you’ve ever been unfortunate enough to be a pedestrian on one of our state’s interstate highways at rush hour, you know how hairy this can be. So her risk-taking not only produced a cover photo, it also illustrates why infrastructure needs are on the minds of business leaders and why they are focused on communicating the urgency of decisive action this year to our state’s lawmakers. We have built so much economic development momentum, it would be a shame to see it come screeching to a halt because we have failed to keep up with infrastructure needs. Let’s not forget that infrastructure isn’t only about getting our high-quality goods to Grady Johnson is the market, it’s also about quality of life. That’s what has kept us comPresident and Group petitive in the global economic development race. So let’s push the Publisher of SC Biz gas pedal on infrastructure improvements and win this sucker. News which publishes And speaking of infrastructure, check out our profile of Santee SCBIZ magazine, Cooper’s Bill McCall, who has retired after 41 years with the power Charleston Regional company. I think it’s safe to say that South Carolina was pretty Business Journal, much the back woods when Bill started his career. Our remarkable Columbia Regional climb to the global stage can be attributed in no small part to reliBusiness Report and able energy and dedicated South Carolinians like Bill McCall. GSA Business. We continue to emphasize our mission of being South Carolina’s media engine for economic growth by bringing you special sections from some of the state’s most important economic development organizations. In this issue, we feature the Municipal Association of South Carolina with their section, Cities Mean Business. Another important aspect of economic development is assisting individuals and companies who are pushing the innovation envelope. Beginning this year, each issue of SCBIZ will feature a section called Business Accelerator that highlights the important work being done in this arena. I think you will agree that the Applied Research Center in Aiken County is doing its part to keep South Carolina in the race. As always, there is a flood of great topics that need to be carefully poured into an issue, and our special projects editor, Licia Jackson, has to make hard decisions about what she leaves out. The great thing about that is it means South Carolina has a whole lot of good things going on. And I’m a huge fan of good things. Enjoy,

Staff Writer | Chuck Crumbo ccrumbo@scbiznews.com Staff Writer | James T. Hammond jhammond@scbiznews.com Staff Writer | Matt Tomsic mtomsic@scbiznews.com Staff Writer | Lauren Ratcliffe lratcliffe@scbiznews.com Staff Photographer | Leslie Burden lburden@scbiznews.com Contributing Writers | Mary Jane Benston, Holly Fisher Contributing Photographers | Jeff Blake, Andy Owens, Liz Segrist Creative Director | Ryan Wilcox production1@scbiznews.com Senior Graphic Designer | Jane Mattingly production2@scbiznews.com Graphic Designer | Jean Piot production3@scbiznews.com Director of Business Development | Mark Wright mwright@scbiznews.com Account Executive | Bennett Parks bparks@scbiznews.com Event Manager | Kathy Allen kallen@scbiznews.com Audience Development & IT Manager | Kim McManus kmcmanus@scbiznews.com The entire contents of this publication are c­ opyright by SC Business Publications LLC with all rights reserved. Any reproduction or use of the content within this p ­ ublication without permission is prohibited. SCBIZ and South Carolina’s Media Engine for Economic Growth are registered in the U.S. Patent and Trademark Office.

Mailing address: 389 Johnnie Dodds Blvd., Suite 200 Mount Pleasant, SC 29464 Phone: 843.849.3100 • Fax: 843.849.3122 www.scbiznews.com SC Business Publications LLC A portfolio company of Virginia Capital Partners LLC Frederick L. Russell Jr., Chairman

Corporate & Commercial Publishing Division

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Senior Copy Editor | Beverly Barfield bbarfield@scbiznews.com

3


Bill Settlemyer’s

Viewpoint Legislature tables taxing questions

W

www.scbizmag.com

hat has the South Carolina legislature done for you lately? Here’s a list of their accomplishments: OK, I’m done. “Business as usual” in the General Assembly often seems more like no business at all. A good case in point is the lack of progress on restructuring our state’s rickety tax structure. The easy way out, of course, is to set up a study group to produce a report. Such was the mission of the South Carolina Tax Realignment Commission. This group worked very hard to identify the many weak points in our state’s tax code. Their report was issued in December 2010. In case you’re counting, that’s two years ago. Pick a tax, any tax, and the commission found something wrong with what we’ve been doing to raise revenue. One of my favorites is the gas tax. The report said we had the lowest tax in the Southeast and the third lowest in the country, and – surprise! – our level of funding per mile to maintain our roads is also among the lowest in the country. As the commission noted, well maintained roads are important both for mobility of residents and visitors and for economic development. But when you ask a legislator about this, the answer you’re likely to get is, “We can’t raise the gas tax.” Well, yes you can. Go to your desk in the Statehouse. You’ll see a couple of buttons. One of them

4

is marked “yes.” When the bill to raise the tax comes up for a vote, hit that button. Yes, I’m being a bit facetious, but when state legislators cling to the notion that “you can’t raise taxes” for any reason, at any time, no matter how badly the revenue is needed, they are just pushing our low-income state further towards Third World country status. As conservatives like to say, “there’s no such thing as a free lunch.” I agree. And it follows that there’s no charitable organization out

“Business as usual” in the General Assembly often seems more like no business at all. there just waiting for the chance to repair our bridges and repave our roads for free. And what about our state sales tax? Our tax rate was the third highest nationally at the time the report was issued, but it’s a piece of legislative Swiss cheese, full of holes due to more than 80 different exemptions from the tax. The commission recommended repealing or amending more than 60 of them. This is just one of the glaring flaws in the sales tax. You can find the commission’s report online if you want to read all the sordid details. Then there are individual income taxes.

Subscription Information SCBIZ reaches thousands of South Carolina’s top decision-makers. Add your name to the list by ordering a print subscription to SCBIZ. Your subscription also includes SCBIZ

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We are a “low income tax state,” says the commission, and we keep adding exemptions that progressively narrow the tax base. We are also rated as one of the lowest corporate income tax states. We’re doing a great job of shrinking our tax base and a lousy job of generating the revenue we need to invest in our state and our citizens. But the biggest elephant in the room at this point is the labyrinth of laws affecting the property tax, of which Act 388 is the most notorious. Predictably, the commission was not allowed to even talk about Act 388, which has turned the property tax structure into a fiscal train wreck. This law took away local power to tax residential real estate to fund public schools and dumped the responsibility onto the already overburdened and volatile state sales tax. That left local school districts with nowhere to turn for additional school funding except commercial properties. As a result, our “business friendly” state has one of the most anti-business tax provisions you could imagine. Brilliant! The South Carolina Tax Realignment Commission’s report was worth reading when it was issued two years ago. Unfortunately, thanks to inaction on the part of our state Legislature, it still is.

Bill Settlemyer bsettlemyer@scbiznews.com

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Current subscribers Change your address online at www.scbizmag.com or call 843.849.3116.


UPFRONT

regional news | data

Google expanding in Berkeley County

G

oogle will spend another $600 million on a new data center facility in Berkeley County, company and government officials announced Jan. 18. Google’s presence in South Carolina is another feather in South Carolina’s cap, Gov. Nikki Haley said at the groundbreaking. Local and state leaders gathered in an empty field between two data centers Google operates in Berkeley County for the announcement. The company announced the first data center in 2007 and the second facility in 2010. Google has already invested $600 million and created 150 jobs on its campus, and the January announcement brings its total investment to more than $1.2 billion. Eric Wages, operations manager for the data center, said construction will begin as soon as possible. Once operational,

Google will begin hiring security personnel, network engineers, computer technicians plus other supporting staff, but Wages said he didn’t have figures for the number of jobs that could be created by the expansion. Berkeley County and Mount Holly Commerce Park offer Google the right mix of developable land, low-cost power and water systems, community support and other criteria the company analyzes as part of its decisions to expand or open facilities, Wages said. The expansion marks a large step in improvPhoto/Leslie Burden ing Google’s capacity and will support the company’s overall growth, he said. Since 2008, Google has awarded more than $850,000 to S.C. nonprofits and schools, funded and implemented a free Wi-Fi network for the city of Goose Creek and mentored students at Stratford High School.

FAST FACTS | TDL by the numbers The transportation, distribution and logistics industry in South Carolina provides:

40,000 $1.6B 2,500 number of employees in

businesses

Source: www.tdlcouncilsc.org

Cover Story

Page 26

www.scbizmag.com

wages annually

5


Upfront

The

buzz about beekeeping 95%

of beekeepers in S.C. are hobbyists and sell honey from homes, at farmers markets or in retail stores

$25 million cash value of fruit and vegetable crops that bees help farmers produce

25,000 to 30,000

number of bee colonies managed by beekeepers in S.C. Source: S.C. Department of Agriculture For more information on beekeeping, see www.scstatebeekeepers.org or www.clemson.edu

NEW ECONOMIC DEVELOPMENT Announcements made since Nov. 20, 2012 COMPANY

COUNTY

INVESTMENT

JOBS

JTEKT Corp.

Richland

$130M

175

York

$7.5M

N/A

Haddon House Food Products Inc.

Chester

$3.1M

100

Southeast Frozen Foods

Calhoun

$4.5M

10

Chesterfield

$40M

190

Softex Paper Inc.

York

$2M

36

Royce Associates

Cherokee

$1M

25

NCO Financial Systems Inc.

Charleston

N/A

75

Transaxle Manufacturing of America Corp.

Schaeffler Group USA

Sarla Performance Fibers

Colleton

$13.8M

100

Benefitfocus

Berkeley

N/A

300

amFOG Farms LLC

Jasper

$1M

7

Agru America Inc.

Georgetown, Williamsburg

$39.1M

126

Albermarle Corp.

Orangeburg

$65M

20

Millard Refrigerated Services

Charleston

$42M

87

Aero Precision Products

Dorchester

$2.5M

15

SPARC

Berkeley

$11M

310

Time Warner Cable

Lexington

$24M

644

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Canfor Southern Pine

6

Horry

$3.6M

56

Kiswire Inc.

Newberry

$15M

30

Bericap North America

Cherokee

$29M

50

Swift Group of Industries

Clarendon

$3.5M

60

Google

Berkeley

$600M

N/A

Lap Tech Industries Michelin North America

York

$4.5M

60

Anderson

$200M

100

Source: S.C. Department of Commerce

Sonoco to promote Sanders to CEO Sonoco has announced it will promote M. Jack Sanders to become president and CEO of the Hartsville-based packaging company, effective April 1. Harris E. DeLoach Jr. is retiring after more than 27 years with Sonoco. Sanders, 59, is president and chief operating officer of Sonoco and has global leadership, sales and operating responsibility for the company’s packaging businesses. He was elected a Sonoco director, increasing the board to 13 members. DeLoach, 68, is chairman and CEO and has served as CEO since July 2000. He has been a member of Sonoco’s board of directors since 1998 and chairman of the board of directors since 2005. He will remain executive chairman after his retirement March 31.


Strategies needed to cover capital funding gaps ize products and services, and high-growth existing companies with sales between $3 million and $50 million that have problems securing capital to cover cash flow. “Given the macroeconomic environment, we anticipated a mismatch between the types of financing currently available in South Carolina and the financing needs of high-impact firms,” said Dirk Brown, director of the Faber Entrepreneurship Center at USC’s Darla Moore School of Business and

co-author of the study. High-growth companies — those that doubled revenues on average in the most recent four years — are creating most of the new jobs and wealth in South Carolina, the report said. High-impact companies in the state tend to cash out when they reach a valuation of $25 million to $50 million rather than trying to scale up, according to the report. — Staff report

UPFRONT

The financial meltdown caused by the Great Recession continues to hamper fledgling entrepreneurs searching for money to grow their businesses, according to a new study released by the New Carolina Entrepreneurship Task Force. “Access to capital is cited as a primary concern of the top executives for these highimpact firms and is one of the top limitations of their companies,” the report said. Recommendations to address capital funding gaps identified through a survey of high-growth S.C. firms and interviews with financial and business executives are outlined in the report. Those suggestions range from enacting an angel investor tax credit to promoting the growth of equity funds. The report also calls on state economic development agencies, universities and private sectors to develop and “support a more robust and formalized South Carolina business network.” Although the debt and equity markets have constricted in the United States since the 2007-2008 recession, there are two groups of S.C. companies that have been hit particularly hard, the report said. These firms are early-stage technologybased companies attempting to commercial-

Recommendations

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The report offered four key recommendations designed to close the capital gaps that it identified. Those include: • Enact angel investor tax credit legislation. The legislation would provide credits to individual high net worth individuals — those with at least $1 million in financial assets — who made stock or convertible debt investments in new companies. • Increase the annual funding cap on the SC Launch Industry Partnership Fund from its current $6 million level. The fund, managed by the SCRA, is widely recognized as a source of financing for high-impact ventures. • Provide matching funds for selected Small Business Innovation Research Phase II grants in order to attract federal funding for the commercialization of technology in S.C. firms and attract out-of-state technology-based companies to move here. • Revise the state’s investment adviser registration/examination requirements to promote the growth of the equity funds in the state.

7


Upfront

Check your car’s safety kit If your job involves travel by car, it’s important to be ready for emergencies on the road. Even on a short trip, you can find yourself stranded for several hours by inclement weather or mechanical breakdown, says Justin Tomczak, a spokesman for auto insurer State Farm.

To make sure you’re prepared, here are some items to keep in your car’s trunk: • Jumper cables • Spare tire • Hazard triangles/road flares • Flashlight • First aid kit • Water • Blanket Check these items a couple of times of year to make sure they are working properly – something most people don’t do. Also, always travel with a fully charged cell phone and in bad weather, make sure the car’s fuel tank is at least half full. Source: State Farm

TWENTIES

Editor’s note: Incorrect photos were published with profiles of two Roaring 20s winners in the winter 2012 issue of SCBIZ. Here are the correct photos with their profiles.

JMC Charleston

www.scbizmag.com

Charleston Imaging Products, Inc.

8

1315 Ashley River Road • Charleston, SC 29407 www.charlestonimaging.com Total number of local employees: 28 Top local executive: Sean P. Mummert Product or service: Digital signage, MFPs, print management, network integration, data management, office furniture and service engineers Year founded locally: 2004 Company bio: Charleston Imaging Products has locations in Charleston and Orangeburg. The company has made three acquisitions over the last 10 years beginning with Advanced Cartridge Technology. Next was JBN office equipment in 2008, for copier repair and other office equipment service. The most recent in 2012 was Automated Business Systems Inc., with concentration in office furniture and equipment. What is the main driver of this year’s revenue growth? Innovation with digital signage solutions and networking multiple devices to work together.

2220-B Old School Drive North Charleston, SC 29405 www.jmccharleston.com Total number of local employees: 5 Top local executive: Mitchell Crosby Product or service: Event production and design; destination management services Year founded locally: 2004 Company bio: JMC Charleston is a full service event production and design company offering destination management services, located in Charleston. Founded in 2004 by Mitchell Crosby, JMC in its first year produced the 1,000-person gala dinner for the Patriots Point Foundation atop the flight deck of the USS Yorktown during the Ravenel Bridge Fireworks celebration and the opening of the Lacoste Charleston store. JMC Charleston has designed events for national corporations such as IBM, PricewaterhouseCoopers and Amica Insurance.


Percentage of Workers Who Work from Home

UPFRONT

MARKET FACTS S.C. Metropolitan Areas, American Community Survey, 2005 and 2010 (Civilian employed age 16 and older) 2005 Metropolitan area

Estimate

2010 Percent

Estimate

Percent

Anderson

1,330

1.8

2,433

3.2

Charleston-North Charleston-Summerville

6,730

2.5

11,619

3.9

Charlotte-Gastonia (N.C.)-Rock Hill

26,188

3.6

40,876

5.1

Columbia

6,857

2.2

11,380

3.4

Florence

2,437

2.9

2,581

3.3

Greenville-Mauldin-Easley

6,312

2.4

8,510

3.1

Myrtle Beach-N. Myrtle Beach-Conway

3,490

3.2

3,232

2.8

Spartanburg

2,507

2.1

3,016

2.5

392

1

811

2.1

Sumter

Source: U.S. Census

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9


Business accelerator

Business Accelerator

Applied Research Center puts S.C. on the hydrogen map By Holly Fisher

www.scbizmag.com

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hen progress is made in the area of hydrogen as a viable fuel source, Fred Humes knows Aiken may very well have played a role in the early research and development. Opened in September 2006 as the Center for Hydrogen Research, the facility was renamed last year as the Applied Research Center to better capture the breadth of work being done in its laboratories. “We had the concept at the time that if we were to bring together scientists and researchers with the private sector, we would be able to develop a technology base in hydrogen, and we were able to do that,” said Humes, director of the Applied Research Center. Hydrogen is the lightest and most common of elements. It is found in nature, in water and in many compounds. When properly harnessed, it can provide a safe, clean and unlimited supply of energy for all of the world’s basic energy needs, according to the ARC website. So researchers are honing in on looking for ways to produce and store hydrogen while manufacturers and engineers are developing the infrastructure needed for handling and transporting hydrogen. When the center opened, its flagship tenant was Toyota. The automotive company worked on fuel cells and hydrogen research for four years at the ARC. Now Toyota is one of five automotive companies planning to roll out fuel cell vehicles in 2015, Humes said. Gary Stooksbury, chair of the Economic Development Partnership, said it’s exciting to be able to say, “We were there” as they watch R&D done in Aiken come to life in vehicles and other developments. The ARC, Stooksbury said, has “put Aiken on the map in the United States and around the world.” From day one, the center has been a collaboration of private business and

First known as the Center for Hydrogen Research, the Applied Research Center sits on 300 acres.

er,” Humes said. “That’s the whole model.” The work being done at ARC won’t be finished overnight. This is high-tech R&D that can take years to yield tangible results. But, as Humes noted, the research will have long-lasting implications. “What we’re seeing in (hydrogen) forklifts, stationary fuel cells and in automotive … that is technology that is lasting and will be around for a long time,” he said. “It will help our energy independence and national security for the country.” About 80 people work in the 60,000-square-foot facility and the space is full. Humes said he has one 500-square-foot lab left. Sitting on 300 acres, the center has plenty of room to grow, so now it’s just a matter of determining what’s next and the best method for growth. What is clear is that in a period of six years, Aiken put the state of South Carolina on the international stage in the area of hydrogen and fuel cell research. “When we began, our name recognition in the industry was literally zero,” Humes said. “Now South Carolina is considered among the top five states for hydrogen R&D.”

government entities, including Savannah River National Laboratory, Aiken County, the Economic Development Partnership of Aiken and Edgefield Counties, and the University of South Carolina Aiken. The Savannah River National Laboratory uses half the center for its researchers and scientists. The other half is reserved for private companies. One such private business is Greenway Energy, which consults on and participates in fuel cell research, development and education projects. In August 2012, Aiken County and Savannah River Nuclear Solutions LLC announced About this artic a $3 million expansion plan to add 6,435 le: Across Sout h Carolina, en trepreneurs an square feet of lab and support space to the d fledgling busin esses are quietly getting expert assistanc ARC. The expansion called for six new labs e from business accelerato rs, or incubato to support the growing advanced materials rs. From Bluffto to Walhalla, or n ganizations ha ve opened busiresearch at the Savannah River National ness accelerato rs to provide ph ysical space, services and ex Laboratory, including work in the areas of pertise to help ho me-grown st ar tu ps. There are 20 nuclear energy, solar energy materials, maincubators open state at presen in the t, by the Depar terials for wind and marine energy systems tment of Commerce’s count. Some organiza and carbon dioxide capture. tions, such as South Carolina Research Auth ority and Clem “We have the capability within our son University Research Foun dation, operate more than one. county and state to leverage the technolSome focus on a particular segment of busin ogy coming out of the (Savannah River) ess, such as man ufacturing or digital techno National Laboratory, and our incubator logy. In each iss ue of SCBIZ, we’ll feature on e of these busin is that focal point where we bring the ess accelerators. We star t with the Appl researchers and private sector togethie d Research Center in Aiken County.


county spotlight

Lexington

Lexington County is a rapidly growing neighbor of Columbia.

LEXINGTON COUNTY

Business climate and teamwork fuel robust growth in Lexington County

W www.scbizmag.com

hen Lexington County native Lou Kennedy was deciding where to build a new pharmaceutical manufacturing plant, she soon found out there is no place like home Kennedy, CEO of Nephron Pharmaceuticals Corp., was all set to put the plant next to one of the company’s facilities in Orlando, Fla. Frustrated with the permitting process there, she started talking to leaders in Lexington County, where she found an ideal site and a business-friendly regulatory climate. Today, Nephron’s $313 million project is under construction in an industrial park in Lexington County near the intersection of I-77 and I-26, where high-paying jobs await an initial 300 employees who will be trained using the readySC program.

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Special Advertising Section

Lou Kennedy, CEO of Nephron Pharmaceuticals Corp.


County Administrator Joe Mergo said cooperation among governments and county departments is extremely important in dealing with businesses. “When the companies come in, it’s not such a laborious process for them to be able to understand all their plan reviews, all their document reviews, all their permitting and all of the ordinances. We do a great job of putting a team together that walks with potential developers and says, ‘This is your project team that’s going to manage your project for you and make it happen seamlessly.’”

Columbia Metropolitan Airport, located in Lexington County, is an asset for economic development.

County Spotlight: Lexington www.scbizmag.com

“I cannot underscore how expeditious and wonderful it was to work with the state and county authorities on the permitting process. I’ve never seen anything go smoother,” said Kennedy. Nephron is located in Saxe Gotha Industrial Park, which is a certified site where water, sewer and natural gas are readily available. Nephron also benefits from the easy access to rail, which will drastically reduce the cost of transporting materials to the plant. Lexington County is enjoying a bumper crop of economic development and sowing seeds for plenty more. From 2008 to 2012, Lexington County had more than $1.1 billion in aggregate announcements involving new and existing industry. Of the 26 announcements, 18 were expansions and eight reflected industries new to Lexington County. The success is a reflection of the commitment of Lexington County Council to economic development. With the success of 18 expansions within the past four years, Lexington County’s Economic Development Department aims to encourage and advocate the development of existing industry, through its industriNow Program. “The goal of this Business Retention and Expansion program is to call on existing businesses to thank them for their tax base and employment opportunities for its citizens. industriNow is designed to address company needs, offer products and services available through utility providers, the state or institutions of higher learning,” said Chuck Whipple, director of Economic Development. He also indicated that the county plans to make room for more companies by expanding Saxe Gotha, improving its industrial park in BatesburgLeesville and developing a new technology park in Chapin. It should be noted that energy giant and Fortune 1000 company SCANA has its headquarters, which were developed in 2009, in Lexington County. County Council Chairman Bill Banning, Economic Development Committee Chairman Johnny Jeffcoat and Whipple are leading efforts to attract companies engaged in manufacturing, technology, health care, agribusiness, advanced materials, nuclear energy, distribution, aviation and aerospace.

Special Advertising Section

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County Spotlight: Lexington

Above: A rendering shows Nephron Pharmaceuticals , a $313 million project.. Left: Construction is progressing on the Nephron plant, shown in December 2012.

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Michelin employs more than 2,000 workers at its Lexington County site.

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Beyond the county’s business-friendly climate, government and business leaders name plenty of other amenities for prospective companies and residents. Industries have been attracted by the county’s utilities, location, workforce, educational systems and job-training assistance. Quality-oflife assets include highly regarded public schools, attractive suburban neighborhoods Special Advertising Section

and Lake Murray. Peter Sutton, manager of Michelin’s $1 billion-plus site in Lexington County, said, “The availability and the quality of the people that you can bring on to the workplace are of primordial importance.” Michelin employs more than 2,000 workers at the site, making tires for passenger cars, light trucks and earthmovers. The

company’s arrival in 1981 was a watershed event for the county. Michelin was the first big company landed by Lexington County, which had previously been known for its agrarian lifestyle and suburban neighborhoods, forcing most residents to commute to Columbia for employment. When Michelin’s corporate development leaders in France were considering the latest round of investments in the Lexington site, Sutton said, “their biggest area of questions was about people. ‘Can you get the right amount of people? Can you get the right skills in the people that you hire to fuel this expansion?’” Factory jobs aren’t what they used to be, as manufacturing today is a hightech environment that requires a high level of competence. “Machines don’t make tires, people make tires.” Michelin works with the county’s two largest school districts and Midlands Technical College to help build what Sutton calls the “supply chain for technical talent” that the company needs to keep growing. He said the quality of the public schools also has become “a strategic competitive advantage” in recruiting employees. Sutton said that when people search for jobs, they also check websites that rank schools. He said he thought that if someone were hesitating between two job locations, he or she would choose Lexington because of the school system. The tire manufacturer has partnered with schools in a number of ways, for instance, contributing to a “STEM lab” that focuses on science, technology, engineering and math at a local middle school. In


County Spotlight: Lexington

another school program, engineers from the Michelin plant conduct Lego robotics events for students. Sutton, a French Canadian who has worked in numerous locations in North America and Europe, said the quality of the work environment and other amenities in Lexington outshine those enjoyed by workers in almost every plant he has seen, with the possible exception of a site at the foot of

the Italian Alps. While the employees of the largest plants number in the thousands, the county’s largest employer by far is Lexington Medical Center (LMC), which has about 6,100 employees. While it is a relatively young health care organization (Lexington County Hospital was established only in 1971), its growth has been remarkable. Mike Biediger, president and CEO, said LMC performs

more surgeries than any other hospital in the region and operates the largest nursing home in the Carolinas. Its innovative satellite offices operate in six outlying communities, with services including urgent care, radiology, laboratory and physician services. LMC’s larger satellite offices also offer outpatient surgery, cardiac rehabilitation and physical therapy. Lexington Medical Center is also

www.scbizmag.com Special Advertising Section

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County Spotlight: Lexington

Flamingos welcome visitors to Riverbanks Zoo and Garden in Lexington County.

At top, the Lexington Country Club offers residents a place to relax and play golf. In bottom image, a rendering shows Lexington Medical Center’s occupational health office, which will be located near Saxe Gotha Industrial Park.

planning a new occupational health office, which will be located near SCANA’s headquarters and the Saxe Gotha Industrial Park. This new health office will offer employee physicals and pre-employment drug tests, treat workers who are injured and consult with companies to promote worker safety. Biediger thinks the new center will be unique. “We can’t find anything like it in the country.”

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Fueling the fire

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As large industries locate in the county and more people arrive, a wide variety of businesses are benefiting. Glenn Martin, a communications company executive based in Gilbert, said that during his year as chair of the Greater Lexington Chamber of Commerce and Visitors Center, he attended close to 80 ribbon-cuttings for a whole gamut of enterprises – everything from people leaving the corporate world to open their own businesses, to new restaurants coming to town, to lawyers opening offices to do real estate closings. Special Advertising Section

He believes a primary reason for the county’s robust growth is the local schools. He calls them “an economic catalyst,” echoing an often-heard opinion. All of the expanding sectors feed on each other, Martin said, and big businesses like Amazon and Nephron “fuel the fire of growth” and provide a new source of customers for existing businesses. Martin’s company, part of the Rock Hill-based Comporium, has been doing business in Lexington County for about 110 years. It is the former Pond Branch Telephone Co., and it provides telephone, cable television, Internet, security and wireless services. Albert Bueno is president of another homegrown business, GIS (formerly a part of PMSC, a Columbia insurance software company), which offers corporations background screening, recruiting, hiring and onboarding solutions. With close to 525 employees at its Chapin headquarters, Bueno said, GIS has grown more than 500 percent over the last 10 years. He said Lexington County has been supportive of the

company in many ways, as they successfully recruit employees on the basis of the local schools, quality of life and the cost of living, along with what Bueno and other leaders refer to as Lexington County’s “jewel,” Lake Murray. As for the business that was Lexington County’s mainstay for so long – agriculture – it’s still thriving. In 2009, products from local farms brought in nearly $147 million, with Lexington ranking No. 1 in cash receipts among South Carolina’s 46 counties, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service. Lexington County’s population grew more than 21 percent between the 2000 and 2010 censuses, and it had reached 267,129 in 2011. “By 2020 we’re looking at a population over 300,000 people,” Mergo, the county administrator, said. County leaders hope to be ready for this continued rapid growth. “We’re doing everything we can to plan for it.” Charlie Compton has been Lexington County’s planning director since 1974, after graduating from Clemson University. Early on he was impressed by some of the county’s accomplishments, one being the implementation of a countywide fire and ambulance service. His reaction was “Wow, they’re doing something right here. Something good’s happening here.” Compton, who said he’s “almost” a native of Lexington County, having lived there since he was 5 years old, appreciates the quality of life afforded by Lake Murray and other assets. However, it’s the diversity of


County Spotlight: Lexington

choices that really appeals to him. How the government has dealt with diversity is what has kept Compton in the job, as he said school-driven suburban growth is typical in any part of the country. For him, the exciting part of the process has been that county leaders “have been willing to do whatever it takes to deal with diversity. You don’t have to do the same thing all over the county. You can have different rules and a different approach depending on what’s needed where, and they’ve embraced that very successfully.”

Looking ahead

Agriculture is still an important part of Lexington County’s economy. The harvest from Walter P. Rawl farm provides fresh produce across the state.

all of these institutions to aid in developing the 21st century workforce. “Businesses need employees who think critically, communicate effectively and are accountable for their performance. Our goal, by partnering with these institutions, is to ensure that the residents of Lexington County are able to

satisfy those business requirements!” said Whipple. A spirit of opportunity prevails here, an inner-connectivity that cultivates – everyone working together for a common cause – which makes this a great place to live, work and play.

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Council Chairman Banning said the county needs “more product,” as it is called in the economic development world. “We need more options for other companies to join our great county.” Referencing industrial sites, he said that the county has to have the infrastructure in place, as incoming companies are ready to go. “They’re not going to wait on you to run water and sewer lines.” In 2006, Lexington County Council decided to fund its first ever industrial park. Council realized that the land they had offered for a State Farmers Market site would make a great industrial park to attract new industry to the county. Realizing this, they approved a $13 million bond issue to acquire the site and install the public infrastructure. The result was attracting the massive Amazon, Nephron and SCE&G projects. Two sites remain in the park today. Additionally, Lexington County Council decided that tax revenue from all countyowned industrial parks should be shared by all five school districts, instead of going only to the districts in which the parks are located. Leaders say that arrangement is unique to Lexington County, but as Jeffcoat says, sharing is only fair since all of the taxpayers participate in the capital expenditures for the parks. According to Whipple, Lexington County leaders are now turning their attention to workforce development, one of the drivers of economic development. Education at every level – primary, secondary and post-secondary – is crucial in the economic development process. It will be the role of

Special Advertising Section

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Photo/Leslie Burden 18

www.scbizmag.com

FEATURE


Passion

for

Santee Cooper COO looks back on 41 years By Lauren Ratcliffe, Staff Writer

A

ccess to power can make or break business deals and Bill McCall knows that better than most. During his 41-year tenure at Santee Cooper, the engineer-turned-executive oversaw the construction of power plants that not only attracted major business ventures but fueled growth and led to prosperity in many parts of the state.

19


FEATURE McCall took the utility from 700 megawatts of generating power to a capacity of more than 6,000 megawatts. “If you look at where we were at Santee Cooper to where we are now, it’s really mind boggling what we’ve been able to do,” he said. “It’s really a neat thing.” McCall recently retired from his position as chief operating officer with Santee Cooper, the state power giant. Among the industries Santee Cooper was instrumental in recruiting was Alcoa, in the late 1970s. Part of luring the company was a guarantee that their power needs could be supplied. Lonnie Carter, Santee Cooper’s CEO and a longtime colleague of McCall, said Alcoa asked McCall how quickly he could build a power unit. His response and confidence were enough to help solidify the deal. “He said he could build it in 34 months,” Carter said. “(Bill) got a note put on his desk saying to build it in 30 months — and he did it.” Building generating capacity was just one of the challenges McCall faced in his work. In the late 1980s, a destructive hurricane came calling.

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When ‘the entire system went blank’

20

Winds racing at 160 miles an hour and a five-foot wall of water blasted the Charleston Harbor on Sept. 22, 1989, wiping out power lines, destroying trees and devastating infrastructure. The days that followed Hurricane Hugo’s landfall in South Carolina were to shape and define McCall’s career with Santee Cooper.

Top left: Atlantic House Restaurant at Folly Beach before Hurricane Hugo. Top right: The aftermath at the same site after Hugo passed by. Bottom: Satellite image of Hurricane Hugo. (Photos/NOAA)

McCall said the aftermath of the hurricane was a milestone because of the energy he spent helping rebuild and restore part of the state’s electric grid. “The entire system went blank,” he said. “We had to get out and examine and survey all of our damages and bring the system back. Nobody had lights.” Working day and night for three straight days, McCall and his team surveyed damage and began to rebuild, virtually from scratch, three small systems in Moncks Corner, Hilton Head and Myrtle Beach. “We tied those systems together later,” he said. “It was an amazing thing; in two weeks we had everybody back (with power) who could receive power.” Trees knocked out by the storm gave McCall a chance to innovate and save the state money. The disposal of wood was restricted by the State Department of Health and Environmental Control. “I came up with a little scheme we devised using conveyers to burn the wood,” McCall said. “I was able to burn wood chips in the boilers and burn all of our wood chips out over a year; that was free fuel in place of coal.”

Carter said McCall’s calm approach in the aftermath of Hugo was typical of the way he led on any project. Carter, a coworker for 30 years, said rather than becoming overwhelmed, McCall created a plan and executed it.

Humble beginnings, family sacrifices McCall joined the energy company the same month he married his wife: August 1971. In those early years, McCall worked as an engineer with the company and rose through the ranks to become a manager of engineering and construction. He assumed that position in 1977 and quickly found himself faced with the formidable task of building the power unit for Alcoa. McCall remembers building that plant, and the sacrifices it meant for his thenyoung family. “I was trying to be a father to two children who were 1 and 3 years old,” he said. “By making such a commitment (to work), I gave up a lot of things.” He credits the ability to make those sacrifices to his wife, Claudette. “I felt like the job was demanding so much,” he said. “The wife and I had an understanding that if she would see me through that part of the job, then I wouldn’t play golf. I would give her all the time I had outside of Santee Cooper.” He called the sacrifices required for building the plant for Alcoa one of the most significant in his life. “That probably ended up being one of the most challenging commitments I’ve ever been associated with from a personal and


Facing challenges, expanding the fleet After Alcoa officials announced they would be coming to the Lowcountry, McCall set out to build the power generators they would need. After that, every time new power plants or systems would be

FEATURE

professional standpoint,” McCall said. McCall recalls knowing his limited family time wasn’t enough for his wife but said he feels the sacrifice was worth it. “I was not the husband I should have been,” he said. “It wasn’t because I didn’t want to be.” McCall was a workhorse and as he continued to grow the fleet and earn promotions within Santee Cooper he expected the same work ethic from those around him, whether he supervised them, or the reverse. “I worked with Bill, I worked for Bill,” Carter said. “Bill was the same. He always treated me with dignity and respect, even when I was greener. “He was a great person to work for, a great person to work with and a great person to supervise.”

Earthmovers push mounds of coal at Santee Cooper’s Cross Generating Station overlooking Lake Moultrie. The coal, delivered by rail, powers the station’s steam turbines to produce electricity. (Photo/Andy Owens)

negotiated, McCall would be consulted as to the feasibility of a project. “I always knew if I went to Bill and said ‘Can we do this?’ If he looked at me and said, ‘Yes’ I never worried about it again in my negotiations,” Carter said. McCall is credited with the building of the modern fleet of power generators and plants. Carter said the construction of four Winyah stations and four Cross stations were under his supervision.

“Bill is directly responsible for building all those units,” Carter said. “That constitutes the modern generating fleet that Santee Cooper operates today. He did every bit of it on schedule and under budget.” And, as with the Alcoa deal, many power plants were built on extremely tight deadlines. Carter joked that he often sold the power plants before they were fully planned. “We were always putting him behind the eight ball,” he said. “Bill never backed up

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21


FEATURE www.scbizmag.com

22

Bill McCall led construction of the power plant needed by Alcoa, whose plant is shown here. (Photo/Leslie Burden)


Leaving a legacy

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McCall grew up in rural Berkeley County and remembers watching the landscape of his county change. He graduated from Macedonia High School and said many of his classmates had never even been into Charleston. When he told them he wanted to be an engineer, they didn’t know what that was. When the opportunity came for him to stay close to home and work with Santee Cooper, McCall said he saw it as a chance to give back and change his community’s future. “I’ve been able to be a part of seeing people receive electricity. (I’ve seen) people get better jobs, seen families be able to send children to college. I’ve seen the quality of life grow over time.” McCall said he watched 90% of the company’s power units be built during his time with the company. Not only did the generating capacity increase exponentially, but the customer base grew rapidly. McCall said when he started, the company served 20,000 customers. Today, more than 166,000 customers statewide receive their energy from Santee Cooper. McCall said he hadn’t thought much about what type of legacy he would leave with his retirement. But Carter said his work ethic and demeanor with all he encountered will likely last even longer than the memories of him will. “Bill was always expecting your best,” Carter said. “If you were always giving it your best you always had his support — his unwavering support. Even if things went bad he was right there standing up for you. “I have really enjoyed working with Bill McCall; I, personally, miss him.” McCall hoped to be remembered for the relationships he built with the people who had come to be like a second family. “I hope at the end of the day that I have given back to the people and to the company and to the people of South Carolina enough to show them thank you,” he said. “I’ve been very blessed to work as an engineer … and I’ve been able to work in the boardroom area. “It’s been a lot of fun.”

FEATURE

from a challenge because he knew how important it was for the people we were trying to serve — for the state of South Carolina.”

23


Cities Mean

Business A p u b l i c at i o n o f t h e M u n i c i pa l As s o c i at i o n o f S o u t h Ca r o l i na

Markets go metro

Farmers venues add value

Incubating ideas Clemson University helps cities with startups

|

Issue 1

|

2013


You see a police car‌

We see a police officer who works closely with fire departments and EMS, who knows every business owner downtown, who can name every city street and who buys 12 snow cones on Saturdays even though his T-ball team has never won a game. www.CitiesMeanBusiness.org


Contents 14 To Market, To Market Cities find farmers markets enhance local economy By Reba Hull Campbell Cover: Mount Pleasant Farmers Market (Photo/Ryan Wilcox)

Cities Mean

Clemson works with cities

8 Driving into the future

A publication of Municipal Association of South Carolina

to support small tech

Pioneer projects power

businesses

vehicles with electricity

1411 Gervais St., P.O. Box 12109 Columbia, SC 29211 803.799.9574 mail@masc.sc www.masc.sc

By Amy Geier Edgar

Business

Miriam Hair Executive Director, Municipal Association of SC Reba Campbell Deputy Executive Director, Municipal Association of SC Editorial staff Mary Brantner Contributing writers Amy Geier Edgar Published by

6 Incubating Ideas

By Amy Geier Edgar

10 Shared Vision

Public and private

12 Cities Roll Out Bike Friendly Initiatives

investment key to

Make parking convenient

successful downtowns

and cyclists will come

By Reba Hull Campbell

By Mary Brantner

Features

Cover Story

DepartmentS 4 Letter from the Editor

By Reba Hull Campbell

www.scbiznews.com

A publication for the Municipal Association of South Carolina

5 Infrastructure Builds Cities and Businesses

By Mike Brenan

www.citiesmeanbusiness.org | Cities Mean Business 3


Letter from the

editor

Thank you for reading this issue of Cities Mean Business magazine. This issue marks our fifth anniversary of publication in partnership with SCBIZ magazine. In these five years, we have used this publication as a way to drive home the importance of the relationship between South Carolina cities and towns and the businesses located in them. Strong cities and towns are the backbone of our state’s economic success, and Cities Mean Business celebrates the positive and forward thinking partnerships that make our state stronger. In this month’s issue, our guest columnist is Mike Brenan, chair of the South Carolina Chamber of Commerce. He focuses on the importance of having adequate and safe infrastructure for the transportation of goods and commerce in our state. But transportation means more than just roads and bridges. Read about two transportation alternatives several cities have focused on to improve economic development and the environment: improved parking availability for bicycles and increased use of electric vehicles. Three South Carolina cities have partnered with private business and Clemson University to launch new small business incubators. Read about how Bluffton, Rock Hill and Hartsville are using Clemson’s research university expertise to help entrepreneurs be successful in their hometowns. Cities and towns around the state are seeing the economic value of supporting the startup of farmers markets in their communities. Not only do farmers markets give local vendors the chance to sell their wares directly to the consumer, but the markets also enhance the local tax base, keep dollars in the local economy and give vendors low-risk business opportunities. Finally, get a glimpse of how three diverse downtowns have found their individual success formulas for attracting and retaining businesses.

Reba Hull Campbell rcampbell@masc.sc

Editor 4 Cities Mean Business | www.citiesmeanbusiness.org

A publication for the Municipal Association of South Carolina


working relationships

Infrastructure Builds Cities and Businesses By Mike Brenan

Our cities and towns are the lifeblood of the

Mike Brenan

Another type of important infrastructure is our

Palmetto State. As we live and work in these won-

workforce. Employers continue to cite the need for a

derful communities, we strive to make them as eco-

skilled workforce as one of their top priorities. This

nomically competitive as possible. The relationships

infrastructure investment is paramount to increased

between cities and businesses are key to fostering

per capita income and economic development. There

success, and more often than not, our goals are closely

is no doubt that cities with the highest levels of edu-

aligned. One shared goal is clear: Cities and busi-

cated citizens will have the advantage in attracting and

nesses depend on reliable infrastructure – of all types

creating jobs. The business community supports ini-

– to thrive.

tiatives that will transform – not just reform – the cur-

The most obvious infrastructure is our road and bridge network. Our families, friends and employees

rent education system to compete in an ever-changing global marketplace.

depend on reliable and safe roads, and employers de-

This begins with a shift in focus from the later

pend on them to move goods. South Carolina has not

years of education to early childhood. South Carolina

been keeping up with needed maintenance and im-

must target at-risk children, starting with children

provements though, and it is evident in every home-

living in poverty. At the foundation is reading. Busi-

town across this state.

ness communities are stepping up to send employees

Consider this. South Carolina’s population has

into the classroom to read to children. This is just one

increased by more than one million over the last two

small way we can partner with our local schools to

decades, but our infrastructure has not seen a dedi-

improve the quality of life in our communities. There

cated revenue increase since 1987. While we spend

are many more.

an average of $15,000 per mile on our roads, Georgia

Together, we are making South Carolina a better

spends $35,000 per mile, and North Carolina spends

place to do business, but we cannot rest. We must

more than $150,000. With other states focused on

continue to engage and advocate for proposals that set

financing infrastructure to drive economic develop-

us apart from our competitors, beginning with ad-

ment, our policymakers must make infrastructure

dressing our infrastructure needs.

financing a top priority in 2013. This includes priori-

tizing expansion of Interstates 26 and 85 through the

Mike Brenan is president of BB&T, South Caro-

key corridors as well as secondary road maintenance

lina, and the 2012-13 chairman of the South Carolina

to drive economic growth and job creation.

Chamber of Commerce.

Average amount spent per mile on roads South Carolina

$15,000 $35,000

Georgia

$150,000

North Carolina $0

$25,000

A publication for the Municipal Association of South Carolina

$50,000

$75,000

$100,000

$125,000

$150,000

www.citiesmeanbusiness.org | Cities Mean Business 5


Clemson University works with cities to support small tech businesses By Amy Geier Edgar

A

s the owners of Greenbug Inc., an

The center, a 501c3 organization, reports

ecofriendly pest control company,

to a seven-member board appointed by the

Louise and Dan Hodges face many

Bluffton Town Council that works in coop-

of the same challenges as other small busi-

eration with the Clemson University Institute

ness owners. Yet there are a few differences.

for Economic and Community Development.

For one, this Beaufort couple has a team of

It is designed for small and medium-sized

Clemson University graduate students doing

cities, building local partnerships to diversify

bug research for them.

economic development, according to Karl

How can a small business have the back-

Kelly, director of commercialization and

ing and resources of a major research institu-

technology incubation in Clemson’s econom-

tion? The Hodges’ business is one of an in-

ic development division.

augural group of companies in a technology

“We’re able to use our many resources

business incubator program created through

across Clemson to help these companies

a public/private partnership among Clemson,

develop,” said Kelly, adding that the program

the Town of Bluffton, Care Core National

hopes to help establish 15 to 30 companies

and Buckwalter Place, along with additional

a year.

private sponsors.

In addition to getting help with research,

Greenbug Inc. is one of nine businesses

Louise Hodges said she’s received input on

in Bluffton’s Don Ryan Center for Innova-

her business plan, and legal and financial

tion, which opened its doors in May 2012,

advice from the program.

according to Director Jordan Berliner. The center’s program provides business space

Greenbug for People is one of Greenbug Inc.’s products coming out of the Don Ryan Center in Bluffton.

and resources to help entrepreneurs, inven-

“If I, as a small business owner, had to pay for all these services, I couldn’t do it,” she said. Bluffton Mayor Lisa Sulka was a strong

tors and small business owners be successful.

evaluation, product development services,

The incubator program assists small business

seed financing, business mentorship, corpo-

owners with intellectual property, technology

rate relationships and recruiting.

6 Cities Mean Business | www.citiesmeanbusiness.org

advocate for bringing the center to Bluffton. “One of the town’s goals is to enhance economic development,” Sulka said. “With

A publication for the Municipal Association of South Carolina


an average age of 32 in the Town of Bluffton

The incubator is a three-year pilot pro-

and an ever growing population in our high

gram with five communities, Kelly said. Rock

school, we need to look for ways to bring

Hill currently is developing a program, and

jobs to our area and train our workforce for

another will launch in Hartsville later this

the companies moving to our area. Having

year.

Clemson University’s presence in our town

Rock Hill plans to select businesses for its

opens the doors to the world in terms of

incubator in the coming months, said Ste-

knowledge and expertise in the economic

phen Turner, executive director for the Rock

development arena. This, along with USC-

Hill Economic Development Corporation,

Beaufort just minutes away from our town,

adding that a number of promising busi-

makes us the perfect location for this innova-

nesses have expressed interest. Rock Hill, the

tion center.”

RHEDC, Winthrop University, York Techni-

The center’s success already has been recognized throughout the region and state, said Bluffton Town Manager Anthony Barrett.

cal College and private partners are involved in running the program. The goal, Turner said, is to get a few small

“Many of the innovators are close to launch-

technology-based businesses to grow into

ing their businesses and products. As a com-

larger businesses that eventually will create

munity, we are all better off and have been

more jobs for people in the area.

served well and will continue to be served by

Having Clemson as a resource is a tre-

the center,” he said. “Not only is it an idea

mendous plus for the program, said Rock

whose time has come; it is a working and liv-

Hill Mayor Doug Echols.

ing example of how true entrepreneurial spirit works in a public-private partnership.” Sulka said she expects the innovation

“I know the results in Bluffton have been positive, and I expect an equal amount of enthusiasm in our community,” Echols said.

center will have a large impact on the town

“This is a piece of our continuing effort to

and region.

make Rock Hill a great place to do business.”

“My hopes are that these innovators will

The Duke Energy Center for Innovation

leave the center and open their businesses in

in Hartsville will be in a downtown store-

Bluffton or the surrounding area,” Sulka said.

front that the city will provide at no cost.

Barrett said the center demonstrates the

The Greenbug Injector System uses an existing irrigation system to distribute Greenbug for Outdoors so that anywhere water is directed becomes safely pest free.

“Fostering economic development in the

The city will also hire a director to manage

communities we serve is a critically impor-

town’s commitment and attitude toward eco-

the day-to-day operations of the incubator,

tant mission for Duke Energy,” said Mindy

nomic development.

and has already assembled a diverse board of

Taylor, Duke’s community relations manager

directors. 

for eastern South Carolina. “I can’t think of a

“The town views this initiative as more than an incubator; it is letting the entire

Mayor Mel Pennington says the incubator

better place than Hartsville to bring this pro-

world know we are serious about economic

partnership is a huge win for Hartsville and

gram, and we think it will pay dividends for

development,” Barrett said.

the city’s efforts to bring jobs to the com-

the community for years to come.”

“The synergy and word-of-mouth chatter around the state and beyond about the Don

munity.

One unique asset Hartsville can draw on

“Jobs, jobs, jobs – that’s the single most

is the students at the Governor’s School for

Ryan Center has created a robust ‘economic

important thing in any community. We’re

Science and Mathematics who will be able to

state of mind,’ which is just as important as

utilizing our diverse assets to create a unique

get involved in the incubator. “We have the

the ‘Bluffton state of mind,’” he said. “It is a

environment that will attract the types of

brightest kids in the state right here in Harts-

harbinger of great things to come in develop-

companies that most cities aren’t focused on.”

ville,” Pennington said. “This is exciting for

ing companies as well as creating opportuni-

The ability to bring the incubator pro-

ties for true economic development here and

gram to Hartsville comes from a grant from

the partnership with Duke Energy and the

in the region.”

the Duke Energy Foundation.

Governor’s School.”

A publication for the Municipal Association of South Carolina

the City of Hartsville, and we are thankful for

www.citiesmeanbusiness.org | Cities Mean Business 7


Driving Future into the

By Amy Geier Edgar

T

he cities of Greenville and Seneca are introducing electric vehicles locally in pioneering projects that are being

hailed by leaders as beneficial to the environment and to economic development. The City of Seneca received a $4.1 million grant from the Federal Transit Administration to replace all of its diesel buses with electric buses built by Greenville-based Proterra, the leading maker of zero-emission commercial transit solutions. Officials hope to have the buses running in tests by the spring, according to Ed Halbig, director of Planning and Development for the City of Seneca. The fare-free buses, which are operated by Clemson Area Transit, travel three routes in Seneca, taking passengers to work, school, shopping, dining and the hospital. They help

The electric WeCar in Greenville is a membership-based car sharing program for providing an eco-friendly way to get around.

Seneca was one of 46 innovative transit

and can scale them to size to meet their own

cut back on traffic congestion and are widely

projects selected to help cut the nation’s

used by the community, serving 24,891 pas-

dependence on oil and create a marketplace

sengers over a 20-day period in November

for 21st century green jobs. Projects were

the solution to get us off the imports of for-

alone, Halbig said.

selected through the FTA’s Fiscal Year 2011

eign oil,” Halbig said.

It takes about 10 minutes to recharge each bus when the battery is exhausted. Two

Sustainability Initiative.

“We’re excited to see if we can be part of

The City of Greenville also is working to

As the nation’s first all-electric transit

recharging stations are planned – one at the

system, Seneca’s program is getting atten-

downtown transit hub and one at the central-

tion from around the world. The hope is that

ly located Oconee Medical Center property,

larger cities can see how these electric buses

Halbig said.

can make their communities more efficient

8 Cities Mean Business | www.citiesmeanbusiness.org

needs, Halbig said.

be part of the green solution. In September, the Environmental Protection Agency awarded Greenville a

A publication for the Municipal Association of South Carolina


Community Action Award for its Electric Vehicle Ecosystem Pilot Program. The program – through a partnership with the City and County of Greenville, General Electric, Enterprise Rent-A-Car, Greenville Spartanburg International Airport and Thurso Power System, among others – aims to provide local businesses and residents with access to electric vehicles and a network of charging stations. The EV program introduces electric vehicles into the marketplace for short-term use at several companies and rentals at Enterprise and the airport. Enterprise also launched its membership-based car sharing program, WeCar, in downtown Greenville using EVs. WeCar is a unique, membership-based car sharing program for people who are looking for an alternative method of transportation and provides downtown office tenants, residents and hotel guests with the convenience of a cost effective, responsible and eco-friendly way to get around. Users pay only for the hours used and the rate includes all maintenance and insurance. Along with the vehicles, the EV program includes approximately 45 charging stations throughout the county, with more than 20 of them in the downtown area (including city garages), according to Greenville Governmental Relations Manager Julie Horton. The EV Ecosystem Program seeks to improve air quality and decrease the city’s gas

Top: Electric buses will travel three routes in Seneca, taking passengers to work, school, shopping, dining and the hospital. Bottom: There are approximately 45 charging stations throughout Greenville County, including more than 20 in the downtown Greenville area (including city garages).

dependence, carbon footprint and carbon

we talk about sustainability, it’s about more

tion and job creation; it’s about cleaner air; it’s

dioxide emissions.

than just saving energy. It’s about making good

about a longer-term process to make Greenville

“This program continues the city’s long

business decisions in an era where every dollar

greener and more livable for its citizens,” ac-

history of public-private partnerships. When

must be stretched; it’s about leading in innova-

cording to Mayor Knox White.

A publication for the Municipal Association of South Carolina

www.citiesmeanbusiness.org | Cities Mean Business 9


Haynsworth Sinkler Boyd is returning to its roots with a new building on Greenville’s Main Street.

Shared Vision

Public and private investment key to successful downtowns By Reba Hull Campbell

G

reat downtowns don’t just happen.

the 1970s. Downtown Greenville has emerged

years ago, later moving to several other loca-

They are the result of vision coupled

with a strong mix of residential, retail and of-

tions around the city. In January, the firm’s

with public and private investment

fice, and a pedestrian-oriented Main Street. 

office moved back to Main Street.

and collaboration. Three South Carolina business leaders in

Anne S. Ellefson, managing director of

“The decision to move back that way was

Haynsworth Sinkler Boyd, says, “We have

a return to our roots,” Ellefson says. “The

cities of varying sizes say their hometowns

been blessed in Greenville to have visionary

evolution of Main Street over the past 30

have found the right formula and can serve

leadership.  A creative combination of public

years has been awesome to watch. The area

as a lab for other cities and the businesses

and private efforts has allowed us to create

where our new One Building is located will

located in them.

development beyond normal expectations.”

be the link between the north end and the

Greenville’s renaissance began with a vision

And Haynsworth Sinkler Boyd is putting

more than 30 years ago. The downtown Green-

its money where its mouth is. The law firm’s

opment efforts together. We are excited to

ville of today in no way resembles the city of

Greenville office opened on Main Street 125

help make that happen.”

10

south end of Main Street, tying lots of devel-


Greenville Mayor Knox White is a partner in Haynsworth Sinkler Boyd, and this dual role allows him to live what he preaches. “The city has a tradition of working in partnership with private businesses. Together we create an environment that is beautiful and full of life.” It’s not just the big cities that are seeding their downtowns to be attractive to new investment. In Manning, entrepreneur Jeffrey Black could have chosen to locate his international consulting business anywhere, but he saw the potential in his hometown Main Street. He owns 12 downtown buildings in Manning and runs his company from one of them. Black says he chose to invest in downtown Manning because he believes a city’s downtown is the first impression people get of what a community’s values are. “Nobody wants to come to a place that looks tired and uncared for. They want to come to a place

“This is my hometown. Lake City is where I learned critical values and work ethic I needed to succeed in my profession. And, as such, it is a town I want to see succeed.”

Darla Moore

Businesswoman

that is alive and vibrant – a town rich in history, but with a vision for the future.” Black points to the City of Manning’s participation in the Main Street SC program as a real asset to its downtown development. “This group’s support is instrumental in en-

I believe, with a little help, we can use these

and tax incentives to improve the façades of

hancing downtown, one building at a time.

assets to transform Lake City.”

their buildings.

This organization provides yearly façade

“Our town leaders, led by Mayor Lovith

She believes that this Pee Dee town can

grants, and building owners realize that a

Anderson, have committed their time and

become a destination many people will want

new coat of paint, good signage and planters

resources to be part of a huge public/private

to visit in order to reconnect with a small

can make a world of difference.”

partnership effort to improve the economic

town atmosphere that has mostly disap-

viability of Lake City,” Moore says. “This

peared from our countryside.

In Lake City, businesswoman Darla Moore also felt the pull of her hometown

collaborative is demonstrating to everyone

when she decided to help revive its down-

involved the importance of working together

full of restaurants, retail stores, apartments

town.

to solve problems.”

and hotels to accommodate all the people

“This is my hometown,” Moore says.

Moore says downtown Lake City has been

“I envision a vibrant, active downtown

who will want to spend some time visiting

“Lake City is where I learned critical values

able to retain its early 1900s façade. And the

museums, viewing the agribusiness history

and work ethic I needed to succeed in my

town has enacted a historic preservation dis-

of Lake City, honoring the life of the distin-

profession. And, as such, it is a town I want

trict ordinance to ensure the preservation of

guished astronaut, Ronald E. McNair, and

to see succeed. Our research tells us Lake

the downtown area. The town is also working

enjoying the beautiful gardens and rivers in

City has the assets necessary to succeed, and

to offer downtown property owners grants

the Lake City community,” Moore says.

11


Cities r ll ut

bike-friendly initiatives By Mary Brantner

A

s gas prices remain high and efforts

Community, a designation awarded by the

to be more ecologically friendly in-

League of American Bicyclists. Rock Hill

crease, bicycles offer an affordable,

joins other South Carolina Bronze Level

nonpolluting, greenhouse gas-preventing

Communities: Charleston, Columbia, Green-

form of transportation.

ville and Spartanburg. Hilton Head Island

Cities across the country are capitalizing

is the only community in South Carolina to

on the growing popularity of biking, and they

achieve the League’s silver level.

are reaping the economic and quality of life

The League, through its Bicycle Friendly

benefits from building and supporting a bike-

Community Program, recognizes cities for

friendly community.

their commitment to improving conditions

“Communities that have fostered that

for bicycling through investment in bicycling

popularity by providing bicycle infrastruc-

promotion, education programs, infrastruc-

ture for transportation and recreation have

ture and pro-bicycling policies.

seen considerable economic benefits by at-

A Bicycle Friendly Community must

tracting businesses, tourism and active residents,” according to Advocacy Advance – a partnership of the League of American Bicyclists and the Alliance for Biking & Walking,

demonstrate achievements in each of the Bike corrals are part of the City of Charleston’s overall effort to meet increasing demand for bicycle parking in the downtown area.

“Building such a (bike-friendly communi-

program’s five categories: engineering, education, encouragement, enforcement, and evaluation and planning. “Any city – regardless of size or geography – can take cost-

ty) can translate into a more connected, physi-

entertainment,” reported the League. It also

effective steps to increase bicycling in their

cally active, and environmentally sustainable

cites a study by the Outdoor Industry Foun-

community,” said League President Andy

community that enjoys increased property

dation that estimates the spill-over effects

Clarke.

values, business growth, increased tourism,

of all bicycling-related activities could be as

“Receiving this designation from the

and more transportation choices,” according

large as $133 billion, supporting 1.1 million

League of American Bicyclists is not only a

to the League of American Bicyclists.

jobs and generating $17.7 billion in federal,

tremendous honor, but it is also a testament

state, and local taxes.

to Rock Hill’s commitment to providing the

“The nation’s 60 million annual recreational bicyclists spend $46.9 billion on meals, transportation, lodging, gifts and

In October, Rock Hill became the state’s newest Bronze Level Bicycle Friendly

12 Cities Mean Business | www.citiesmeanbusiness.org

highest quality of life for all citizens,” said Rock Hill Mayor Doug Echols.

A publication for the Municipal Association of South Carolina


Above: The bike corral initiative is one of several initiatives the City of Columbia and its Bicycle Pedestrian Advisory Committee are working on to enhance Columbia’s bicycle/pedestrian infrastructure. Right: With the help of a local college’s art class, Eugene, Oregon, has made the bike corrals a part of its public arts plan. (Photo/City of Eugene)

Part of creating a bicycle-friendly community is providing safe, convenient and

“Receiving this designation from

secure bike parking. Without some accom-

the League of American Bicyclists

modation, cyclists are forced to either lock

is not only a tremendous honor,

the bikes to a parking meter or compete with trees, pedestrians and newspaper racks for

but it is also a testament to

sidewalk space.

Rock Hill’s commitment to

In response, communities across the country are turning to bike corrals. Typically

providing the highest quality

installed in a single-car parking space, corrals

of life for all citizens.”

provide on-street parking for up to 12 bicy-

are part of the city’s overall effort to meet increasing demand for bicycle parking in the downtown area. The corrals provide an innovative solution to the challenges of Charleston’s historic streets where sidewalk space is already claimed by pedestrians and other streetscape elements. In October 2012, Columbia installed four bike corrals in three of its hospitality districts – Five Points, the Vista and City Center. Groups representing the hospitality districts

cles. By locating these corrals on city streets,

Mayor Doug Echols

officials ensure the bicycle parking spaces are

Rock Hill

out of the way of pedestrians, visible to mo-

cyclists’ importance to the community. Busi-

torists and, most importantly, easily spotted

ness owners like the additional traffic and

by cyclists.

unobstructed view of their businesses that

Center each have their unique features, the

the corrals provide. By freeing up sidewalk

corrals provide a great sense of connectivity,

space, pedestrians enjoy a safer place to walk.

helping to form a stronger, more viable city,”

Basically, bike corrals are just longer sidewalk bicycle racks – a fixed structure with upside-down U-shapes. However, some cities

have supported the city’s efforts, which included agreeing to a 50 percent cost share for

In September, Charleston installed the

the corrals. “While Five Points, the Vista and City

commented Mayor Steve Benjamin.   

are unleashing their creativity and showing

state’s first bike corral on King Street. Mayor

off their community’s unique character. With

Joe Riley explained, “Bike corrals … serve

eral initiatives the City of Columbia and its

the help of a local college’s art class, Eugene,

as a signal to everyone that bicycling is an

Bicycle Pedestrian Advisory Committee are

Oregon, has made the corrals a part of its

important part of our community. Promoting

working on to enhance Columbia’s bicycle/

public arts plan. The corrals showcase the

bicycling downtown and in other parts of the

pedestrian infrastructure.

city’s history and culture.

city helps address the problems associated

The corrals offer a number of benefits. They give bikes a designated place to park at popular locations and acknowledge the

Learn more about the Bicycle Friendly

with congested areas.” Charleston plans to install three additional corrals in the downtown area. They

A publication for the Municipal Association of South Carolina

The bike corral initiative is one of sev-

Communities Program at www.bikeleague.org/ communities.

www.citiesmeanbusiness.org | Cities Mean Business 13


By Reba Hull Campbell

To market, to mar ket

F

armers markets are popping up all

The City of Camden partners with the

partnership with a local middle school lo-

over the state supporting the move-

Kershaw County Farmers Market, an inde-

cated in the heart of the town. The town part-

ment to buy local. But farmers mar-

pendent 501c3 organization, to operate the

nered with the school to build a pavilion area

kets are more than part of a trend for the sale

Saturday market from April through Decem-

and install the other necessary infrastructure

of local products.

ber. The city secured a state grant in 2007 to

on the school campus. When not in use by

fund half the cost of prime downtown land

the market, the pavilions provide covered,

found almost solely along rural roads where

for a farmers market site, a one-acre grass lot

outdoor classroom space. 

local farmers would sell their products from

in the heart of downtown. The city funded

the back of a truck.

the remaining land cost. The city cuts the

the town’s investment in the physical space

grass and makes improvements to the prop-

and staffing for the market pays off in many

much more market-driven, and local gov-

erty as requested by the farmers market or-

ways for the whole community. “Beyond pro-

ernments are seeing the economic value of

ganization, such as a handicapped-accessible

viding a much-needed community gathering

supporting the startup of markets in their

ramp, bike racks and electrical connections.

space, the market has also shown success in

It’s a great partnership, says Mayor Tony

helping local vendors get their products in-

In days gone by, farmers markets were

Today, the idea of a farmers market is

communities. Not only do farmers markets give local

Scully. “While the city made an investment

Mount Pleasant Mayor Billy Swails says

troduced to a larger market.”

vendors the chance to sell their wares di-

in the physical space, the Kershaw County

rectly to the consumer, but the markets also

Farmers Market does all the work. They have

Cuisine, is a vendor at the Mount Pleasant

enhance the local tax base, keep dollars in

a manager who is an excellent organizer. Be-

market in addition to markets in Summer-

the local economy and give vendors low-risk

cause the market is in the heart of downtown, ville, Pawleys Island, North Myrtle Beach,

business opportunities.

all the downtown businesses benefit – from

Florence and Daniel Island. He says “We

the restaurants to the antique stores to the

use the farmers market to talk with people

general merchandisers.”

about our products. We let them sample and

The SC Department of Agriculture data shows more than 120 local farmers market around the state, many of which are operated in partnership with local governments.

The Town of Mount Pleasant sees similar success from its market that is held in

14 Cities Mean Business | www.citiesmeanbusiness.org

Lance Nilsen, owner of Dale’s Lowcountry

let them know where they can purchase our products when not at the markets.”

A publication for the Municipal Association of South Carolina


Hom etown

SNAPSHOT

Photo/James T. Hammond

moved ity Market C a d o S ’s ia Columb d draws t last fall an ee tr S n ai to M d visitors shoppers an f o s d re d n hu rs ing. Vendo rday morn every Satu ood and , meat, seaf ce u d ro p h sell fres d, baked l as hot foo el w as s er ns flow Local artisa food to go. d an s em it eir wares. also sell th


You see a street‌

We see a lifeline that is a hometown with planned traffic flow, fire stations, thousands of visitors each year, city parks and community centers for children of all ages. Our streets take us to our jobs, our churches, our fun places and even to grandma’s house. www.CitiesMeanBusiness.org


CONNECTING BUSINESS in South Carolina SC Biz News is the premier publisher of business news in the state of South Carolina. We publish the Charleston Regional Business Journal, Columbia Regional Business Report, GSA Business and SCBIZ magazine.

Connect your business to our statewide audience. For information about statewide advertising, call Steve Fields at 843.849.3110.


Photo/Leslie Burden

www.scbizmag.com

FEATURE


narled funding S.C. leaders tackle transportation infrastructure, funding

shortf a l

By Chuck Crumbo, Staff Writer

S

outh Carolina needs to improve its transportation infrastructure if it hopes to attract new businesses and encourage expansion. That’s the opinion of key business leaders as they press the South Carolina Legislature to find the money to widen interstates, fix bridges, and revamp interchanges to improve the flow of commerce. “If we don’t get the infrastructure piece, none of this other stuff is going to happen,” said Otis Rawl, president and CEO of the S.C. Chamber of Commerce. “Businesses will start looking in other places.” The price tag to fix the infrastructure is hefty.

l 27


INFRASTRUCTURE IN S.C. Cargo is loaded onto a FedEx plane early in the morning at Greenville-Spartanburg International Airport. (Photo/Liz Segrist)

A group of business leaders, including Rawl, have suggested to the Legislature that $6 billion worth of transportation infrastructure projects needs to be completed over the next 10 years. Meanwhile, the S.C. Department of Transportation says South Carolina is facing a funding shortfall of $29 billion over the next 20 years to cover the cost of fixing roads and bridges, and investing in mass transit and rail transportation. A report by SCDOT pegged the state’s transportation needs through 2033 at $48.3 billion. But anticipated funding – which includes state and federal tax appropriations – is estimated to total $19 billion. That means an annual funding shortfall of roughly $1.5

billion for the next 20 years. Given the state’s limited wallet, the SCDOT is putting together a 25-year statewide multimodal plan to move freight by ground, rail and air. The plan, to be released in January 2014, also involves the S.C. Department of Commerce and S.C. State Ports Authority. The plan will prioritize future transportation infrastructure requirements and serve as a tool to spur job creation, business expansion and education. It also will analyze infrastructure requirements, as well as rail, freight and transit components. Advocates say the need for a plan and improvements to transportation infrastructure is urgent, citing a $5.3 billion overhaul

project that will increase the capacity of the Panama Canal by 2015. When completed, the ultra-large cargo ships will flow from the west through the canal to call on the Port of Charleston. Handling bigger cargo ships, which can carry about 40% more containers than the largest cargo vessels that routinely dock at Charleston now, means more trucks hauling more goods to and from the manufacturing and distribution centers in the Midlands and Upstate via an already stressed interstate highway system. The transportation plan will serve as a roadmap to the South Carolina of the future and shape the state’s economy, supporters say.

S.C. transportation needs through 2033 $48.3B estimated need

www.scbizmag.com

$19B Anticipated funding*

28

R ough ly $ 1. 5 B a n n

u al f u n

d in g

s ho

r tf

all * includes state and federal tax appropriations Source: SCDOT


Truck traffic is heavy on I-26 through Columbia, as well as other parts of the state. Delays on the road can cost haulers big time. (Photo/Jeff Blake)

for future transportation needs. “A lot agree that infrastructure is woefully underfunded and our Department of Transportation is right in that just getting to what they call ‘good’ requires billions of dollars,” Mason said. Traffic congestion threatens many of the haulers’ profit margins, Mason added. Some trucking company executives said they have anywhere from a 15-minute to one-hour window to make deliveries and keep their customers’ production lines humming. “One person I talked to said they’re held liable for any losses that a company faces because of a late delivery,” Mason said. “If you can imagine showing up 20 minutes late and getting a bill for 20 minutes of machine downtime, that could be very exorbitant.”

Transportation, money and jobs

www.scbizmag.com

One element of the state’s economy dependent on the transportation system is the TDL industry – transportation, distribution and logistics. The industry involves some 2,500 companies that employ more than 40,000 workers, with a payroll of more than $1.6 billion.

The sector’s growth has taken off in recent years as TDL companies added 11,000 jobs and invested $1 billion in expansion projects and new construction. Meanwhile state exports to 198 countries jumped 21% in 2011 and were up 4% through the first half of 2012. S.C. exports, which were valued at about $25 billion in 2011, support nearly three out of every 10 manufacturing jobs in the state, according to the International Trade Association. The annual economic impact of the port alone totals $45 billion and supports 300,000 jobs. More than 700 companies across the state do business with the port and use the state’s highways. The state transportation plan will take into account what projects would offer the best return on investment, said Frate of SCDOT, adding that there is a direct correlation between transportation infrastructure and economic growth. With limited resources, the agency wants to write a plan that gets the best return. “We have very limited resources for infrastructure in the state of South Carolina,” Frate said. Many, though, wonder if the state’s political leaders are willing to make transportation infrastructure a top priority for funding support. Before the Legislature opened for business this year, the S.C. Business Roundtable sent a letter to the top budget writers asking them to support the group’s request that the state invest $6 billion over the next 10 years on transportation infrastructure projects. The Business Roundtable represents 14 business organizations including the S.C. Chamber of Commerce, S.C. Forestry Association, S.C. Manufacturers Alliance, S.C. Trucking Association, and the S.C. Farm Bureau. “If no new revenue is dedicated to infrastructure this legislative session, it will take more than 50 years to complete major projects that are necessary for the economic success of South Carolina today,” the group said in letters to state Rep. Brian White, chairman of the House Ways and Means Committee, and state Sen. Hugh

INFRASTRUCTURE IN S.C.

“What we want to be able to do is develop an efficient and seamless transportation system,” said Doug Frate, deputy director for intermodal and freight programs at the SCDOT. “We have to be able to be in a position to effectively meet the critical transportation demands and further economic development efforts.” The plan is expected to incorporate a number of the state’s advantages, which would include: • The state is just a two-day drive from more than 200 million Americans, and home to five interstate highways offering east-west and north-south access to the rest of the nation. • Two world class railroads – CSX and Norfolk Southern – serve the state via 2,400 miles of track. • Nearly any location in the state is within an hour’s drive from primary airports at Charleston, Columbia, Greenville and Charlotte, which offer cargo services. • South Carolina is one of the leading areas in the world that offers affordable and reliable energy. “When you listen to these manufacturers, the one thing they like about South Carolina is the infrastructure,” said Doug Woodward, an economist at the University of South Carolina’s Darla Moore School of Business. “If we hadn’t made investments in our port and our highways, we wouldn’t be where we are today.” As part of SCDOT’s effort to draw up a transportation plan, it has held meetings around the state to understand statewide freight needs, find ways to reduce bottlenecks, and improve efficiency on the interstate highways and other corridors. In conjunction with the meetings, Scott Mason, who holds the Fluor Endowed Chair in Supply Chain and Logistics in Clemson University’s industrial engineering department, has interviewed key stakeholders to get their thoughts on the state’s transportation needs. “I hear a lot about the strengths, what our state does well,” Mason said. However, many of the executives are concerned about how the state plans to pay

29


26

INFRASTRUCTURE IN S.C.

20

COLUMBIA

140,000

vehicles a day tra vel I-26 in Richla nd Coun ty

ORANGEBURG

26

50,000

vehicles a day travel I-26 in Orangeburg County

95

CHARLESTON

150,000 Map: Jean Piot

www.scbizmag.com

0

77

30

Leatherman, chairman of the Senate’s Finance Committee. “The private sector can do a lot to move the state forward, but businesses cannot make the decision to expand interstates, replace bridges or build new roads. Investing in infrastructure is inherently a core function of government.” The Business Roundtable suggested that $2.5 billion be spent for expansion of existing highways, $2 billion for replacement of deteriorating bridges, and $1.5 billion for resurfacing projects in all of the state’s 46 counties. The group singled out I-26, a 221-mile ribbon of concrete and asphalt linking Upstate manufacturers to the Port of Charleston, as a critical commercial and economic development artery. “We believe it deserves special and im-

6 ay travel I-2 vehicles a d n County in Charlesto

mediate improvement in order to serve our vital tourism, port, manufacturing, just-intime shipping and everyday travel requirements,” the Business Roundtable said. I-26’s route, which traverses 10 counties with a combined population of 1.6 million, has been labeled the “lifeblood of business in South Carolina.” But the route is notorious for traffic jams and accidents. For example: • In Charleston County, according to S.C. Department of Transportation, about 150,000 vehicles a day travel some sections of I-26. • In Richland County, more than 140,000 vehicles can be counted daily on sections of the highway. • In Orangeburg County — midway between Columbia and Charleston — the daily vehicle count on I-26 is

about 50,000 cars and trucks. About 13,000 to 14,000 of those vehicles traveling through Orangeburg County are trucks, many of them hauling goods to and from the port. Statistics compiled by the Federal Highway Administration show that daily traffic volume on heavily traveled sections of I-26 — from Columbia to Charleston — increased 500% to 700% between 1969 and 2003. “All you have to do is have an accident and you shut down commerce for a day or half a day,” Rawl said. “You can’t afford that.” The SCDOT estimates that 30% of all roadway travel in South Carolina is on the interstates, and 14% of the state’s 851 miles of superhighways experience “recurring congestion.” Highway congestion cost the state $2.6


INFRASTRUCTURE IN S.C.

billion in lost economic activity between 2005 and 2011, the SCDOT said.

Finding the money How to pay for the work, though, will be a challenge. Increasing the state gasoline tax is often suggested by business leaders as a remedy. South Carolina collects 16.75 cents for every gallon of gasoline purchased in the state – the fourth-lowest tax in the country. But the gas tax has been fixed since 1987, when South Carolina had one million fewer people and a much smaller manufacturing and distribution base. At the time, the Legislature didn’t opt to index the tax for inflation, so the amount of tax collected per gallon has stayed the same. The amount of gas tax revenues lately has tapered off because cars are getting better mileage; thus less gasoline is consumed. For the upcoming 2013-14 fiscal year, gas tax revenues are expected to total $460.7 million – less than a third of the transportation agency’s $1.5 billion budget. The largest share of the SCDOT budget – $900.2 million – is expected to come from federal reimbursements and grants.

In a meeting with the state Senate Finance Committee, SCDOT director Robert St. Onge Jr. noted that the state gas tax must be leveraged as match money to receive federal funding. However, revenues from the state gas tax have been relatively flat since 2001 and have not kept pace with inflation. Overall, there has been a 49% reduction in buying power since the last fuel tax adjustment in 1987, St. Onge said. While raising the gas tax might remedy some of the transportation funding problems, few think legislators will support an increase. “I don’t know if the General Assembly has the will to raise the gas tax,” said State Rep. Nathan Ballentine, R-Chapin. “If that’s not going to happen, where will the infusion come from?” Even if the Legislature passed a hike in the gas tax, Gov. Nikki Haley said she would oppose it. “Why would we raise the gas tax to improve infrastructure when all the gas tax dollars we currently collect don’t go to improving our infrastructure?” Haley asked in her State of the State speech.

Instead, Haley said more could be done to make sure gas tax proceeds go into roads and bridges. The SCDOT reported that it received 74%, or about $418.9 million,of the $563.9 million collected in taxes on gasoline and diesel fuel during the 2011-12 fiscal year for operations. Of the $145 million in gas tax collections for the year that did not go to DOT, the largest chunk – $68.7 million went to county transportation funds. That was followed by $26 million to the State Infrastructure Bank, and $17.7 million to the Department of Health and Environmental Control’s fund for the cleanup of underground fuel storage tanks. Just under $900,000 went to the Department of Agriculture, which inspects pumps and tests fuel quality. In her proposed budget for the upcoming fiscal year, Haley recommended the cost of supporting both the Department of Natural Resources’ Water Resources Fund and the Agriculture Department’s petroleum inspection program be covered by the General Fund. Those changes would make an estimated additional $4.3 million

TDL Council looks out for state’s roads, rails, ports and airports

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T

32

he South Carolina TDL Council aims to make sure that the state maintains its competitiveness when it comes to infrastructure. TDL stands for transportation, distribution and logistics. The council was formally launched in November 2011, an outgrowth of New Carolina, S.C.’s Council on Competitiveness. The TDL Council brings together public and private sector leaders to help the state compete for jobs, investment and industry leadership. A major project is providing private sector input for development of a statewide strategic plan sponsored by the S.C. Department of Transportation, S.C. Department of Commerce and S.C. Ports Authority. Deepal Eliatamby of Columbia is chairman of the TDL Council, which is made up of 30 governing members. Of those, DOT, Commerce and the Ports Authority have one representative each. The other 27 represent the private sector: sea, air, rail and roads. The membership is balanced by geographic area and by industry sector. The TDL Council web site is www.tdlcouncilsc.com. The 2013 South Carolina TDL Summit is planned for March 14 at Seawell’s, 1125 Rosewood Drive, Columbia. For registration information, check the goals and activities page of the TDL Council’s web site. Source: www.newcarolina.org and www.tdlcouncilsc.com


by the numbers

$563.9M

INFRASTRUCTURE IN S.C.

S.C. GAS TAX the amount of money S.C. collected through the gas tax for fiscal year 2011-12.

16.75 cents

the amount of money S.C. collects for every gallon of gasoline purchased in the state

74%

the percentage of the gas tax that the SCDOT received

4th lowest where S.C.’’s gas tax rate ranks nationlly

Peeler, R-Cherokee, and Vincent Sheheen, D-Kershaw, aims to restructure the state’s transportation agencies to better coordinate highway construction and cut down on borrowing. The measure would eliminate the State Infrastructure Bank (SIB) and fold its functions into the S.C. Transportation Department. It also would prevent the SCDOT from borrowing above its bonding capacity. Peeler and Sheheen said projects funded by the State Infrastructure Bank often are awarded based on politics rather than merit. “The SIB has been force-feeding asphalt to the coast, while the Upstate and many rural areas starve,” Peeler said. “It just doesn’t make sense to have one state agency building expensive new roads when we can’t even keep up with our current maintenance needs.” Regardless of political sentiments, the state needs to come up with a financial remedy for its infrastructure woes. “We can talk about that and give it all the lip service we want, but until we start making that a funding priority, that’s going to be one of the things that’s holding back growth,” Ballentine said. Added Woodward: “We’ve got to find a way to make these improvements. China is doing it.”

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available each year for theTransportation Department, she said. Haley’s proposed spending for the next fiscal year also includes $90 million for road and bridge improvements. “Our goal is to make sure our infrastructure needs are ahead of what the needs are for the companies we are trying to attract,” Haley said at a Statehouse news conference. One way to finance transportation needs without increasing taxes would be to bank the money that the Board of Economic Advisers projects will be collected above what is needed to meet state budget obligations, according to legislation introduced by Ballentine. However, Woodward thinks the excess revenues should go into a rainy day fund. “I’ve always advocated that,” Woodward said. “Don’t spend this money just because it’s above forecast, because you’re going to go below forecast someday and wish you had that money.” The state needs to take a hard look at how it’s spending money, said state Sen. Joel Lourie, D-Columbia. “Before we can come to the taxpayers and say we need more money, we need to make sure the money we have is being spent as efficiently as possible,” Lourie said. A bill sponsored by state Sens. Harvey

33


www.scbizmag.com

INFRASTRUCTURE IN S.C.

Rail developments focus of Commerce

34

By Matt Tomsic, Staff Writer

T

he state of South Carolina has much work ahead to develop its rail infrastructure. The S.C. Department of Commerce and city of North Charleston are beginning to develop a once-controversial rail yard on the former Navy base; meanwhile rail infrastructure needs are being folded into a transportation study and other projects, like the inland port in Greer, are under way. Commerce Secretary Bobby Hitt said his department is focused on North Charleston for now. “I think we feel like we’ve got quite enough work here to keep us busy for a while,” Hitt said. “It’s important not only that we find the right way to solve this conflict, but it’s important we take the necessary time, and we go through the process to make sure it’s implemented in the right way.” In December, North Charleston Mayor Keith Summey and Hitt announced a compromise to competing plans to develop a rail yard at the former Navy base. During a news conference, Summey said the city and state smiled, laughed and cursed each other during negotiations that would eventually turn into the settlement. “It’s been a marriage, but sometimes in marriage we have disagreements,” Summey said, joking his wife was there, and their marriage works because she tells him no. “I’m working on that, Mr. Mayor,” Hitt said, adding that tactic isn’t working out for him so far. Summey, Hitt, Gov. Nikki Haley and others praised the settlement, which calls for a rail yard on Clemson University-owned land and access to the yard through an existing line to the north. The settlement also calls for land swaps between the city and state and a payment of $8 million from the state to the city during the next four years. The state also agreed to take responsibility for $6.5 million in city bond debt that was connected with redevelopment efforts.

2

RAIL

3

PLAN Source: City of North Charleston Map: Jean Piot

1 4

6

N

5

S Public Railways property City of North Charleston property City property going to state Clemson-owned property State property coming to city

The city, S.C. Public Railways, S.C. Department of Transportation and S.C. State Ports Authority will also pay for a transportation study that will examine the impacts of rail and port traffic on the city. The deal will be finalized after a consent order is entered in state court that adopts the settlement’s terms. The order will end cases involving Public Railways, the Commerce Depart-

1: Officer Housing area 2: North Acreage - Immediate transfer 3: North Acreage - 2017 Transfer 4: DFAS Property 5: Crane Maintenance Building 6: Powerhouse ment, the ports authority, the city of North Charleston and others. “This is leadership at its finest,” said Haley, who traveled to North Charleston for the news conference after the City Council vote. “If you want to work for the people, then get them results.” The rail yard will also take some trucks off Interstate 26, said state Sen. Hugh


INFRASTRUCTURE IN S.C. www.scbizmag.com

Leatherman. “It’s, I think, the beginning of something far greater than we can even imagine,” Leatherman said. Ports authority board chairman Bill Stern also praised the agreement. “The construction of a dual-rail-served intermodal container transfer facility at the former Charleston Naval Base will enhance rail competitiveness for the Charleston region,” Stern said. “We are pleased that this will resolve the city’s claims against the ports authority, ending the pending litigation.” Summey said the city had spent about $750,000 on legal costs, and that figure had been about to increase as the parties prepared for upcoming trials. The settlement ends years of public sparring and legal fights that stem from a 2002 memorandum of understanding between North Charleston and the S.C. State Ports Authority that called for rail access to port property only through the southern end of the new Navy base terminal. Hitt said stakeholders still have much data to collect and studies to perform before the rail yard opens in North Charleston, and eventually the groups will make recommendations about quiet zones, traffic congestion and other issues that could be impacted by the new rail yard. “We expect this to be a fairly robust process,” Hitt said. Meanwhile, a transportation, distribution and logistics study will also provide recommendations for the state’s rail needs given the new rail yard in North Charleston and the inland port in Greer. The S.C. State Ports Authority announced plans for the inland port last year and hopes to finish that rail yard by September. The yard will link the Port of Charleston and the Upstate with an overnight train service, and ports CEO Jim Newsome has said Upstate customers like BMW, Adidas and others could use the facility. The ongoing study will look at ways to integrate rail into the state’s transportation plan, Hitt said. “This will give us another piece,” he said. “We need to be able to bring rail into this equation.”

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S.C. DELIVERS

Ports, Logistics & Distribution

S.C. wood pellet industry in growth mode By Chuck Crumbo, Staff Writer

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he wood pellet industry in South Carolina is picking up steam with one plant ramping up production and another about to be built.

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When both facilities are operating, South Carolina will

36

have the capacity to produce about 700,000 tons of pellets annually. See WOOD PELLETS, page 40


S.C. Delivers

Manufacturing

By Chuck Crumbo, Staff Writer

Avtec’s focus on customers, employees key to success

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38

ucked among rolling farmland and two-lane blacktops near Gilbert in rural Lexington County, Avtec Inc. makes high-tech products that company president Michael Branning labels “mission critical.” At Avtec, workers design and build communications consoles and software used to make Internet protocol products for voice-over network systems. Its customers include police departments, 9-1-1 call centers, railroads and airlines. “People are amazed that there would be a company at this level of technical focus operating here, kind of incognito,” said Michael Ridge, a 24-year employee of Avtec and director of product marketing. Avtec consoles are the key component in customers’ command-and-control centers and must work properly, Branning said. “There are lives and businesses at stake.” Avtec has evolved from a manufacturer of proprietary console systems to a company that provides software-based communication solutions with an emphasis on open standards, Branning said. “We are the tool that ties together all the dispatchers’ voice resources into a really high capability, user interface that allows them to manage a complex mission,” he said. A key to that capability is the software Avtec designs so that the dispatchers can handle multiple radio transmissions and phone conversations. “You’ve got data packets moving around a network with little snippets of voice,” said Kevin Williams, vice president of product development. “You make multiple mixes of the voices and pass them out to the right people at the right time.” Sometimes the snippets travel across large areas and multiple states. The challenge is to put the snippets — each lasting about 20 milliseconds — back together without having a gap in audio, Williams said. To illustrate the critical nature of Avtec’s

At Avtec Inc. in Lexington County, design engineer Clyde Schlabach works on software.

work, Williams offered an example of a police call. “You’re involved in the conversation and someone yells ‘don’t shoot’ and you miss the ‘don’t.’ You’ve heard the wrong thing. We can’t let that happen,” he said. Branning’s father, Troy Branning, now retired, founded Avtec in 1979 as an engineering consulting business for railroad customers. The company’s first console was a multiuser, computer-based, radio telephone console system Troy Branning designed for the Atkinson Topeka & Santa Fe Railroad. After submitting the design — called the Advanced Concept Communications Exchange Signaling System — Troy Branning bid on and won the contract for the project, Michael Branning said. In short order, Avtec became a manufacturer of the equipment for the U.S. railroad market. In 1989, Avtec began pushing into other markets, offering the ACCESS system to public safety agencies, utilities, airlines and the military. Some of Avtec’s early customers included Delta Air Lines, California Highway Patrol, Toronto Ambulance and Virginia Power. In 2008, Avtec introduced a pure VoIP console system called Scout. More than 2,000

Scout consoles are installed worldwide. “Scout is a Windows software-based product running on standard PCs that’s very configurable and meets the needs of all the diverse marketplaces we serve,” Branning said. Avtec’s products are in such high demand that the company is growing out of its 20,000-square-foot facility on Augusta Highway and is building a $6.1 million manufacturing facility and corporate headquarters at an industrial park in the town of Lexington. The growth has been driven by the recent introductions of next-generation, open-standards radio systems, and development of a third-party sales channel, Branning said. Public and private customers also are equipping secondary command centers for disaster recovery, he said. Avtec expects revenues to reach $25 million this year, up 28% from $19.5 million in 2011, Michael Branning said. Since 2007, Avtec has averaged 24% annual growth. Branning thinks the way the company values its customers and employees is key to Avtec’s success. “My dad always said take care of the customers, take care of the employees, and profit and growth will follow,” Branning said.


The No. 1 manufacturing industry

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S.C. Delivers

in South Carolina is forestry,

40

providing more than 90,000 jobs.

WOOD PELLETS, from page 36 Still, South Carolina is “a relatively small player in the export market,” said Hakan Ekstrom, of Wood Resources International, headquartered in Bothell, Wash. There’s potential for growth in the manufacturing of wood pellets as some countries in Europe are searching for ways to trim carbon emissions in fueling base-load power generation. Also, countries like Germany plan to shut down commercial reactor units in the wake of safety issues raised by the nuclear accidents at Fukushima, Japan. To meet the rising demand, wood pellet manufacturing has expanded in the South, helping make the United States the largest exporter in the world. With continued investments throughout the Southern United States, export volumes are forecast to reach 5.7 million tons in 2015, up from 1.5 million tons expected this year, according to the North American Wood Fiber Review, a publication of Wood Resources International. It’s estimated that pellet production will

at least double over the next four to five years, and some forecasts project 25% to 30% in annual growth globally over the next decade. Wood pellet exports in the South rose 13% in the second quarter of 2012 over the amount reported for the first quarter despite temporary slowdowns at facilities in Florida and Georgia, because of fires at a U.S. port and at a pellet consumer in the United Kingdom, the wood fiber publication said. Lowcountry Biomass has invested $16 million into expanding its existing wood pellet plant in the Jasper County community of Ridgeland. The expanded facility, which will have the capacity to produce 200,000 tons of pellets annually, will begin around-the-clock operations in the first quarter of 2013. Meanwhile, Atlanta-based Enova Energy Group plans to build a network of three pellet plants in Georgia and South Carolina. The first project will be constructed in the Edgefield County town of Trenton, off S.C. Highway 121. Work will begin sometime during the first quarter of 2013. The Enova plant will produce wood pel-


Estimated export volume of wood pellets in the U.S.

1.5 million tons in 2013

5.7 million tons in 2015 Source: North American Wood Fiber Review

dirt mixed in with it,” Adams said. “Logging residues are better suited for use in biomassfired boilers where the fuel doesn’t have to be pelletized.” Pellet manufacturers generally prefer pulpwood like that used by the pulp and paper industry or by oriented strand board manufacturers, Adams said. Pulpwood can

be chipped into a cleaner form of biomass, he said. With about two-thirds of South Carolina, 13.1 million acres, covered by forest, it would appear that the state has plenty of resources available for wood pellets. “We actually have more wood here in South Carolina than we’ve ever recorded, and our records go back to the 1920s,” Adams said. “However, our wood supply is not evenly distributed across the state or by age.” Wood suitable for making fuel pellets is in the forests of the Piedmont, Adams said. But pellet manufacturers prefer to have their plants and operations close to a major seaport to hold down transportation costs. One of the commission’s roles is to help prospective biomass companies make better decisions on where to locate based on the resource, Adams said. Finding the right supply of biomass in a location that can be moved economically to an available port facility is a real challenge, Adams said. Columbia Regional Business Report Editor James T. Hammond contributed to this story.

S.C. Delivers

lets to be used as a renewable fuel for export to the European Union under long-term contracts with public and private utilities. Each of Enova’s new facilities will produce 500,000 tons of wood pellets annually by 2014. The pellets from the Edgefield plant will move by rail to the Port of Savannah to be shipped overseas. The major source of feedstock for pellets is saw mill residue. The wood fiber material is dried and then pressed through a die, producing pellets 6 to 8 millimeters long or about the length of the first section of a person’s finger. According to the U.S. Department of Agriculture, S.C. mills in 2011 produced 9 million tons of wood residue that was either burned as waste or dumped in landfills. In South Carolina, where forestry is the state’s No. 1 manufacturing industry, providing more than 90,000 jobs, logging residue is the single largest source of underutilized biomass, said Tim Adams of the S.C. Forestry Commission. However, the material “is generally not suitable for pellets because of the amount of

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S.C. Delivers

Exporting

By Chuck Crumbo, Staff Writer

S.C. plant ranks No. 2 in BMW world operations

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MW’s second-largest production plant is not in Germany. The largest exporter of cars built in the United States happens to be headquartered in Germany. Confused? Well, don’t be. It just happens that BMW’s manufacturing facility in the Upstate now ranks as the Munich-based carmaker’s No. 2 production plant in the world. The plant ships 70% of its production through the Port of Charleston to 130 world markets. The National Association of Foreign Trade Zones has recognized BMW as its Exporter of the Year. In addition, NAFTZ has recognized BMW as the recipient of its Export Achievement Award for being the member that showed the most improvement in value. In 2011, BMW exports were

42

The Upstate BMW plant ships 70% of its production through the Port of Charleston. (Photo/Leslie Burden)

valued at more than $7 billion. The sprawling, 4 million-square-foot plant off Interstate 85 near Greer in Spartanburg County produced 301,519 vehicles in 2012, said Josef Kerscher, president of

BMW Manufacturing. In 2011, the plant produced 276,056 cars. “Our plant is the second-largest manufacturing facility,” said Kerscher, who lectured on the BMW experience in the


Amount of BMW’s produced in the S.C. plant 276,056

S.C. Delivers

Palmetto State at the University of South Carolina’s Darla Moore School of Business. “It’s not what we expected,” Kerscher said, noting that when the plant started production in 1994 it was regarded as a “small unit” in the worldwide BMW operation. Since then BMW has produced more than 2 million cars in South Carolina, each bearing the company’s iconic blue-andwhite roundel or logo. It also has developed a network of 170 suppliers in North America — 40 of them in South Carolina. BMW, though, is not slowing down in the Southeast. Kerscher noted that the company is in the midst of a $900 million expansion that will increase the plant’s annual production capacity to 350,000 units. When the project is completed, BMW expects to increase the Upstate plant’s payroll by 300 workers. It presently employs 7,000 people. The expansion also will boost the carmaker’s investment in South Carolina to nearly $6 billion since it first announced plans to build the plant back in 1992. The expansion will allow BMW to add a fourth model, the X4, to its line of sports

2011 301,519

2012 0

50,000

100,000

150,000

activity vehicles produced at the Upstate plant, Kerscher said. All of BMW’s sports activity vehicles — classified as SUVs or light trucks — are built in South Carolina. The key to BMW’s success has been exports, Kerscher said. “We’ve always been focused on exporting because Germany is not a big market,” Kerscher said. “So we’ve always had to learn how to be competitive in the world market.” Germany and China are the top two destinations for S.C.-made products, Kerscher said, adding that BMW has the flexibility to respond to demand anywhere on the globe. Although the European economy is struggling, Kerscher said BMW is holding its own in the premium car market.

200,000

250,000

300,000

“The Asian market is growing. The U.S. market is growing,” Kerscher said. “So overall we are growing, and we believe we can overcome the situation.” Being in South Carolina has kept BMW competitive, Kerscher said. He praised the cooperation and help of state and local governments, and labeled the Upstate as a “business-friendly community.” He also lauded the quality and work ethic of the company’s employees. “This is a business environment that we really like and helps us to be competitive in the U.S. marketplace, to be competitive in the world market,” Kerscher said. “If you’re not competitive in our business, you will be out of business very soon.”

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By Chuck Crumbo, Staff Writer

S.C. Delivers

International Business

On their trip to Farnborough air show in England, Gov. Nikki Haley and Department of Commerce officials attended 50 meetings with various companies. (Photo/Courtesy of Farnborough International Air Show)

Road trips help build on S.C.’s ties with foreign investors

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rips to places like Japan and England help build on South Carolina’s ties to foreign companies and attract investment in the Palmetto State. “This is a relationship business,” said S.C. Commerce Secretary Bobby Hitt. “People want to locate their companies where they believe they can be successful.” A mid-September visit to Tokyo to attend the SEUS-Japan conference was undertaken to build on those relationships, Hitt said. A couple of months earlier, S.C. officials traveled to the Farnborough International Air Show in England to court aerospace firms. Going to SEUS, an annual conference involving seven Southeastern states and Japan, and to Farnborough cost S.C. about $134,000 to cover costs of transporting, lodging and feeding staff. Gov. Nikki Haley led both of the missions.

“Generally speaking we’re doing what any good sales organization does,” Hitt said. “We go where the customers are and build relationships in order to sell what we sell, which is the state of South Carolina as a manufacturing and business destination.” During the week in Japan, the S.C. delegation participated in 23 meetings — 16 of which involved Haley, he said. At the air show, Haley and Commerce officials attended about 50 meetings with various firms. South Carolina has attended the air show since 2005 and the trip has been crucial in building the state’s budding aerospace business, Hitt said. Initial contact was made with Boeing Co. at the air show and that led to the investment of the 787 Dreamliner assembly plant in North Charleston. Going to trade events overseas helps

attract direct foreign investment, Hitt said, noting that 75% of new companies that made economic development announcements in South Carolina were from Europe or Asia. Japan is the second-largest investor in South Carolina, behind Germany. George Patrick, Commerce deputy secretary, said 147 Japanese companies have operations in South Carolina, representing a $7 billion investment and 12,500 jobs. Although Japan is an important partner, S.C.’s Commerce Department does not have an office in Japan. The budget crunch and the retirement of the state’s representative in Japan led to the closing of the office in 2008 and combining it with the agency’s Shanghai office. The agency does maintain a “presence” in Japan with a staffer representing South Carolina.


S.C. Delivers

Meetings with Japanese companies were “very positive,” and some of the firms S.C. officials met with set up sessions with other companies “that they thought we should meet with that would be a good fit,” Hitt said. Companies need proof that investing in South Carolina will pay off, Hitt said. “That’s why we have to spend follow-up time with them,” he said. “They want to look at a business plan.” Foreign companies need to know what their costs — from shipping to utilities — will be and how long it will take to realize a return on investment, Hitt said. Learning the culture and customs of a foreign country is important in the process of making a deal. For example, in Japan it’s usually necessary to sip tea for a half hour and exchange pleasantries before anything substantial is mentioned at a meeting, Patrick said. Also, Patrick said he always turns down a fork and knife and uses chopsticks when dining in Japan. As far as business etiquette, there’s even a ceremony involved in the exchange of business cards.

S.C. officials have been attending the Farnborough air show since 2005, and it has helped build aerospace business, Commerce Secretary Bobby Hitt says. (Photo/Courtesy of Farnborough International Air Show)

U.S. visitors are advised to invest in good quality cards and — if possible — have their card translated into Japanese. In Japan, business cards are presented and received with two hands and a slight bow. Americans tend to be more casual in exchanging business cards, Hitt said. “We kind of toss them on the table sometimes.” Another key in doing business in Japan is being prompt for a meeting, Hitt said. It’s a

sign of respect, Hitt said. “These are cultures that have some significant differences, and so you’re trying to work on comfort levels,” Hitt said. “It’s important that we go and pay the appropriate respect to them and how they do business. “You don’t always walk out of there with a deal in your pocket, but hopefully you walk out of there putting yourself back on the playing field.”

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S.C. Delivers

Manufacturing

46

By Chuck Crumbo, Staff Writer

Construction rolls on at S.C. tire plant

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ight months after construction began, Continental Tire the Americas’ first plant in South Carolina is about 30% complete and on schedule. Most of the superstructure is in place, and the installation of some equipment will soon begin at the $500 million, 1 million-square-foot facility rising from a 330-acre grassy field off U.S. 521, south of downtown Sumter. The tallest structure, a four-story mixing plant, will be the first to be equipped with machinery. Significant progress also has been made in the tire building, stock preparation, curing, final finish and warehouse. Although the corporate public relations department has issued a news release that said the project “continues to remain ahead of schedule,” plant manager Craig Baartman declined to quantify the amount of time. “I wouldn’t say we are ahead of schedule. I would say we are on plan,” Baartman said. The initial investment covers the first two phases of the plant, with construction to be wrapped up by the end of the year. Continental’s plant is one of four tire projects under construction in South Carolina. Michelin North America, headquartered in Greenville, is investing $750 million and building an off-the-road tire plant in Anderson County and expanding its existing OTR facility in Lexington County. The expansion project at the Lexington County facility is the second in a year. In 2011, Michelin announced it was spending $200 million and creating about 270 jobs at the Lexington OTR, which builds the company’s Earthmover brand of tires. Bridgestone Americas, based in Nashville, Tenn., has committed $1.2 billion to build a new off-the-road plant at its Aiken County facility and expand the company’s existing car and light truck facility. Germany-based Continental, which has its division for the Americas headquartered in Fort Mill, plans to have 1,600 people on

Construction of Continental’s tire plant at Sumter is proceeding on schedule. (Photo/Continental)

the job in Sumter by 2021 when the plant reaches full capacity, producing 8 million tires a year. Right now, there’s a skeleton crew reporting for work. The first employee, a civil engineer, was hired in April 2012. Baartman’s professional staff numbers 50 positions and another 18 multi-craft technician employees brought on board toward the end of 2012. The technicians will spend about 12 weeks training for their jobs in Sumter at Continental tire plants in Mount Vernon, Ill., Germany, Portugal, France or Mexico. While Continental plans to draw the vast majority of its workforce from the local area, six members of the plant’s professional staff are from Brazil, Germany, South Africa, France and Mexico. Baartman, a native of South Africa, where he worked for Continental, said the company brought in experienced personnel to tap their expertise in helping with the plant startup. The company plans to have 10 expatriates on board by the end of 2013. “For the initial management team, we’ve had to bring in foreign, experienced people to get the show on the road,” Baartman said. “We believe there’s an advantage to have

skill and training on hand.” As far as the construction project, the daily workforce averages 350 to 400, said Tom Tompkins, Sumter plant engineering manager. In the next couple of months, the construction workforce should peak at about 600 as mechanical and electrical subcontractors move in to begin prepping the plant for the installation of manufacturing equipment, Tompkins said. The general contractor, Walbridge/ Mashburn Joint Venture, and about a dozen subcontractors control hiring for the construction jobs, Continental officials said. As work progresses, Baartman said engineers at Sumter are gleaning ideas from lessons learned in the construction of another plant in Russia. The Continental facility in Kaluga, Russia — about 90 miles southwest of Moscow — shares the same blueprint and is about five months ahead the Sumter project, Baartman said. Continental plans to begin production in 2014 and produce 800,000 units, and by 2015 production should climb to 2 million tires annually. Other milestones are: See TIRES, page 47


By James T. Hammond, Staff Writer

Exporting

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learning opportunities for candidates for the master’s in business administration from the University of South Carolina’s Darla Moore School of Business. “It’s a win-win for everyone,” Tomlin said. For Webber, moving into the incubator provides welcome support for his long-held dream of business ownership. He traces the genesis of his current business plan to his two years working at a BMW facility in Munich, Germany. Noting that Munich, a city of 1.8 million people, includes about 40% who are from other countries, he said he quickly found an interest among those expatriates in vitamins and other food supplements from his home country. “Everyone seemed to want Americanmade vitamins,” Webber said. “I was bringing back suitcase loads from my trips back home. After I moved back to the United States, people in Munich were still asking us to send them products.” In 2008, he formed his company, and in 2009, his first export of his products went out to Bulgaria. Webber’s newest line of products includes fortified foods of the type often used to feed people in disaster or famine situations. “There is a tremendous market overseas, where there is rapid population growth,” Webber said. “These products are now being sold in retail settings in emerging markets.” Webber predicts “tremendous growth” in his exports in the next year, based upon contacts with his export partners in other countries. He currently obtains his products from third-party manufacturers in

this country. The goods may carry his IGS brand, or private brands of the companies he sells to in the emerging markets. But his business plan calls for IGS to begin making some of its own products in Columbia within 18 to 24 months. Webber expects that, once started, the manufacturing facility would employ 40-50 people within 12 months.Webber’s experience at BMW has positioned him well to start a manufacturing operation, he said. “I’ve worked in manufacturing for 17 years,” Webber said. “I supervised making paint, and making blended food products is not that different in terms of processes.” Webber’s company currently has less than $1 million a year in revenue, but he expects his sales to grow tenfold in three to four years.“I’ve been running this business from a home office,” he said. “The incubator will give us more structure, help us to scale up and provide business mentors. We’ll be able to share ideas with other companies. And we expect to outgrow the incubator in about three years.” Webber already has received advice and help from the U.S. Department of Commerce, S.C. Department of Commerce and the U.S. Export-Import Bank. He recently was named to the bank’s advisory committee, which advises on policies and programs. In 2012, Webber accompanied a group from the Columbia World Affairs Council to the African nation of Ghana, where he explored the market potential for his products. “What Columbia offers us, we can’t find anywhere else,” Webber said. “We believe this is the best place for IGS.”

TIRES, from page 46 • In 2016, Continental expects to make 3 million tires in Sumter County. • By 2017, employment should reach 800 people. • By 2021, when phase one and phase two are complete, employment should hit 1,600, and annual output should reach 8 million tires.

Further expansion beyond 2021 will depend upon the progress of the initial operations, the economy and demand for tires, Baartman said. “What is going to be happening in 1020 years’ time is anyone’s guess,” Baartman said. “I think the bottom line for us is that we got through 2012 successfully,” he said.

“Every aspect of our plan is on time, we’ve recruited the people and the resources that are required. “Our plan for 2013 is to do the same, but it will be another level of intensity involved in order for us to be able to produce tires in 2014.” Columbia Regional Business Report editor James T. Hammond contributed to this report.

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herod Webber says he always had a “burning desire” to own a business, but he spent 17 years as an executive for BMW Manufacturing learning about managing manufacturing and other business skills before he was able to devote himself to being a full-time entrepreneur. Since May, when he left BMW, he has devoted all his time and energy to growing Innovative Global Supply LLC, a Columbia-based distributor and exCherod Webber porter of vitamins, food supplements and fortified food products that targets emerging markets in Eastern Europe, the Middle East and Africa. IGS is the latest resident company at the USC/Columbia Technology Incubator, and Webber said he found the support network of the business incubator, the city and its business leaders to be the ideal environment to nurture his young company. In turn, the incubator’s board chairman, Don Tomlin, said IGS is exactly the sort of startup that the USC/Columbia Technology Incubator needs to build the region’s entrepreneurial culture. “Soon, we’ll have 100 entrepreneurs in this building, all engaged in building companies,” Tomlin said. “There’s a cadre of brains in this building, each company helps another. That really accelerates growth.” Tomlin said Webber’s company will provide

S.C. Delivers

Former BMW exec aims to grow exports of vitamins, food supplements

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1,000 WORDS

48

The rushing waters of Finlay Park’s fountain are a breathtaking sight as evening settles over downtown Columbia. There’s just something about a skyline on a clear night. (Photo/Leslie Burden)


2013 SC Biz - Issue 1