Economic Development – Plan for Growth City of Georgetown November 30, 2017

Economic Development Incentives Incentives | Economic Development Economic Development Incentives Given the historical limitations on public finance, it should be no surprise that significant efforts have been made to get around them “Economic Development” blessed as a public purpose in the 1980’s by the South Carolina Supreme Court opened the floodgates City has previously adopted an “Economic Development Incentive Program” by Ordinance dated 12-15-16)

Policy | Economic Development How does the project affect the City (is growth important)? What services will I have to provide? How will my existing customers/taxpayers be affected? What will it cost me to provide service? Do I have the capacity/infrastructure to support growth? Does this fit within my capital improvement plan? Do I have a rate structure that meets an business/industry’s needs?

Incentives | Economic Development Nichols Test (1986) determine whether public purpose: What is the intended or ultimate goal or benefit to the public? Are public parties or private parties the primary beneficiaries? Is the benefit to the public speculative? What is the probability that the public interest will be ultimately served and to what degree?

Incentives | Economic Development Measuring Public Purpose – Granular Catalytic effect? Contribution on employment? Property tax base growth? Sales taxes/fees? Future development? Preservation? Other indirect public benefits/costs (i.e. service to unserved area)? Unique niche fulfilled? Likelihood of development absent incentives? Benefits to key area (be careful)? Compatibility with organizational goals?

South Carolina Constitution, Article VIII, Section 13 Regionalism | Economic Development Under South Carolina law, any local government function can be provided on a regional basis. South Carolina Constitution, Article VIII, Section 13 Any county, incorporated municipality, or other political subdivision may agree with the State or with any other political subdivision for the joint administration of any function and exercise of powers and the sharing of the costs thereof.

Regionalism | Economic Development But mistrust and old grudges can impede progress Important to build relationships, otherwise, you're

Incentives | Economic Development Planned Incentives – City of Georgetown (Hotel and Surrounding Development) Inducement Resolution – Approved on 11/03/2017 Consent to Multi-County Business Parks – provide up to 50% special source revenue credits Tax Increment Financing District – development of parking facilities Economic Development Rates for Utilities – savings of up to $80k/year for 10 years Bonds – may be necessary to fund parking Incentive Agreement (in conformance with ED Policy) - Grants – due diligence costs and demolition - Abatements/Rebates – on utilities, site-work, engineering

Creating a MCIP | Economic Development Property Taxes: 1. Fair Market Values; 2. Assessment Ratios; and 3. Millage Rates FILOT Incentive (Code Sections 12-44-10; 4-29-67; and 4-12-10) – May impact all three aspects of Property Tax Calculation Special Source Revenue Financing: Special Source Revenue Bonds (“SSRBs”); Special Source Revenue Credits (“SSRCs”); and Infrastructure Credits Key purposes: Credits provide further reduction in property tax burden Multi-County Industrial Parks (“MCIPs”) - Property must be in an MCIP in order to use special source financing

SSRC Example | Economic Development

- Summit Contracting Group, Inc. SSRCs Limitations | Economic Development - The State. - Summit Contracting Group, Inc.

Incentives | Economic Development Tax increment financing is allowed by the South Carolina Constitution (1977 Amendments). Article X, Section 14 authorizes a city to borrow money for redevelopment within its incorporated boundaries, with debt service to be provided from the incremental property tax revenues resulting from the value added by the redevelopment project. Law for cities is codified at Chapter 6 of Title 31, Code of Laws of South Carolina (originally enacted in 1984, and amended many, many times). TIF Law upheld in Wolper v. City Council of City of Charleston (1985).

TIF | Economic Development

TIF | Economic Development

Outstanding Deliverables by the City: Next Steps | Economic Development Outstanding Deliverables by the City: Receipt of Market/Feasibility Study Development/Distribution of Redevelopment Plan (TIF) Ordinance Approving Redevelopment Plan Ordinance Approving IGA with County for creation of MCIP Ordinance Approving Economic Development Rate Structure Ordinance Approving Incentive Agreement with Developer

Economic Development | Contact Lawrence E. Flynn III (803) 354-4902 lflynn@popeflynn.com