South Carolina gave Daimler Trucks $2 million in 2008 to buy land for an office building near Lake Wylie. The hope was the site would become the companys headquarters, employing thousands of workers in high-paying jobs.
But last month, Daimler announced plans to expand its current headquarters in Portland, Ore. The company wants to sell the undeveloped York County property, but it wont have to repay South Carolinas $2 million grant.
In 2009, state officials determined that because Daimler opened a sales and marketing facility in Fort Mill, S.C., that initially employed 300 workers, terms of the Lake Wylie grant had been met.
The facility, near Knights stadium, now employs 500 people.
Daimler got credit for spending $16.1 million on the 400 acres near Lake Wylie and $10.6 million in improvements to the Intelli Center building it leases in Fort Mill. The state grant had required a $26.7 million investment, purchase of 200 acres and creation of 300 new jobs.
A Daimler spokesman said the company far exceeded grant commitments.
Details of the grant were not reported in 2008. The Herald recently obtained the grant agreement under the S.C. Freedom of Information Act.
The 2008 deal came as South Carolina competed with sites in Charlotte and Mooresville, according to news accounts at the time. York County and Indian Land were on the companys short list.
The Lake Wylie site off S.C. 274 near Crowders and Allison creeks was thought to be the frontrunner as the lakefront property was similar to the Portland headquarters, said Tom Smith, who represented the area on the York County Council at the time.
When York County was selected, Mooresville officials complained they couldnt compete with South Carolinas incentives.
The cost of doing business
It was a deal different from most.
York County Council declined to participate in the state grant because of concerns the county would be financially liable if the project failed, former county administrator Jim Baker said recently. Typically state grants are directed through the county where the project is located.
Negotiations between the county and Daimler were spotty at best, said Buddy Motz, then chairman of the County Council.
To direct the money to Daimler, the states Advisory Coordinating Council for Economic Development awarded the $2 million grant to Clover, which then passed then money onto Daimler.
The agreement contained provisions for repayment if Daimler failed to fulfill the requirements. When the coordinating council determined the firm met the deals minimum requirements, the state lost any repayment rights.
Nonetheless, Motz said deals such as this need to have an asterisk in cases where the deal falls through.
State Sen. Wes Hayes said deals such as Daimler are part of the cost of doing business. Once the state and the company meet their minimal obligations, thats the best you can hope for, he said. We do need to be careful, however, and make sure the payback is adequate.
Having economic development projects fulfill expectations is an ongoing issue, Hayes said.
A spokesman for the state Department of Commerce said grants can still be awarded for land purchase. But Mark Farris, York Countys economic development director, said such outright state grants for land purchases are rarer now.
Despite their misgivings about the $2 million grant, county officials were excited about the possibility of Daimler bringing its headquarters here.
Although county officials were wary about the grant, they agreed to the typical fee-in-lieu of tax agreement that would have reduced property taxes by 43 percent for 30 years. The agreement was never used because Daimler never built on the property.
While Daimlers headquarters remains in Portland, Farris said having the Daimler name on the Fort Mill building helps economic recruitment efforts.
Its one of the sites on (the) tour we show to prospects, he said. It adds to our ability to influence companies.
Farris said his office is also ready to assist in the sale of the Lake Wylie land, as long as it is for similar commercial, job-producing uses.
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