Special Report: The business of attracting business
NORTH CHARLESTON, S.C. (WCIV) -- South Carolina's unemployment rate is at a five-year low, and it comes as no surprise as more and more big businesses are setting up shop in the Lowcountry.
So, what is bringing in the big business boom? ABC News 4's Jon Bruce examines the economics behind tax incentive and how they are helping to bolster South Carolina's Recovery.
In business, the art of the deal can be summed up best by your record of wins and losses. For Charleston County Economic Development Director Steve Dykes, the wins are piling up fast.
"There are nights when I go home with deals reverberating in my head and it's hard to sleep," Dykes said.
Temporary bouts of insomnia are just an unfortunate part of the job for a man with only a five-person staff responsible for contacting and attracting new or existing companies to Charleston.
Dykes believes proximity to the Port of Charleston, an emerging highly educated workforce and certainly quality of life are all selling points, but the biggest weapon in his arsenal is what city leaders can offer -- tax incentives.
Incentives are a tool that enables counties, municipalities and states to compete in corporate searches for offices and plant facilities. Incentives in theory can help level the playing field with neighboring states like Georgia and North Carolina, which Dykes says have lower property taxes.
Utilizing the practice of incentives has kept Charleston County in the top ten amongst job creators in the state.
The county also was named number one in the U.S. for Growth in manufacturing jobs, according to the Brookings Institute.
With the recent success of companies like Boeing and Streit USA Armoring, there is arguably no place hotter on the East Coast right now than the Palmetto State.
"Incentives can be offsets in state income tax at the state level. They can be local property taxes relief, which is where Charleston County becomes involved," Dykes said. "They can also involve grants and cash for a company to solve particular site problems or address infrastructure needs."
Most commonly in Charleston County, relief comes in the form of tax breaks to the tune of 40 percent savings over 20 to 30 years.
It may sound like a hefty price, but it's one Dykes says is worth the investment in the Lowcountry and one that produces not only jobs and a more robust economy.
"It becomes a lose the project or gain the project equation in our minds," he said. "When you look at the sacrifice what we do to get the employer here, and then look at the huge impact through the capital investment, the bolstered tax base and the economic impact of the payroll and the rippling of the payroll throughout the economy as well as the local purchasing the manufacturer is going to make. It's a no brainier to us."
Companies like Boeing and Daimler vans are examples of companies that received tax incentives. They are businesses that Gov. Nikki Haley says represents the future of our state.
"We are up to the job," Haley said during a recent stop at Bennefitfocus to break ground on the tech company's new facility. "We are able to build airplanes, and able to do them well. I think we've proven to the word that South Carolina builds things, that we are good in technology, that we are good in customer service and we will continue to do that and make sure we improve with the times."
What happens if the incoming company doesn't hold up their end of the deal? Dykes says there's a failsafe in place.
"In the event that the company does not perform to the capital investment that was promised, then the county is released from the responsibility to live up to that," he said.
And while the work is never done, adding jobs and attracting new business is certainly making the Lowcountry brighter.
The South Carolina General Assembly determines which companies are eligible for incentives. The list currently includes manufacturers, research and development firms, corporate offices and headquarters, distribution facilities and tech companies.
All of them have at least 75 employees.