State’s largest economic development in Berkeley Co. getting ‘massive’ tax breaks

BERKELEY COUNTY, S.C. (WCSC) - A battery manufacturer, that is planning to invest $3.5 billion in Berkeley County, is expected to break ground by the end of this year.

This will be Redwood Materials’ second facility in the United States and its investment makes it the largest economic development in South Carolina’s history. The investment will also create 1,500 jobs.

The company recycles end-of-life batteries which includes everything from an electric toothbrush to a laptop to an Electric Vehicle battery -- and battery scrap.

“We’re actually able to create a closed-loop system that reduces emissions,” Morgan Crapps, the Director of Public Affairs and Government Relations for Redwood, says. “It reduces the cost of EV batteries and it reduces the geopolitical risk that’s associated with the supply chain that exists today because most of this production is actually happening in Asia today. So we’re creating a domestic supply chain for these critical battery materials that really reduces our reliance on other areas of the world.”

“We’ve known for too long China has dominated the production of raw materials needed for critical products,” President Joe Biden said during a visit to Columbia in July. “That’s why we’re building the lines of who our friends all across the world, increasing our production here at home to create alternative sources for the minerals we need. Our goal is to bring full battery supply chain home.”

This will be Redwood’s second location in the U.S. and they knew they wanted it on the East coast because of the battery belt that stretches from Michigan to Georgia.

Crapps says South Carolina rose to the top for a few reasons including talent, quality of life and infrastructure.

“The port of Charleston was a major factor for us as well as just the accessibility with the airport, with the roadway networks and having that proximity to many of our current and future partners,” Crapps explains. “The site at Camp Hall really rose to the top for us because the site was already a site that met a lot of our criteria, it was shovel ready and it was large enough.”

The site at Camp Hall off of Volvo Car Drive is more than 600 acres and located right down the street from Volvo. Redwood’s goal is to break ground by the end of this year and they expect to start hiring next year -- eventually creating 1,500 jobs.

Joey Von Nessen, a research economist at the University of South Carolina, says this investment is a game-changer.

“When we look at 1,500 jobs, those are the permanent jobs that will be created at the plant,” Von Nessen says. “But when we hear 1,500 jobs, we actually think 3,600 jobs with a significant employment multiplier effect meaning that Redwood is going to be buying supplies locally to facilitate its operations. That demand is going to generate additional jobs. And, in addition, the workers themselves are going to be spending their wages in the local economy throughout Berkeley County and the Charleston Tri-County region.”

Von Nessen did a full economic study of the impact Redwood would have on South Carolina.

But for Redwood to come to Berkeley County, the county also looked at making sure Redwood would be a good fit.

“A lot of what Berkeley County considers when analyzing for incentives is impact to infrastructure,” Kristen Lanier, Berkeley County’s Economic Development Director, says. “We are stressing putting jobs for people live. We want to make sure that we are being sensitive to our communities and we’re doing a lot of emphasis on wages.”

The average starting salary is going to be $27 dollars an hour, which Berkeley County says is well-suited for the workforce in the Camp Hall area. And because Redwood fit a lot of boxes for Berkeley County like wages, high-energy user, affiliated in the automotive industry, would be a benefit to the region, etc., Redwood was offered an incentive package that also made it equitable for the county.

“We backed in the math and said, okay, this one $3.5 billion industry is going to pay the tax equivalency of over 7,000 homes,” Lanier says. “That’s far less impact that you have to the infrastructure, the amount of land and resources and taxing that you have to have for our police and our EMS and our schools for 7,600 homes versus this one industry. It certainly is in the balance to have industry come in and kind of carry the weight on tax revenue.”

Through a Freedom of Information Request, we obtained copies of the agreement between Redwood, Berkeley County and the state.

Thomas Spade, a certified public accountant and senior instructor at the College of Charleston, explains that South Carolina isn’t exactly one of the most business-friendly states out there - at least according to its tax code. A reason they gave localities the power to negotiate property tax. Spade says Redwood is receiving massive tax breaks because of the expectation in the economic development.

“What is happening here is they have what’s called a Fee in Lieu of Tax,” Spade says. “Instead of paying six percent on the real estate and 10.5 percent on the personal property, they’re paying 4% on the value of the real estate and their equipment.”

“The agreement Redwood worked out with Berkeley County says that instead of paying the higher rates, they’re going to pay the four percent rate and anything at excess of $9 million that’s collected each year is going to go towards improving Highway 176 going from the interstate out to the plant,” Spade explains. “After 10 years, they’re going to be able to apply for a rebate of 25% of the fee that they pay and then after 10 more years, so years 21 through 30, they can then apply for 15% of rebate of the property tax that they pay. That’s on top of all the other corporate stuff that they’re getting.”

With that fee in lieu of tax -- that’s what allows the county to designate a portion of the fees Redwood will be paying to improvements to infrastructure and necessary improvements. They plan on allocating that to the widening of Highway 176 instead of asking the community to pay for it.

“176 widening phase 3 was always in the works, but it was not included in our last bond referendum,” Lanier says. “So it would be on the next Penny Sales Tax, which is seven years from now. With Redwood coming in, that kind of accelerated that and we knew that we needed to get that funded sooner.”

“It’s really exciting that our tax dollars are going toward something that will be a really meaningful contribution to Berkeley County and to enhancing the quality of life for the residents that are using that road for their everyday commute,” Crapps says.

This agreement with Redwood solidifies a partnership between the company and Berkeley County essentially for the next 30 years.

And with it being the largest investment in South Carolina history - everyone is optimistic it will bring about positive change to the community.

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