2010 SC Biz - Issue 2

Summer 2010

Doing business in S.C. The Business Resource Guide looks at key elements that influence economic development decisions

Second time around Second-career lawyers use prior careers to their advantage

Bi-Lo is back The grocery store chain ALSO IN THISfrom ISSUE: emerges bankruptcy

A look ahead

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Contents VOL.4, ISSUE 2

CEO and Publisher - Grady Johnson gjohnson@scbiznews.com • 843.849.3103 Vice President of Sales - Steve Fields sfields@scbiznews.com • 843.849.3110

Summer 2010

Managing Editor - Andy Owens aowens@scbiznews.com • 843.849.3141

COVER STORY BUSINESS RESOURCE GUIDE

25

Special Projects Editor - Allison Cooke Oliverius aoliverius@scbiznews.com • 843.849.3149 Senior Copy Editor - Beverly Morgan bmorgan@scbiznews.com • 843.849.3115

Forty companies have announced this year that they would either expand existing operations in South Carolina or establish new ones. So, what’s attracting these businesses to South Carolina and persuading them to stay? The Business Resource Guide looks at four key areas and their influence on economic development decisions across the state.

Staff Writer - Mike Fitts mfitts@scbiznews.com • 803.401.1094, ext. 204 Staff Writer - Ashley Fletcher Frampton aframpton@scbiznews.com • 843.849.3129 Staff Writer - James T. Hammond jhammond@scbiznews.com • 864.235.5677 Staff Writer - Scott Miller smiller@scbiznews.com • 864.235.5677 Staff Photographer - Leslie Halpern lhalpern@scbiznews.com • 843.849.3123 Art Director - Ryan Wilcox production1@scbiznews.com • 843.849.3117

Cover Photo/Leslie Halpern

FEATURES

Senior Graphic Designer - Jane Mattingly production2@scbiznews.com • 843.849.3118

14

Director of Business Development - Mark Wright mwright@scbiznews.com • 843.849.3143

Making a second career of the law

18

Account Executive - Bennett Parks bparks@scbiznews.com • 843.849.3126

Bi-Lo is back

Circulation and Event Manager - Kathy Allen kallen@scbiznews.com • 843.849.3113 Circulation and Event Assistant - Kim McManus

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kmcmanus@scbiznews.com • 843.849.3116

Market Adjustment 4 | Viewpoint 6 | Upfront 8 | Technovation 10 | Spotlight: Florence 12 | Trends

S & DISTR IBU

Ports, Logistics & Distribution in South Carolina

48 | 1,000 words

Flight plan

Southwest to serve South Carolina in 2011

$1 billion impact

SStudy t reveals impac t of aviation center on Upstate Page 44

A PUBLICA TI

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TION IN S .C.

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ON OF SC B IZ NEWS

Hot oil S.C. company conve rts cooking oil into biodiesel Page 46

Nominations will be accepted

May 11, 2010 through

June 30, 2010 2010 List of SC Fastest Growing Companies The South Carolina’s Fastest-Growing Companies program, the annual exclusive ranking of the Palmetto State’s most dynamic and successful companies is seeking the state’s best performing companies. This is your chance to be part of this exclusive group of best-of-breed companies whose achievements have been honored over the past nine years. This year’s top 25 highest-ranking companies will be honored at South Carolina’s Chamber of Commerce Annual Summit on Nov. 11, 2010 at Wild Dunes Resort near Charleston, S.C.

To learn more about South Carolina’s Fastest-Growing Companies, or to nominate your organization, visit www.thecapitalcorp.com or contact Cristina Schleifer at (864) 672-8400.

Viewpoint

Attorney general puts progress in reverse with health care suit

I

’ll put this right up front so you won’t one thing, it’s a Republican plan. have to wonder what I really think: AtIt’s “Romneycare,” passed at the federall torney General Henry McMaster had the level. It’s also modeled partly on earlier Re-chance to make a choice between support- publican initiatives and conservative propos-ing the evolution of a modern, 21st-century als going back as far as Richard Nixon, who,, d South Carolina and a South Carolina still according to columnist Ben Stein, presented rooted in the 19th and early 20th centuries, Congress with a health care reform proposall d d programs, as well ll as programs ffor and he chose the latter. even more comprehensive and “socialistic”” Medicaid I, for one, think it was a bad choice. The than the current law passed by the Demo- veterans and federal employees, so this is nothing new. lawsuit fi led by McMaster and other state at- crats.

As he also pointed out, the last dramatic torneys general challenges the coverage manIn an article published in The Wall Street date in the new federal health Journal in July 2008, Mitt step in the direction of “socializing” health care reform law. If successful, Romney touted his Mas- care was the expensive and expansive MediHaving a halfit will move South Carolina — sachusetts plan as one that care Part D drug program passed by Repuband the nation — backward eliminated the “free riders” licans under George W. Bush. million citizens From my perspective as a former smallinstead of forward. who were showing up at the without health There are lots of good reastate’s emergency rooms business owner, I can think of nothing worse for entrepreneurship and small business than sons for this conclusion. Dewithout insurance coverage. care coverage is spite its complexity, the new (Under a federal law in ef- the current insurance market for small-busia detriment to law creates a framework that fect since 1986, hospitals are ness health care coverage. It’s a disaster, and would significantly reduce obligated to provide urgent it inhibits the formation and growth of small the state’s future the number of people withcare to anyone who walks in businesses and makes it harder for them to productivity and out health care coverage, inthe door regardless of their compete with large, out-of-state businesses for workers. cluding nearly a half-million ability to pay.) prosperity.

Under the new law, insurance companies South Carolinians. Is this a In other words, what was bad thing? Is this something once a conservative Repub- won’t be able to discriminate on the basis of “we can’t afford”? lican proposal, having now been passed by pre-existing conditions, and entrepreneurs No, it’s not a bad thing, and we can afford the Democrats with zero Republican sup- and small businesses will have better access it as well as we can afford the present disor- port, has been recast as a socialist, liberal, to- to group and individual health coverage. ganized health care “system,” which is badly talitarian move to exert federal control over That’s a winner in my book. broken and getting worse. Having a half- health care. million citizens without health care coverage As one spokesman for South Carolina’s is a detriment to the state’s future productiv- hospitals pointed out, the federal governity and prosperity. ment has been influential in health care mat- Bill Settlemyer When McMaster and the others decided ters for decades through the Medicare and bsettlemyer@scbiznews.com to pick an ideological fight over the mandate, McMaster seemingly gave little thought to the possibility that he might be hurting genNEW SUBSCRIBERS: erations of South Carolinians if he and his cohorts prevail.

Subscribe online at SCBIZ reaches thousands of South Carolina’s top I have spoken to several key hospital www.scbizmag.com or call decision-makers. Add your name to the list by executives around the state, and they all 843.849.3116. ordering a print subscription to SCBIZ. agree that the new law’s comprehensive reCURRENT SUBSCRIBERS: forms, which provide greater consumer Your subscription also includes SCBIZ Daily. Delivrights and expanded access to affordable ered to your e-mail inbox each weekday morning, Change your address online coverage, would not be possible without the SCBIZ Daily is your link to statewide business news. at www.scbizmag.com or call mandate.

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Michelin uses sunflower oil for tire performance GREENVILLE – Have Michelin-rated chefs made an impact on tire design?

It might be the perfect collaboration, as Michelin uses sunflower oil to create a unique rubber compound in the new Michelin Primacy MXM4 tire.

It turns out that sunflower oil enhances the performance of this new luxury tire in wet and snowy weather.

While the vibrant, strong sunflower is recognized worldwide for its beauty, its benefits are not as apparent. The oil from sunflowers is valued as a healthy vegetable oil, and sunflower seeds are enjoyed as a tasty snack and nutritious ingredient added to many foods.

So, why would Michelin tire engineers turn to this readily available, but unusual ingredient as a solution for tire performance?

Because shorter is better, and the use of sunflower oil means stopping up to two car lengths shorter — up to 19 feet shorter in wet conditions — than a leading competitor, the company said.

The tire w will come in 13 replacement market sizes with rim diameters ranging from 16 to 19 inches.

Mohawk Industries usttries Inc. announces n expansion in ountty Marlboro County

First Quality larg largest project Anderson ever for Ande erso County

MARLBORO COUNTY UNTY – Mohawk Industries on to expand its yarn Inc. will invest $600 millio million acturingg facility in Marlboro and fiber manufacturing mpany will w add 87,500 square County. The company uring space ace to tthe facility, y alongg feet of manufacturing with additional yarn conversion equipment. een very pleased with the re“We have been ak River North Extrusion and sults of the Oak ns,” said Larry Perugini, vice Yarn operations, arn and extrusion manufacturpresident of yarn awk. “The people at the facility ing for Mohawk. have been keyy contributors to our company’s The amount Boeing will add success, and we are grateful for their good to South Carolina’s economy work and dedication.” each year, according to a Mohawk Industries opened the current Bennettsville facility in 2006 but has had yarn recent study that also said the manufacturing operations in the area for more company would add nearly than 50 years. The company will add 87,500 $3 billion to state taxes over square feet of manufacturing space, along three decades. with additional yarn conversion equipment.

Mohawk previously expanded the Oak Source: Miley & Associates Inc. River North facility in 2008 and employs more than 400 workers at the location.

$6.1 billion

6 SC BIZ | w w w. s c b i z m a g . c o m

ANDERSON – Anderson AND C County celebrated the largest eco onom development announceeconomic mentt in its history when First Quality Tissu formalized plans to invest T Tissue $ bi $1 billion and hire 1,000 people.

Thee privately held New York Th company announced it will acquire the former Shaw InA dustries facility near the Anderson Regional Airport to man create up to four paper manufacturing lines. The land inlines though First Quality did not cludes room for eight lines, comment on plans beyond the initial four lines.

Not only is this the largest project for Anderson la County, it’s one of the largest in the Upstate, said Gov. Mark Sanford. He noted that First Quality’s plan is larger Ma than the first BMW Manufacturing Co. announcement p in 1992 — to hire 500 people.

BMW now employs about 5,000 people.

The company will build two “paper machines,” the first of which will be operational in the third quarter of next year, the second a year later, said First Quality representative Frank Ludovina. In addition to the 1,000 new direct jobs, construction will generate an immediate impact with an additional 550 jobs, the S.C. Department of Commerce said.

S.C. third-most-affordable state in which to own a car South Carolina is the third-most-affordable state in which to own a car, according to a study by Edmunds.com.

The survey shows that it costs an average of $40,763 over a five-year period to own a car in the Palmetto State. Only New Hampshire and South Dakota are more affordable.

Owning a vehicle in Alaska, California or Hawaii costs about $10,000 more per year than it does in South Carolina.

The Edmunds study examines regional five-year ownership costs, consisting of depreciation, financing, taxes and fees, insurance premiums, fuel costs, maintenance and repairs for new and used vehicles.

States with the lowest average vehicle ownership costs in the country State New Hampshire South Dakota

Taxes, Fees

Depreciation

Financing, Interest

Insurance

$221

$16,359

$3,998

$5,739

Fuel Repairs $9,760

$754

True Cost to Own $39,136

$1,693

$16,417

$4,328

$4,819

$9,892

$831

$40,524

$378

$16,329

$4,039

$7,577

$9,217

$777

$40,763

Wisconsin

$1,835

$16,423

$4,202

$5,182

$9,899

$966

$41,358

North Dakota

$1,896

$16,416

$4,086

$5,694

$10,026

$793

$41,371

Fuel Repairs

True Cost to Own

South Carolina

States with the highest average vehicle ownership costs in the country State

Taxes, Fees Depreciation

Financing, Interest

Insurance

Hawaii

$1,787

$17,252

$5,423

$11,078

$12,250

$855

California

$3,430

$16,355

$5,239

$10,242

$11,180

$1,020

$50,480

$503

$17,136

$4,532

$11,772

$12,320

$981

$50,078

Nevada

$3,805

$16,455

$4,983

$9,325

$10,286

$981

$48,745

Connecticut

$2,004

$16,375

$4,761

$10,572

$10,481

$958

$47,990

Alaska

$51,233

Companies recognized by site selection magazine COLUMBIA – Trade & Industry Development magazine, a national site selection magazine, honored three S.C. projects with its Corporate Investment and Community Impact award, the S.C. Department of Commerce announced.

The companies, which were recruited by the Commerce Department in conjunction with local economic development allies, are the Boeing Co., Crane Co. and Red Ventures.

The honors, known as CiCi Awards, recognize corporations and investments from applicants throughout the country — more than 1,000 this year, according to the magazine’s editors. The award focuses on company investments and the economic developers responsible for securing the investment.

The criteria take into consideration the number of new jobs created, number of current jobs retained and way the project affected the community.

In 2009, Commerce’s recruitment efforts resulted in companies committing to create 18,004 new jobs and invest $2.4 billion, the department said.

Boeing, chosen as one of the 15 finalists for the Corporate Investment category, plans to create 3,800 jobs and invest approximately $750 million in North Charleston.

Crane Co. announced 1,000 new jobs and a $20 million investment in Barnwell County and Red Ventures announced 1,000 new jobs and a $20 million investment in Lancaster County. These two companies were chosen as two of the 15 finalists for the Community Impact category.

Nuclear can provide power, economic punch GOOSE CREEK – The Carolinas are national leaders in nuclear energy, but only continued investment and growth will keep it that way. More development also will mean billions of dollars for a region stretching from the Tar Heel State to North Georgia, according to a group that aims to organize and promote the carbonless energy source.

Already, South Carolina is home to seven nuclear reactors that produce more than 50% of the state’s power.

Four more reactors are on the way, including two at S.C. Electric & Gas’ $10 billion V.C. Summer station near Jenkinsville. The first is scheduled to open in 2016, and the second is set to follow in 2019.

“Nuclear knowledge here is unparalleled. We either build on it, develop it and grow the economy, or we lose it,” said Scott Carlberg, a communication specialist speaking on behalf of the Carolinas Nuclear Cluster.

The cluster, an arm of New Carolina: South Carolina’s Council on Competitiveness , recently hosted a meeting in Goose Creek that doubled as a pep rally and an informational session for manufacturers and service providers looking to jump on board the nuclear bandwagon.

The seminar was targeted at manufacturing companies — producing pipes, valves, fittings, electrical systems, HVAC systems and construction materials — and service providers — machine shops; electrical, mechanical and HVAC maintenance; waste cleanup; office maintenance; hazardous materials cleanup; painters; radiological protection; quality control; and laboratory services.

Representatives from SCE&G, Westinghouse Electric Co. — the nuclear power company that’s also part of the V.C. Summer contracting team — and others addressed a full room of executives eager to join the supply train of an industry that some experts predict will grow from $50 billion to $300 billion over the next 15 years.

w w w. s c b i z m a g . c o m | S u m m e r 2 0 1 0

7

Te c h n

vation

Laboratory designed to put nature’s fury in a box

By Mike Fitts, Staff Writer

A

mid the fields and scattered pines of Chester County, a new six-story concrete building juts out of the landscape. One of its walls is dotted with what looks like a grid of airplane engines, dozens of them.

This new facility is unique, in South Carolina and the world, according to its builders. The goal: to make homes and businesses safer in the face of potential disaster.

The facility is a huge testing laboratory being constructed by the Institute for Business & Home Safety. It is funded by almost 50 companies in the insurance field, mostly involved in property and casualty lines. The arrangement is similar to the Insurance Institute on Highway Safety, which conducts safety crash testing on autos and releases the results to the public.

The Chester County research center will do the same thing to houses and small commercial buildings.

The central lab is designed to subject buildings to some of the most brutal treatment that the climate can dish out.

The 105 turbine fans will blast highspeed winds through the chamber. Add pumped-in rain and it’s an indoor hurricane. Researchers also will be able to shoot realistic hail at roofs or even add burning embers to the winds to test a

home’s potential resistance to a nearby wildfire.

“We are putting Mother Nature in a big box,” said Julie Rochman, CEO of the institute.

Property insurance businesses have been thinking about such a facility for years as a way to reduce the damage that homes and small business suffer — and what the industry must cover, Rochman said.

“We shouldn’t be losing as many homes and businesses as we do today,” she said.

The $40 million complex is scheduled to begin testing in the fall.

The research done in Chester County will change the way homes are built, Rochman said. She was speaking at a tour of the center in March, as it was being completed. Home insurers already are involved in the way building codes are written, and this data will be added to that discussion.

The study results and video will be used to help popularize building techniques and materials that hold up better to severe weather, Rochman said. The results also will be used to see whether

Rendering above, photo at right/Courtesy of the Institute of Business and Home Safety

8 SC BIZ | w w w. s c b i z m a g . c o m

Photo/Mike Fi tts

government and private incentives are going to things that actually work, she said.

The heavy blows that hurricanes have landed in recent years are a driving force in the lab’s creation, Rochman said. She notes that storms have frequently landed in populated areas and that hurricaneforce winds have pushed as far inland as Ohio.

People still need and want to live at the coast, though, and that means a need for insurance, Rochman said.

The main laboratory is a vast concrete square, almost 50 yards across and six stories high. One wall, when complete, will feature 105 turbine fans, each with a six-foot opening. At full blast, the fans will be able to generate winds of 140 mph, the force of a strong Category 3 hurricane. Even with the fans off, the lab’s configuration makes a gentle breeze more forceful; the room is wider on one side than the other, adding force to the winds.

The floor features a 55-foot turntable so the facility can test a structure at any possible angle. House movers were constructed so that test buildings could be moved inside gently.

The facility will try to use ice balls that approximate the composition of real hail, Rochman said. Right now, tests for hail

sometimes are done with steel balls shot out of guns, a less realistic test.

The support structure for the facility also is massive. For wildfire testing, there will be a 175,000-gallon water tank. The site has its own electrical substation, to help meet the massive power demand of those fans. The system will draw up to 30 megawatts of electricity — enough to power 9,000 homes.

That electricity demand is part of the reason the facility was put in Chester County. The institute wanted the lab to be near a source of reliable, renewable energy, so it had to be near a nuclear power plant. The facility will have a set schedule with Duke Energy, to prevent problems when it uses so much power then quickly shuts down. It will run only during business hours — power demand is less than in evenings. Duke Energy has been a great partner in the project, Rochman said. “We’re a great customer.”

The lab also needed to be more than 100 miles inland, ironically, to help protect it from hurricane damage. And it needed to be near a major air travel hub, in this case Charlotte.

The economic development teams in North and South Carolina worked

together to find the right site, Rochman said.

Once the lab is up and running in the fourth quarter, it will employ about 20 people, in addition to the local labor that will be called upon for the construction of homes and small business structures to be tested.

That’s not a huge new employer, but Chester County is glad to land the facility, according to County Council Chairman Carlisle Roddey.

“We don’t get a lot of research” industry Roddey said.

There’s also the possibility that other organizations interested in partnering with the institute will want to locate nearby, Rochman said.

People in construction and other fields have been contacting the institute to see whether the lab can conduct research they need, Rochman said.

They’ve even had a request to test the connection between two floors of a highrise, she said. And the institute is looking into it. The laboratory is designed to answer questions that couldn’t previously be tested scientifically in the real world, Rochman said.

“We’re just going to keep on asking questions,” she said.

SC

BIZ

Florence F

Spotlight

Florence C

ounty pop

Florence

By Allison Cooke Oliverius, Special Projects Editor

F

lorence County officials recently celebrated the news that McCall Farms Inc. was investing $9 million to expand its operations and generate 65 new jobs. The company, which farms and cans tomatoes, corn, squash and other produce, opened its Florence County facility in 2007 and already employs about 100 workers.

“McCall Farms has deep roots set in the soil of our area. This expansion is a true testament to their belief in hard work, strong work ethics and exceptional products,” Florence County Council Chairman K.G. “Rusty” Smith said at the announcement.

The expansion also is a testament to the fact that Florence County is just a good place to do business, Smith said.

“We certainly have what I feel like is one of the most desirable areas in the whole Southeast for prospective employers. We have outstanding infrastructure, good education system, some of the finest health care available,” Smith said. “We have committed employees that will give a hard day’s work for a day’s pay. We also have a strong business-minded County Council that has set up an environment to attract businesses to the area.”

Team approach

Photos courtesy of the Florence Convention & Visitors Bureau

10 SC BIZ | w w w. s c b i z m a g . c o m

Part of that environment is the team that has been assembled to push economic development. It includes Florence County Council, the Florence County Economic Development Partnership — led by Joe King — and Florence County Progress, the private-sector arm of the economic development partnership. The team also includes other elected officials and a host of local business owners and organizations.

“We work extremely well together,” Smith

acts

ulation: ....

1,042,01

3 10 largest employers Honda of So uth Carolina ..................

Nan Ya Plast ..... 1,625 ics Corp. Am erica ..........

ESAB Weldin .. ...... 860 g and Cuttin g Products ..

Smurfit-Sto ....... 650 ne Containe r Corp. ........

Nucor Corp ......... 550 . Vulcraft Div ision ..........

QVC Inc. .... .......... 400 .................. ..................

G.E. Medica .......... 400 l Systems .. ..................

Roche Caro .......... 372 lina ............ ..................

ACS Techno .......... 308 logies ........ ..................

Pepsi Cola B .......... 270 ottling Co. .. .................. ........ 221 Source: Indu strial and m employers, anufacturing 2008. Floren ce County Ec onomic Developmen t Partnershi p.

said of the various groups. “I think the key is teamwork and hard work. I mean, we really get after it, and I think the prospects sense that we want them here and that we will be here with them along the way. When we meet prospects, I think they see the kind of people we are and they feel a sense of companionship.”

This team approach has helped bring more than 130 companies to the area with a manufacturing presence, including Du Pont, ESAB Welding and Cutting, H.J. Heinz Co., Honda of South Carolina, GE Healthcare, Johnson Controls, Monster.com, QVC and Roche Carolina Inc. In the past five years, new and expanding businesses have invested more than $1.1 billion.

Smith fires off several assets the county touts to prospects, including Francis Marion University, the Southeastern Institute of Manufacturing & Technology, strong health care providers, shovel-ready industrial sites and more.

He also mentions Pathways for Progress, a $400 million investment the county is making to widen all the major roads into and out of the county to four lanes.

“I think in the business world, Florence County is becoming a business capital for South Carolina and beyond,” Smith said.

“It’s been outstanding to see the county’s progress,” added Smith, who grew up in Lake City and has served on County Council since the 1980s. “You feel a certain level of pride having worked as part of a team to transition an area into something that is a mecca for business.”

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w w w. s c b i z m a g . c o m | S u m m e r 2 0 1 0

11

Tr e n d s Unemployment rate

Employment Employment

12%

Jan. ’10

Feb. ’10

March ’10

April ’10

1,785,000

1,795,500

1,811,400

1,822,900

Government

354,300

356,800

357,900

359,800

Leisure & Hospitality

189,900

192,000

196,600

2,075,000

Manufacturing

207,500

207,500

207,300

207,700

Trade, Transportation & Utilities

340,600

341,800

345,800

346,000

Unemployed

273,455

271,140

264,452

250,378

Employed (Total Nonagricultural)

10% 8% 6% 4% 2% J

M A

M

J

J A

S.C. 2009

S

O

N

D

U.S. 2010

<

*Seasonally adjusted rates.

Source: S.C. Employment Security Commission, U.S. Department of Labor

< < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < <

< <

F

S.C. 2010

Unemployment Rate Unemp V

<

< <

Source: S.C. Employment Security Commission on

Higher than previous month

8.7% - 9.9%

V =

Lower

10.0% - 11.9%

Same

12.0% - 14.9% 15.0% - 19.9% 20% & higher

Source: S.C. EEmployment Security Commission, April 2010. County rates are not seasonally adjusted

2010 Net Taxable Sales County

Jan.

Feb.

Hotel Occupancy Rates March

Month

2010

2009

% change

36.5

36.8

-0.82%

April

Lowcountry Berkeley

$131,399,412

$76,656,048

$111,510,481

$125,179,348

Jan.

Charleston

$488,069,948

$350,746,147

$407,054,781

$491,372,364

Feb.

45.8

45.6

0.44%

March

54.3

51.2

5.71%

April

60.6

57.7

5.03%

Avg. YTD

49.3

47.8

-3.14%

Dorchester

$50,286,894

$38,643,116

$46,154,550

$52,243,064

Midlands Lexington

$283,644,430

$198,662,881

$230,133,496

$266,549,553

Newberry

$20,573,775

$15,207,425

$18,829,933

$20,833,237

Orangeburg

$54,797,835

$42,737,124

$50,579,182

$59,950,325

Richland

$450,887,163

$355,115,054

$403,674,038

$447,574,415

Sumter

$66,443,539

$48,314,324

$59,440,584

$65,749,841

Anderson

$143,577,950

$94,746,162

$118,213,268

$128,552,976

Greenville

$524,582,323

$358,896,988

$447,123,794

$485.889,663

Upstate

Spartanburg Statewide

$239,457,485

$162,077,652

$209,756,308

$224,777,549

$4,608,434,903

$3,280,992,982

$3,972,027,584

$4,563,917,221

Source: S.C. Department of Revenue & Taxation

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Source: Smith Travel Research

Airplane Passenger Boardings Airport

Apr. ’09

Q1 ’09

Jan. ’10

Apr. ’10

Q1 ’10

% chg.*

Charleston International Airport

Jan. ’09 65,186

Feb. ’09 Mar. ’09 67,864

90,074

98,837

321,961

61,659

Feb. ’10 Mar. ’10 58,403

82,133

93,059

295,254

-8.20%

GSP International Airport

42,609

39,790

51,444

52,280

186,123

42,682

40,408

51,140

51,653

185,883

-0.10%

Hilton Head Island Airport

2,510

2,976

5,547

6,872

17,905

2,539

2,916

6,044

7,596

19,095

6.60%

Myrtle Beach International Airport

33,781

35,557

59,589

73,563

202,490

33,416

33,385

57,399

69,574

193,774

-4.30%

Columbia Metropolitan Airport

35,661

35,848

42,683

46,290

160,482

35,739

32,645

41,442

44,627

154,453

-3.70%

848,459

-4.50%

Total

888,961

Source: Individual airports. *Represents change from Q1 2009 to Q1 2010.

Economic Development Announcements: Feb. 6, 2010 - May 31, 2010 Month

New/Expansion

Company

County

Investment

Jobs Created

February

N

Defense Venture Group

Lancaster

$50 million

220

February

E

Fisher Barton S.C. Inc.

Laurens

$2 million

15

February

N

Solar Energy Initiatives Inc.

Williamsburg

NP

200

February

N

Gildan Activewear

Berkeley

NP

250

February

N

Bradman Lake

York

$3.5 million

51

February

E

American Truetzchler Inc.

Greer

$3.5 million

30

February

E

Bosch Rexroth Corp.

Greenville

$10 million

50

February

E

U.S. Foodservice

Lexington

NP

100

March

N

MTU Detroit Diesel

Aiken

$45 million

250

March

E

Republic National Distributing Co.

Lexington

$11.8 million

NP

March

N

IMO Group

Dorchester

$47 million

190

March

N

Moulton Logistics Management

Berkeley

$25 million

500

March

E

Caterpillar

Newberry

NP

500

March

E

McCall Farms Inc.

Florence

$9 million

65

March

E

Leigh Fibers

Spartanburg

$10.1 million

40

April

N

Greyne Custom Wood Co.

Lancaster

$5 million

50

April

N

Drew Industries

Chester

$978,300

125

April

N

Immedion LLC

Richland

NP

15

April

N

Charleston Pie Man

Georgetown

$500,000

80

April

E

ResMed

Spartanburg

NP

50

April

N

Myrtle Beach Recycling Inc.

Horry

$5 million

15

April

N

ACAS Landing Gear

Marion

$5 million

300

April

E

US Fibers

Edgefield

$10.1 million

85

May

N

Allegro Industries

Pickens

$4.53 million

45

May

N

MCA Sign Co.

Aiken

$12 million

125

May

N

Nutramax Laboratories

Lancaster

$12.5 million

200

May

N

Alexium Inc.

Greenville

$8 million

200

May

N

Strategic Outsourcing Inc.

Lancaster

$1 mllion

NP

May

N

First Quality Tissue

Anderson

$1 billion

1,000

May

N

Quality Software Services Inc.

Richland

$480,000

70

May

E

Kaydon Corp.

Sumter

$8.9 million

75

May

N

Palmetto State Armory

Richland

$2.9 million

50

May

E

Mohawk Industries Inc.

Marlboro

$60 million

NP

Source: S.C. Department of Commerce, NP = Not provided w w w. s c b i z m a g . c o m | S u m m e r 2 0 1 0 1 3

By Jam es T. H ammo nd, Sta ff

A

ttorney J.W. Matthews III looks like a fish out of water at the Associated Builders and Contractors luncheon, in his courtroom suit and tie among the open-collared shirts with construction company logos.

But Matthews, a licensed professional engineer who built front-line bases for the Air Force in Bosnia and Saudi Arabia, can talk the talk with these engineers and builders.

He’s one of a handful of attorneys at Haynsworth Sinkler Boyd who have built their practices on prior careers as far-flung as engineering, banking, aviation or education.

They are second-career lawyers, professionals in other fields who found their ultimate calling in litigation for those industries.

A 2004 survey by the National Association of Legal Professionals, which polled 2,144 lawyers, concluded that second-career lawyers have a high level of maturity and a work ethic that is not compromised by lack of stamina or inability to adapt to the law firm

14

SC BIZ | w w w. s c b i z m a g . c o m

Writer

“With a cell phone and a laptop computer, you can practice law anywhere.”

John Hodge attorney, Haynsworth Sinkler Boyd

environment. About one in five of those surveyed felt that the skills of their prior career offered an advantage in their legal practice.

Matthews said he always wanted to be a lawyer. He always felt the tug of advocacy, the need to take a side in an issue. But a fully paid Air Force ROTC scholarship at Georgia Tech that specified a major in engineering made his first higher education decision for him.

“The Air Force needed engineers,” Matthews said, and as a result, he graduated with a degree in mechanical engineering.

The military is often a path for these second-career lawyers, he said, because the person’s service earns an education benefit, whether it is an ROTC scholarship on the front end or the GI Bill after service. That leaves the would-be attorney with the financial obligation for only one professional education: law school.

Matthews served for almost six years with Red Horse, the Air Force counterpart to the Navy’s Construction Battalion, or Seabees.

He led teams of engineers and combat construction workers in setting up forward bases for U.S. troops in Bosnia and building replacement bases and quarters in Saudi Arabia after the Khobar Towers were destroyed in a 1996 terrorist attack. And he worked in design and construction management on large military buildings at Pope Air Force Base at Fort Bragg, N.C. He put in the required four years of work in his engineering field to qualify for the Professional Engineer license. But when his

military service was done, he answered his long-felt calling; he enrolled in law school at the University of Florida. He also felt the tug of home, so he returned to Greenville and joined the Haynsworth law firm, where he has worked for a decade and been a shareholder for about three years.

When he’s not representing the construction industry, Matthews has a specialty in an emerging field of law he calls E-discovery.

Documents, contracts and agreements that once required a signature on a piece of paper are today consummated and approved by email. When those transactions are involved in litigation, all sorts of new issues arise, Matthews said.

“The way documents are produced and distributed has changed because of servers and cloud computing,” Matthews said. “What court has jurisdiction over files created on Google Documents, for example. Documents in litigation in High Point, N.C., may be on a server in another state.

“We’re finding that the way people conceptualize documents is different because of computers,” he said. “The law follows the culture. The fundamental concept of what is true is changing, and the quantity of communication has expanded exponentially.”

Haynsworth Sinkler Boyd has other attorneys, too, who had careers before they became lawyers. Joe Clark in Columbia was a banker; Randy Epting in Columbia was in public accounting.

Some who had prior careers say that those experiences are less a factor in their legal careers than for someone like Matthews but that they continue to influence their lives and their involvement outside the office.

“It’s hard to say exactly how it continues to influence me, but it definitely does,” said Bachman Smith IV, a Charleston-based attorney with Haynsworth Sinkler Boyd.

Smith makes his practice in litigation involving construction, defense and maritime issues. He spent some early years working with a cabinetmaker, likes to work with his hands and says “construction just makes sense to me.”

Before going to the University of South Carolina School of Law, Smith spent about eight years as a teacher and school administrator. He left one school where he had been promoted to administrative jobs so that he could get back to teaching American

Top: Bachman Smith (Photo/Leslie Halpern). Left: John Hodge (Photo provided). Right: J.W. Matthews (Photo/ Jim Hammond)

w w w. s c b i z m a g . c o m | S u m m e r 2 0 1 0

15

literature at another school.

But with his expectation at the time that his teacher salary would top out at about $32,000, he decided on a law career in order to be able to provide for his own children in the same fashion as did his lawyer father.

And even though he has not built his practice on his former career, he said, “It didn’t take long to see that I needed to fill the void.”

Today, he’s on the board of My Sister’s House, a nonprofit organization that serves victims of domestic violence. Among other things, he sometimes lectures in schools about domestic violence.

At age 40, Smith says his life and career are still a work in progress. He envisions possibly teaching law someday. “The process of education just makes sense to me,” he said.

John Hodge, 54, also an attorney with the firm, has managed to combine three professions into a successful legal practice.

He earned his undergraduate degree in geology from Duke University and worked in environmental science.

He earned a commercial airline pilot’s license and flew charters and night freight assignments while in law school at USC. And

Prior experience of second-career attorneys Nonprofit organization............................... 6% Engineering, high-tech or bio-tech .......11.8% Other business ..................................... 39.5% Education ..............................................11.2% Government – non-military ...................10.5% Source: 2004 National Assocation of Legal Professionals survey of 1,148 respondents who had a prior career

he spent 20 years flying for Piedmont Airlines and its successor, US Airways.

About five years ago, he retired his pilot’s wings to focus on a law practice in environmental law and aviation litigation, contracts and regulatory issues.

During his double life as lawyer and airline pilot, he accumulated about 3,000 hours of flight time and often found himself juggling court dates with his flight assignments.

“With a cell phone and a laptop computer, you can practice law anywhere,” Hodge said.

But he cautioned that “you can’t let the technology rule your life or keep you from having a life.”

Growing up in Spartanburg, Hodge said, “I was always interested in geology and the environment before it was cool.”

“I found that the policymakers and government couldn’t talk to the scientists,” Hodge said. “I wanted to be able to go from one field to the other and feel comfortable in both.”

He is currently helping rewrite the aeronautics regulations for the state — he said they have not been updated in years.

And Hodge was instrumental in drafting the agreement to protect 7,500 acres of wetlands as part of the environmental permitting process for the Vought Aircraft plant in North Charleston. Those permits, which anticipated future expansion of the industrial plants there, eased the path for Boeing to select the site for its new aircraft assembly plant, Hodge said.

“It was a win-win for the business and for the environment,” Hodge said.

Matthews, the construction lawyer, believes his earlier career — and those of other attorneys — “enrich the legal profession.”

“It gives you something you can’t get any other way than through experience,” Matthews said.

SC

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AIKEN AND EDGEFIELD COUNTIES: WHERE MANUFACTURERS AND TECHNOLOGY MEET PO Box 1708 Aiken, SC 29802 www.edpsc.org fhumes@usca.edu

16

SC BIZ | w w w. s c b i z m a g . c o m

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| Summer 2010

17

BI-LO IS BACK Under the leadership of Michael Byars, the grocery store chain didn’t just survive bankruptcy, ‘we thrived through it’

By Scott Miller, Staff Writer

M

ichael Byars joined Bi-Lo a month before the Mauldin-based grocery chain filed for bankruptcy in March 2009.

He knew before accepting the job as president and CEO that bankruptcy was a possibility.

“My past history has been going places and helping companies improve. I’ve been in those situations before,” Byars said. “I’d never been through a bankruptcy, but I looked at that as an opportunity to grow and learn. And I believed in Bi-Lo.” Byars knows the industry. At age 15, the Gaffney native got a job as a bagger at Ingles.

He stayed there through high school and into college, before the fast-expanding Food Lion chain came to town.

Offered a dollar more an hour in pay, Byars took a job with Ingles’ newest competitor in town. He would spend the next 19 years with Food Lion and 25 with its parent company, Delhaize Group — which made an unsuccessful pitch to buy Bi-Lo during bankruptcy proceedings.

Byars climbed the ladder at Food Lion from store manager to operations director for a three-state region. When Delhaize Group

18

SC BIZ | w w w. s c b i z m a g . c o m

Michael Byars brought Bi-Lo back from Chapter 11 bankruptcy. (Photo/provided)

bought Kash n’ Karry in Florida in 1996, Byars became COO. Under his leadership, Kash n’ Karry grew to have 137 stores in the Sunshine State with more than 11,100 employees.

In 2004, Byars became president and CEO of Minyard Food Stores in Dallas; he held that position for four years.

Then came the opportunity at Bi-Lo, a store Byars had shopped at with his grandparents as a boy.

Byars took over in February 2009. Bi-Lo

filed for bankruptcy in March of that year because of an upcoming debt maturity that it was unable to refinance.

Bi-Lo emerged from bankruptcy about 14 months later. The potential merger with Delhaize’s Food Lion had fallen through.

“Our fiduciary responsibilities were to evaluate all options and provide the best return to our creditors,” Byars said. “We determined that wasn’t the best route.”

Instead, Bi-Lo’s owner, Lone Star Funds,

made a $150 million equity investment and remains the majority owner. In addition, Credit Suisse provided $200 million in committed term-loan financing and General Electric Capital has provided a $150 million revolving credit facility. Through its financial restructuring, Bi-Lo has reduced its funded indebtedness by approximately $60 million.

A judge confirmed Bi-Lo’s reorganization plan April 29, and Bi-Lo officially emerged from Chapter 11 on May 12.

“We didn’t survive bankruptcy; we thrived through it. We actually made ourselves more competitive,” Byars said. “You’ve got to have committed people and a committed brand to make it through Chapter 11. We were fortunate to have that. We are one of the few retail groups that made it through bankruptcy.”

In 2008, Bi-Lo had declining sales and profits, Byars said. The company reversed that trend last year while operating under bankruptcy protection. The company has not seen a year-over-year sales increase this strong since Winn-Dixie pulled out of the S.C. market in 2005, Byars said.

“We went from a negative trend in 2008 to a positive trend in one of the most challenging economic times this country has seen in quite some time,” Byars said.

The company did so by improving customer service and providing more discounts to customers, he said. Bi-Lo launched a partnership with S.C. gas stations that allows Bi-Lo customers to save on gas, for example. A new “price lock” program gives customers the best prices on seasonal items for eight weeks.

Bi-Lo also started a double-coupon program, launched a Wednesday promotion that gives senior citizens a 5% discount and began a new employee training program to improve customer service.

“The No. 1 thing we set out to do was improve our value proposition,” Byars said. “Our customers are more savvy today, and they demand value. They want all the value and they

don’t want to give up quality, freshness and variety.”

And customers have alternative options.

“There’s a supermarket on almost every corner,” Byars said.

That competition has made it difficult for smaller, regional grocery chains to survive.

Byars said he expects more consolidation within the industry, particularly with more foreign investment coming into the United States.

“There has been predictions that there will be more consolidations, and you’ll probably see consolidations throughout the Southeast in the next three to five years,” Byars said.

“That doesn’t mean that the regional grocery stores can’t be successful.”

And it doesn’t mean Bi-Lo won’t remain independent.

The company operates 207 supermarkets in South Carolina, North Carolina, Georgia and Tennessee and employs approximately 15,100 people. That’s seven fewer stores than Bi-Lo operated before filing for bankruptcy, and no more stores are expected to be closed, Byars said. At one time, Bi-Lo employed more than 17,000 people.

In the next few years, Bi-Lo is unlikely to build new stores or expand into new markets, he said. Instead, customers will see refurbished Bi-Lo stores with an updated color scheme, a new logo with a leaf replacing the hyphen in Bi-Lo and new looks for the deli, produce and bakery departments, he said.

“The focus will be on remodels and updates for two to three years,” Byars said.

SC

BIZ

w w w. s c b i z m a g . c o m | S u m m e r 2 0 1 0

19

MARKET U A N ADJUSTMENT DJ STME T Ways banks are dealing with surplus property

By Ashley Fletcher Frampton, Staff Writer

B

ack when banks owned only a few pieces of real estate at a time, Donna Lehmer, asset resolution manager at First Federal of Charleston, handled much of the paperwork herself.

Lehmer coordinated with listing agents, made sure properties were kept up and worked with closing attorneys to complete the sales.

But the ongoing foreclosure crisis has left First Federal, like other financial institutions, with more real estate to juggle, along with borrower requests for short sales and deedsin-lieu-of-foreclosure.

First Federal has responded by increasing staff and outsourcing certain tasks. Other banks, similarly, have restructured to keep up with the increased volume of troubled loans and acquired properties that must be sold.

20

SC BIZ | w w w. s c b i z m a g . c o m

But while banks are holding more real es- to Wilmington, N.C. “You figure going from 12 the year before tate than in years past and using some new to 80 a year later, it’s hard to be ready for that,” methods to dispose of it, officials say they’re Lehmer said. not looking to offload it at bargain prices, as First Federal’s asset manager, located in many buyers would like to believe.

Greenville, finds listing agents wherever foreclosed properties are located and handles the ‘Hard to be ready’ At First Federal, Lehmer’s department has re-keying of locks, lawn maintenance and doubled in size, from five to 10, and has con- other presale tasks. She coordinates with the tracted with an outside asset manager who dozens of agents and lawyers and others inhelps keep tabs on property. volved — tasks Lehmer said she no longer has “If you’d have said two years ago that I’d the time to handle. use an asset manager, I would have laughed at “My asset manager deals with all of those you,” Lehmer said. people, and I deal with her,” she said.

Lehmer expects an even larger increase But two years ago, First Federal wasn’t trying to sell 80 properties at once, as it was in bank-owned real estate in the coming about two months ago. The homes, land and months.

“My projection is we’re not going to get our commercial properties stretch from Beaufort

big influx of inventory until the last three or four months of this calendar year,” she said.

That expectation is based in part on foreclosure moratoriums put in place early last year that delayed foreclosure proceedings. It’s also based on the backlog of properties now awaiting foreclosure hearings and sales in the courts.

In February 2009, First Federal was among financial institutions that halted foreclosures on owner-occupied homes for a few months while trying to work with borrowers on loan modifications. First Federal’s moratorium lasted until May. About the time that moratorium ended, the S.C. Supreme Court ordered a temporary freeze on foreclosures statewide to allow time for lenders to determine whether residential loans were eligible for modification under a new federal program.

Because of those combined delays, properties now might be as much as 18 to 20 months past-due at the time the foreclosure is completed, Lehmer said.

Commercial focus Delays surrounding residential foreclosures won’t have much of an impact on S.C. Bank and Trust, said Tommy Bouchette, executive vice president for special assets management.

“We, like many banks, sold those mortgages into secondary markets,” he said.

Because the Columbia-based bank, which has offices around the state, does not own and service those home loans, it isn’t the financial institution that winds up foreclosing when the loans are in default.

But SCBT has changed its operations to deal with its distressed commercial real estate loans. Those loans cover residential properties in cases where the bank provided financing to subdivision developers or speculative builders.

About two years ago, as bank officials saw economic conditions deteriorating, SCBT set up a special assets department to work with borrowers to avoid foreclosure. The four-person department also manages the foreclosure process and subsequent efforts to sell the real estate once the bank owns it.

Before the economic downturn, SCBT didn’t need a centralized department to deal with real estate issues, Bouchette said.

“Each of our regional executives would basically handle these things,” he said.

Bouchette said SCBT’s real estate owned

Photo/Leslie Halpern

w w w. s c b i z m a g . c o m | S u m m e r 2 0 1 0

21

MARKET ADJUSTMENT

Photo/Leslie Halpern

fluctuates up and down but isn’t a large amount relative to the size of the bank. He said SCBT tries to keep the amount of real estate owned low by working with borrowers to sell properties, for less than the loan balance in some cases.

“We put a lot of energy on the front end to try to get the property liquidated,” Bouchette said.

SCBT’s ability to meet with borrowers and find workout strategies is an advantage over large financial institutions that are servicing mortgage loans scattered around the country, he said. Some of those institutions have little choice but to foreclose and sell properties to preserve capital, Bouchette said.

But doing so can mean less money for the bank, in the end.

“Once it becomes a bank-owned property, it’s harder to get as much,” he said. “Most prospective buyers will offer less.”

Pricing and listing Real estate and banking officials say there is widespread belief among buyers that banks will accept low offers for properties because they are motivated to get rid of them.

But Lehmer said that’s not how it works at First Federal.

“We’re regulated. I have shareholders to answer to,” she said. “If I have a property that’s worth $100,000, I can’t sell it for $50,000.”

22

SC BIZ | w w w. s c b i z m a g . c o m

Property is listed at appraised values, she said.

Bank-owned property could be priced low relative to comparable properties, she said, because the bank sells the property as is. But Lehmer said she isn’t giving away real estate.

The approach is the same for short sales: Offers are matched up against the home’s value.

“If they’re getting close to it, it makes sense for us” to accept the offer, Lehmer said. “Banks do not want to own property. That’s the last thing we want.”

In recent months, Lehmer said First Federal has had about 25% of its owned real estate under contract. In March, the bank peaked at about 40% under contract. The soon-to-expire federal homebuyer tax credits have helped the bank sell some of its single-family homes, she said.

While First Federal works with agents within its markets to list properties, an auction in March helped find buyers for some properties that were not moving, Lehmer said.

She said it’s rare these days for a piece of real estate to find a buyer at counties’ foreclosure sales, which are held monthly — or more frequently now in some areas because of court backlogs.

A few years ago, most foreclosure properties sold that way, Lehmer said. Banks didn’t foreclose on many properties, and real estate

was appreciating quickly, drawing buyers.

Some banks are selling large numbers of properties to investors at discounted prices.

But Lehmer said that isn’t a strategy that First Federal is using.

“The reason is, their offers are low based on what I can get selling one at a time,” she said.

Bouchette said the same is true at SCBT. Selling properties individually can result in sales prices 30% to 40% higher than selling to investors in bulk, he said.

SCBT tries to sell through its networks before listing properties with agents.

“With offices all around the state, we ask our lenders and bankers in those markets to see if they have people interested. If not, we’ll list it with a broker, usually in that market,” he said.

“We’ve been able to move a fair amount of property internally without having to use any Realtors,” Bouchette said.

He said SCBT tries to avoid selling properties at low prices that will bring down surrounding property values.

Cameron Jordan, a spokeswoman for Winston-Salem-based BB&T, said the bank lists its properties with outside agents about 90% of the time. BB&T has asset managers throughout its geographic footprint that work with agents.

BB&T also prefers not to sell in bulk.

“From time to time we may auction a home, but bulk sale of properties is not our preferred method,” Jordan said.

Jordan said BB&T has a loss mitigation program and tries to keep homeowners in their homes. But once the bank acquires homes, it works to sell them.

On the other hand, BB&T might hold onto lots and land awhile longer, waiting for a stronger market.

“We believe that houses are organic and people need to live in them,” Jordan said.

Wachovia spokeswoman Jamie Dexter said the bank uses Premiere Asset Services, a division of Wells Fargo Home Mortgage, to value, manage and dispose of foreclosure properties.

Premiere Asset Services works with local real estate agents to sell homes as soon as possible, Dexter said. But in many cases, she said government entities Freddie Mac, Fannie Mae and the U.S. Department of Housing and Urban Development manage home sales.

She declined to discuss whether bank operations have changed in response to the foreclosure crisis, saying that information is proprietary.

Find Success with GPS. Your Source for Staffing.

Business opportunities One Upstate real estate firm is trying to carve a new niche for itself amid the foreclosure crisis and the burden it has placed on bank employees.

The Marchant Co. recently began marketing services beyond simply selling property to banks, which could stand to outsource some of their workload.

“The amount of real estate that is in some form of trouble in one way or another is almost overwhelming,” said Chuck Werner, an agent with the Marchant Co. who used to work in a bank’s special assets division.

The Marchant Co. is offering to manage properties that have tenants, for example, or inspect properties regularly and create monthly reports for banks and their regulators, if needed.

Part of the challenge for banks is that properties aren’t selling quickly, in general, so bank-owned inventories are mounting, Werner said.

If this month’s properties would sell within 60 days, it would be easier for banks to handle next month’s properties, he said.

“Some banks are getting through this thing pretty well,” Werner said. “Others are floundering as far as being able to handle it and knowing which way to go.”

Local inventory Getting a handle on the number of bankowned homes in the Charleston market is difficult.

The Charleston Trident Association of Realtors’ Multiple Listing Service tracks how many homes up for sale are owned by banks, but agents are not required to list them as such, said Meghan Weinreich, marketing and communications director.

Many choose not to because of the low offers that often follow, she said.

In a recent count, 198 were listed as bankowned, but Weinreich said Realtors association officials feel sure that number is lower than the true total.

As another indicator, she pointed to data from the research firm RealtyTrac, which recently reported 2,629 distressed properties locally, including 1,130 in bank ownership.

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Orangeburg County Development Commission C i i 1.888.761.OCDC (6232) • www.ocdc.com www.fourmoons.com • www.scsu.edu • www.claÁin.edu • www.octech.edu • www.husqvarna.com

w w w. s c b i z m a g . c o m | S u m m e r 2 0 1 0

23

COMMERCIAL/INDUSTRIAL SPACE | FINANCE | WORK FORCE | INFRASTRUCTURE

M

ore than 40 companies have announced this year that they would either expand existing operations or establish new ones in South Carolina. At press time, the announcements totaled approximately $525.8 million in investment and the expected creation of more than 7,000 jobs, according to the S.C. Department of Commerce.

So, what’s attracting these businesses to South Carolina and persuading them to stay?

Frank Ludovina, president of First Quality Tissue, said his company was drawn to Anderson County by the “work force, work ethic, infrastructure, business environment and incentives package made available from state and local resources.”

First Quality announced plans in May to invest $1 billion to build four manufacturing lines in Anderson County and hire 1,000 workers.

Marion G. Swink, president of McCall Farms Inc., said the “excellent business environment and solid labor force” contributed to his company’s decision to invest an additional $9 million in Florence County to expand its operations.

In addition to the large announcements, a growing number of small businesses with potential for growth are taking advantage of incubators all across the state.

Regardless of a company’s size, many of the same factors come into play when a business owner is considering an investment — ranging from real estate to infrastructure.

The following Business Resource Guide was created to offer a snapshot of four specific areas and the role each plays in economic development decisions across the state.

In addition, a list has been compiled of several agencies that assist with economic development efforts on the state and local levels.

ECONOMIC DEVELOPMENT RESOURCES REGIONAL ECONOMIC DEVELOPMENT ALLIANCES

Upstate SC Alliance Phone: 864-283-2300 www.upstatescalliance.com

Central SC Alliance 1201 Main St., Suite 100 Columbia, SC 29201 Phone: 803-733-1131 Toll Free: 866-278-9098 Fax: 803-733-1125 www.centralsc.org

NESA – The North Eastern Strategic Alliance P.O. Box 100547 Florence, SC 29502 Phone: 843-661-4469 www.nesasc.org

Charleston Regional Development Alliance 5300 International Blvd., Suite 103A North Charleston, SC 29418 Phone: 843-767-9300 Fax 843-760-4535 www.crda.org

SouthernCarolina Alliance Southern Carolina Business Center 1750 Jackson St., Suite 100, Barnwell, SC 29812 Phone: 803-541-0023 Fax: 803-541-3322 www.southerncarolina.org

Charlotte Regional Partnership 550 S. Caldwell St., Suite 760 Charlotte, NC 28202 Phone: 800-554-4373 Fax: 704-347-8981 www.charlotteusa.com

STATEWIDE RESOURCES

Municipal Association of South Carolina 1411 Gervais St. Columbia, SC 29201 Phone: 803-799-9574 Economic Development Partnership Fax: 803-933-1299 www.masc.sc 471 University Parkway Aiken, SC 29802 Phone: 803-641-3300 www.edpsc.org

New Carolina: South Carolina’s Council on Competitiveness 1411 Gervais St., Suite 315 Columbia, SC 29201 Phone: 803-760-1400 Fax: 803-760-1401 www.newcarolina.org

S.C. Department of Commerce 1201 Main St., Suite 1600 Columbia, SC 29201-3200 Phone: 803-737-0400, Toll-free: 800-868-7232 www.sccommerce.com

Palmetto Institute 1411 Gervais St., Suite 450 Columbia, SC 29201 Phone: 803-806-8106 Fax: 803-806-8335 www.palmettoinstitute.org

S.C. Economic Developers’ Association 1122 Lady St., Suite 1115, Columbia, SC 29201 Phone: 803-929-0305 Fax: 803-252-0589 www.sceda.org

S.C. Association of Community Development Corporations P.O. Box 20577 Charleston, SC 29413 Phone: 843-579-9855 Fax: 843-579-0232 www.communitydevelopmentsc.org

S.C. Jobs – Economic Development Authority 1201 Main St., Suite 1600 Columbia, SC 29201 Phone: 803-737-0268 Fax: 803-737-0628 www.scjeda.com

S.C. Chamber of Commerce 1201 Main St., Suite 1700 Columbia, SC 29201 Phone: 803-799-4601 Fax: 803-779-6043 www.scchamber.net

S.C. Power Team 1201 Main St., Suite 1710 Columbia, SC 29201-3212 Phone: 803-254-9211 Fax: 803-771-0233 www.southcarolinapowerteam.com

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Business Resource Guide

COMMERCIAL/INDUSTRIAL SPACE Overview Commercial real estate markets remain relatively weak across South Carolina, with pockets of stability and improvement. Tenants have had the upper hand in many lease transactions in recent months, and that trend continues in some markets. Financing for property purchases remains hard to come by, experts say, and financing for new construction is all but dried up. But a fixed supply should lead to stronger markets in the coming months.

Columbia market trends Businesses seeking office space have plenty of options in the Columbia market, where office vacancy rates are 20.6% in the suburbs and 23.6% downtown, according to commercial real eestate firm Colliers Keenan.

TOP TEN

Two forces behind the particularly high vacancy rate downtown are SCANA Corp.’s move from its 420,000-square-foot space on Main Street to a new suburban campus, and a new office tower at Main and Gervais streets that has pulled some firms out of their former spaces. Office tenants could continue to find competitive lease rates this year, especially for Class “A” space.

Columbia’s industrial market has fared relatively well during the economic downturn.

Although the area’s vacancy rate (8.5%) is up compared with recent years, it remains the lowest among the state’s three major markets.

The area’s retail market is weaker, with vacancy at nearly 12% in the first part of 2010, according to Colliers Keenan. That’s up from about 9% at the beginning of 2009. National

Largest Certified Sites in S.C.

retailers exiting large spaces have driven the increase. The market should stabilize this year, Colliers Keenan forecasts, but vacancy is likely to remain above 10% into 2011. That means retailers seeking space will find landlords willing to negotiate on lease terms.

Charleston market trends The Charleston office market saw some improvement in early 2010 after months of declining or flat activity, according to commercial real estate firm Grubb & Ellis WRS. Vacancy fell to 17.4% from about 20% several months ago. The strengthening is tied to a lack of new construction, the firm said. Lease rates for Charleston-area office space, though down 20% to 30% from their peak a few years ago, are stabilizing, and tenants are signing lease

A certified site is an industrial tract for which a third party has verified size and boundaries, environmental and topographical characteristics, land use, utility availability and other key details, as a way to market the property as shovel-ready. The list below of the 10 largest certified sites and available acreage is from the S.C. Department of Commerce.

1

2

3

4

5

Black River Airport Park

Grist Mill Industrial Park

Interstate 95 Mega Site

Sage Mill East

Jafza Magna Park Santee

1,556 acres

1,445 acres

1,417 acres

1,380 acres

1,322 acres

Sumter County

Florence County

Sumter and Clarendon counties

Aiken County

Orangeburg County

26 SC BIZ | w w w. s c b i z m a g . c o m

Business Resource Guide deals for longer terms than in 2009.

The Boeing Co.’s new airplane assembly facility under construction in North Charleston and several major distribution projects in the area are fueling industrial leasing activity among smaller firms doing related work, according to Grubb & Ellis WRS. Charleston’s industrial vacancy rate was 13.8% at the end of the first quarter of 2010, nearly even with the 14.2% reported at the end of 2009. Asking rents also began to stabilize early this year, suggesting the market has seen a bottom.

Charleston-area retail properties had an average vacancy rate of 9.7% in the first quarter, up from 8.4% in the fourth quarter, Grubb & Ellis WRS reported. The firm expects vacancy to drop again later this year as two new grocery store-anchored shopping centers, now classified as vacant, come online.

Greenville market trends Greenville-area office market vacancy is about 17.2% downtown and 21.5% in the suburbs, according to Colliers Keenan. The downtown market gained additional square footage this spring with the new Main @ Broad sixstory development, which contains office and retail space and a hotel.

Industrial properties posted a vacancy rate of 11.1% in late spring, Colliers Keenan reported, down from the 2009 year-end rate of 11.9%. Rental rates have been volatile in recent months as landlords negotiate lower terms for shorter leases. Rates are likely to remain volatile into 2011, Colliers Keenan forecasts, though vacancy could stabilize this year.

Greenville’s retail market weakened further in early 2010, with the average vacancy rate climbing to about 13.2% from about 8.6% at the end of 2008. As in other markets, big-box closures have driven recent increases. Retailers could benefit from lower asking rents, which have fallen as tenants have renegotiated leases, according to Colliers Keenan. The firm expects the Greenville market to continue to suffer this year from retail bankruptcies and closures.

Highest- and lowest-priced available Class ‘A’ office space Columbia’s Highest 100 Knox Abbott Drive ............................ $22.00 1201 Main St. ........................................ $21.50 1320 Main St. ........................................ $20.00 1901 Main St. ........................................ $20.00 5 Lake Carolina Way ............................... $20.00

Columbia’s Lowest 4406 Forest Drive ................................... $17.00 101 Business Park Blvd. ........................ $17.00 7909 Parklane Road .............................. $17.00 250 Berryhill Road .................................. $15.75 1901 Assembly St. .................................. $15.50

Charleston’s Highest 40 Calhoun St., Suite 550 ....................... $34.00 200 Meeting St. ..................................... $32.00 177 Meeting St., Suite 410 ..................... $32.00 151 Meeting St., Suite 400 ..................... $30.00 100 Calhoun St. ..................................... $29.00 40 Calhoun St. ....................................... $29.00

Charleston’s Lowest 421 Wando Park Blvd., Suite 120 ............ $20.00 4969 Centre Pointe Drive, Suite 102 ....... $20.00 501 Wando Park Blvd. ............................ $20.00 474 Wando Park Blvd. ............................ $19.00 4130 Faber Place Drive........................... $18.00 3950 Faber Place Drive.......................... $18.00

Greenville’s Highest Main @ Broad Street ............................. $27.00 55 E. Camperdown Way ......................... $24.50 104 S. Main St. ...................................... $22.75 The Terrace at RiverPlace, Camperdown Way ................................... $22.50 128 Millport Circle .................................. $22.00

Greenville’s Lowest 400 Brookfield Parkway .......................... $16.50 201 Brookfield Parkway .......................... $16.50 1041 E. Butler Road ............................... $16.50 10 Academy St. ...................................... $15.00 12 Maple Tree Court ............................... $15.50

Sources: Columbia, Greenville from Ryan Hyler, Colliers Keenan Charleston from Jon Chalfie, Grubb & Ellis WRS

Business Incubators in South Carolina On one end of the spectrum, South Carolina lina usoffers huge, shovel-ready sites for indusng tries. On the other, the state has a growing rs array of small-scale business incubators that provide just enough office spacee — equipped with Internet, phones andd other necessities — to help fledgling or relocating companies get off the ground. Among the public and privatesector offerings are the USC Columbia Technology Incubator, the Charleston Digital Corridor’s Flagship incubator, thee Lowcountry Innovation Center in North Charleston andd SCRA’s Innovation Centers Centers, which are in the works or completed in each of the state’s three population centers.

6

7

8

9

10

S.C. Advanced Technology Park

West Annex Industrial Site

The Matrix Industrial Park

Hunter Industrial Park

Brogdon West Industrial Site

1,250 acres

1,103 acres

868 acres

815 acres

805 acres

Barnwell County

Orangeburg County

Greenville County

Laurens County

Clarendon County

Business Resource Guide

FINANCE SLOW RECOVERY

S

outh Carolina, like other states, is in the midst of what economists say will be a very slow recovery.

In his latest economic situation report, Clemson University economist Bruce Yandle noted that production is rising and retail sales are improving. But construction activity is still falling, along with most state revenues, and huge excess capacity remains in all sectors, he said.

“We have ghosts of the U.S. debt crisis still haunting us,” Yandle said. “The bad debt has been shuffled from the private to the public sector; but it is still there, and much of it is rotten.”

The seasonally adjusted value for residential construction increased earlier this year, and unemployment insurance claims dropped during the same period, according to the latest economic report from the Moore School of Business at the University of South Caroli-

28 SC BIZ | w w w. s c b i z m a g . c o m

“We have ghosts of the U.S. debt crisis still haunting us.

The bad debt has been shuffled from the private to the public sector; but it is still there, and much of it is rotten.”

Bruce Yandle economist, Clemson University

na. Additionally, the seasonally adjusted average for a manufacturing workweek increased 1.3% this spring, and inflation-adjusted earnings increased 1.7%.

While economic indicators show positive trends, recovery will occur “at a very slow

pace” as consumers remain cautious and unemployment remains high, the report said.

“For months, the South Carolina leading indicator has been pointing to a recovery. ...

Continuing improvement in the economic conditions is anticipated in the months ahead,” the Moore School reported. “However, the debt crisis in Europe may impact negatively the South Carolina economy.”

Europe’s woes are particularly concerning in South Carolina because the state’s economy relies on exports and the crisis has devalued the Euro, the report said. Yandle agreed, saying poor economic conditions in Europe will stifle U.S. exports to the region and lead to higher imports from Europe.

He said gross domestic product should end in the high 2% to low 3% range for 2010.

Yandle also expects employment to expand in all sectors but construction.

“The economic plane is off the ground,” he said, “but it is wise to keep seat belts fastened and trays locked in an upright position.”

Business Resource Guide Retail sales by county $15.1B

Small Business Administration-backed loans, by county, in 2009

Statewide $146.3 billion

$15 $14

$13.4B

TOP FIVE

$13 $12

BOTTOM

FIVE

$10.9B 9B

$11

$10.2B

in Billions of Dollars

$10 $9.1B

$9 $8 $7 $6 $5 $4 $3 $2 $1

$212.6M $53.4M $127.6M $175.6M $177.4M

$0

ille

nv

ree

ton

es

rl ha

G

C

n

d

gto

lan

h Ric

L

in ex

rry

Ho

ick

rm Co

Mc

a

lud

Sa

eld

efi

g Ed

ille

ev

b Ab

ale

nd

e All

Source: S.C. Department of Revenue for fiscal year 2007-2008, the most recent data available

TOP TEN

Highest effective property tax rates on industrial property* Net Tax

Effective Tax Rate

1

S Sta St State tate South Carolina

$1.86 million

3.730%

2

Michigan

$1.72 million

3.449%

3

Indiana

$1.47 million

2.941%

4

Mississippi

$1.29 million

2.582%

5

Arizona

$1.26 million

2.529%

6

Texas

$1.26 million

2.529%

7

Kansas

$1.12 million

2.243%

8

Missouri

$1.11 million

2.223%

9

Iowa

$1.07 million

2.139%

10

Tennessee

$1.03 million

2.067%

*Results are based on net taxes and rates in each state’s largest city for the 2007 tax year.

Net tax is based on property valued at $25 million.

Source: S.C. Chamber of Commerce, Minnesota Center for Public Finance Research

County

Loans

Gross dollar amount

Abbeville.................3 ..................$47,500 Aiken ....................14 .............$3,873,800 Allendale.................1 ................$799,000 Anderson ..............14 .............$2,862,500 Bamberg.................1 .............$1,200,000 Beaufort................22 .............$4,519,400 Berkeley ...............15 .............$5,157,500 Calhoun ..................3 .............$1,023,000 Charleston ............53 .............$9,533,600 Cherokee ................2 ................$380,800 Chester ...................1 ................$441,000 Chesterfield ............1 ................$225,000 Clarendon ...............1 ..................$35,000 Colleton ..................1 ..................$50,000 Darlington ...............1 ..................$10,000 Dorchester ..............9 .............$1,090,000 Edgefield ................1 ..................$15,000 Fairfield ..................2 ................$265,000 Florence .................8 .............$1,981,000 Greenville .............56 ...........$18,299,100 Greenwood .............4 .............$4,531,000 Hampton.................2 ........... $1,512,500 Horry ....................31 .............$6,071,300 Jasper ...................3 ................$850,000 Kershaw .................3 ................$252,100 Lancaster ...............2 ................$332,000 Laurens ..................1 ....................$5,000 Lee .........................1 ....................$5,000 Lexington..............25 .............$8,275,500 Marlboro .................1 ....................$5,000 Newberry ................2 ................$335,000 Oconee ...................4 ................$868,000 Orangeburg ............4 ................$238,000 Pickens...................3 ................$927,300 Richland ...............46 ...........$14,696,400 Spartanburg..........15 .............$2,970,000 Sumter ...................2 ................$253,200 Union ......................1 ..................$25,000 Williamsburg.......... 2 .............$1,044,300 York ......................22 .............$7,733,900 Statewide ..........383 .........$102,738,700 Source: U.S. Small Business Administration, S.C. District Office

w w w. s c b i z m a g . c o m | S u m m e r 2 0 1 0

29

Business Resource Guide

WORK FORCE B

oeing Co.’s entrance into South Carolina has sparked a renewed demand for highend manufacturing workers across the state that won’t be limited to just the burgeoning aerospace supply chain.

Much like BMW’s and Michelin North America’s entries into the Upstate and Midlands, Boeing’s landing here has put a corporate seal of approval on the Lowcountry, bumping the entire state up a notch on economic development and site-selection lists.

As more manufacturing and support companies enter South Carolina, demand for workers is expected to increase.

ReadySC is working with the aircraft maker like it has with many others across the state to ensure a steady flow of qualified, well-trained workers is ready to meet that demand.

Clemson University’s International Center for Automotive Research is growing the state’s next crop of engineers by using handson learning to facilitate more than automotive sector skills. Imtiaz Haque, executive director of the Carroll A. Campbell Jr. Graduate En-

30 SC BIZ | w w w. s c b i z m a g . c o m

Photo/Michelin North America

gineering Center, said students participating in the school’s new Deep Orange program learn about management of innovation that could apply to any development process that requires problem-solving and thinking skills.

Haque said CU-ICAR looks at research and development in a new kind of way to produce what future manufacturers will need to fuel the growing high-end manufacturing cluster, with a focus on automotive engineering. Each class of Deep Orange students creates an innovative platform and designs and builds a vehicle on a two-year cycle.

“You know there is no substitute for a hands-on education,” Haque said. “That’s what we’re trying to do with graduate students at CU-ICAR.” Green technology also has become a growing area for South Carolina’s work force. Federal dollars have flowed in at technical colleges across the state so they can develop curricula geared toward environmentally and businessfriendly technologies.

Orangeburg-Calhoun Technical College,

Trident Technical College in North Charleston, Central Piedmont Community College in Charlotte and Mountain Empire Community College in Virginia have been awarded a “Career Pathways for a Green South” grant to create a work force that understands green technology standards.

The wind turbine drivetrain test facility being designed at Clemson University’s Restoration Institute in North Charleston under a Department of Energy grant also is expected to create thousands of engineering, manufacturing and supporting jobs as it begins to stress-test gigantic wind turbine drivetrains.

South Carolina continues to struggle with one of the highest unemployment rates in the nation as the recovery slowly sprinkles new jobs across the community. The S.C. Department of Employment and Workforce reported an 11.6% unemployment rate for April 2010, compared to a national rate of 9.9% for the same month. Nearly 9,000 jobs were added in the hospitality industry as the summer tourist season began.

HOW DO YOU KNOW I’M WORK READY?

EEOC Compliant

I CAN PROVE IT. Introducing South Carolina’s Employee Credentialing Program powered by WorkKeys. WorkReady SC is a new employee credentialing program that tests- and scores- job skills. It gives jobseekers proof of their abilities and employers a way to identify employees with the most potential. WorkReady SC gives employees a hiring advantage: • Streamlines recruitment decisions • Reduces turnover • Reduces training costs • Saves time and money For more information about this new program sponsored by the South Carolina Department of Employment and Workforce, visit www.workreadysc.com South Carolina Department of Employment and Workforce • 1550 Gadsden Street, Columbia, SC 29220 • (803) 737-2671 • Relay Service dial 711 (TTY)

Business Resource Guide Expenditures per student Top 5 Expenditures School district per student Allendale.............................................. $12,283 Fairfield ............................................... $12,160 McCormick ......................................... $11,594 Marion 7 .............................................. $11,588 Spartanburg 7 ..................................... $11,424 Bottom 5 Expenditures School district per student Anderson 1 ............................................ $6,751 Spartanburg 2 ....................................... $6,797 Spartanburg 4 ....................................... $7,122 Dillon 3 .................................................. $7,182 Dorchester 2.......................................... $7,206

Number of students per district Top 5 District Enrollment Greenville .............................................. 67,651 Charleston ........................................... 41,642 Horry ..................................................... 35,822 Berkeley ................................................ 27,907 Aiken ..................................................... 24,753 Bottom 5 District Enrollment Marion 7 ..................................................... 806 Dillon 1 ....................................................... 830 Barnwell 19 ................................................ 854 McCormick ................................................. 911 Bamberg 2 ................................................. 915

10-year change in district enrollment Top 5 fastest-growing districts District % increase York 4 ........................................................ 95.4 Spartanburg 5............................................ 43.8 York 2 ........................................................ 43.4 Richland 2 ................................................. 43.2 Lexington 1................................................ 37.9 Bottom 5 District % decrease McCormick ................................................ 32.7 Marion 7 .................................................... 31.4 Allendale.................................................... 29.6 Barnwell 19 ............................................... 28.7 Clarendon 1 ............................................... 27.5

Percent of graduates entering post-secondary education after high school Top 5 % of graduates entering District post-secondary education Spartanburg 6 ........................................... 90.2 York 4........................................................ 89.4 Lexington 5 ............................................... 87.0 Anderson 5 ................................................ 86.7 Dorchester 4.............................................. 85.5

Bottom 5 % of graduates entering District post-secondary education Hampton 2................................................. 22.4 Orangeburg 3 ............................................ 29.7 Allendale.................................................... 31.0 Fairfield ..................................................... 34.8 Marion 7 .................................................... 36.2 Source: S.C. Department of Education, 2008

Poverty rate Top 5 % of students District living in poverty Marion 7 .................................................... 97.4 Clarendon 1 ............................................... 97.0 Allendale.................................................... 96.4 Lee ............................................................ 96.3 Williamsburg.............................................. 95.9 Bottom 5 % of students District living in poverty York 4........................................................ 23.7 Lexington 5 ............................................... 37.6 York 2........................................................ 40.7 Lexington 1 ............................................... 45.9 Anderson 1 ................................................ 52.0 Source: U.S. Census, 2009 estimate

Education level of S.C. population 8.2 %

Source: S.C. Department of Education

Advanced degree or more

23.5 %

Bachelorâ&#x20AC;&#x2122;s degree or more

82.1 %

High school graduate

32

SC BIZ | w w w. s c b i z m a g . c o m

Business Resource Guide

INFRASTRUCTURE

W

ith more than 41,459 miles of roads and bridges, South Carolina’s state-maintained highway system is the fourthlargest in the United States. The S.C. Department of Transportation maintains the roadways through its $1.05 billion budget and 4,985 employees.

Nationally, 19% of all highways are under state ownership. In South Carolina, 62% of all highways are owned by the state. Yet, S.C. taxpayers contribute less state revenue ($131) than the national per-capita average ($202).

The state also ranks last in the nation and region in terms of expenditures per road mile, according to a 2002 study by Clemson University’s Strom Thurmond Institute.

The DOT reports that its primary source of state revenue (more than 90%) is a motor fuel user fee of 16.8 cents per gallon. Across the Southeast, 51% of state highway funding is derived from sources other than fuel user fees.

The S.C. fee has not increased since 1987 and has never been adjusted for inflation.

In addition, motor fuel user fee revenues decreased by 4% between 2008 and 2009, and fiscal 2010 revenues reflect another 4% decrease, according to the DOT’s 2010 report.

A crew works on an on-ramp as part of the interchange improvement project on Interstate 26.

(Photo/Earl Capps)

The DOT did receive $275 million for Most traveled roadways in S.C. highways and bridges and $10 million for Begin End transit from through the American Recovery County Road Milepoint Milepoint and Reinvestment Act in fiscal 2009-2010.

211.54 212.51 However, this source of funding is not re- Charleston I-26 Charleston I-26 208.09 208.54 curring and can only be used on federal aideligible roads, which make up about half of Lexington I-26 106.46 107.14 the state’s roadways.

York I-77 90.2 91.05

The future The city of Charleston and the S.C. DOT have joined together to study the feasibility of a high-speed, intercity passenger rail line connecting cities from coastal Georgia to the North Carolina border.

The S.C. DOT and the city have applied for a $500,000 federal grant to study a passenger rail line in South Carolina’s eastern corridor that would tie into the existing federally designated Southeast High-Speed Rail Corridor.

“The revenues from state fuel taxes have proven to be insufficient to maintain our existing highway system,” Transportation Secretary H.B. “Buck” Limehouse Jr. said in a statement.

“We need to look into rail as a way to take the pressure off our highways and reduce

2008 AADT* 139,800 136,200 133,300 129,100

Charleston

I-26

211.14

211.54

127,900

Charleston

I-26

208.54

211.14

125,500

Lexington

I-26

104.35

106.46

113,800

Richland

I-26

107.14

107.96

112,500

Greenville

I-85

50.83

53.72

110,800

Lexington

I-26

103.42

104.35

101,600

*Annual average daily traffic Source: S.C. DOT

traffic congestion.”

In the Upstate, a high-speed rail corridor would pass through Greenville and Spartanburg. That project remains unfunded, however, despite North Carolina’s active participation in the program and the state’s intention to bring the high-speed trains to Charlotte.

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33

Business Resource Guide Largest road and bridge construction projects U.S. 17 ACE Basin Parkway An eight-mile stretch of U.S. 17 will be widened from Gardens Corner in Beaufort County to the four-lane roadway at Lightsey Plantation in Colleton County Segment 1, between Gardens Corner and the Combahee River, is expected to be completed this fall. Cost of the project: $80 million.

Segment 2A, between the Combahee River and the four-lane roadway at Lightsey Plantation, also is expected to be completed this fall. Cost of the project: $20.4 million.

eight lanes for three miles between I-526 and Ashley Phosphate Road.

Construction began in August 2008 and is expected to continue until 2011.

Interstate 20 widening The S.C. Department of Transportation plans to widen Interstate 20 from I-77 to just east of Spears Creek Church Road (Exit 82) in northeast Richland County. The project includes widening to six lanes and mainline corridor rehabilitation of 6.7 miles of I-20.

The project is scheduled to start this fall and is estimated to take 2 1/2 to 3 years to complete. Project cost: $80 million.

Ben Sawyer Bridge

Water sources for major metro areas GREENVILLE AREA Table Rock Reservoir, North Saluda Reservoir, Lake Keowee Population served: 350,000 Average usage: 55 million gallons per day COLUMBIA AREA Lake Murray, Broad River Diversion Canal Population served: 375,000 in Richland and Lexington counties Average usage: 60 million gallons per day CHARLESTON AREA Edisto River, Bushy Park Reservoir Population served: 400,000 Average usage: 50 million gallons per day Sources: Greenville Water System, city of Columbia, Charleston Water System

Rehabilitation of this bridge in Charleston County included new steel superstructure approach spans and a swing span, as well as new electrical and mechanical systems. The new superstructure is similar to the previous bridge in design and height with slightly wider traffic lanes and a 5 1/2-foot sidewalk.

After a little more than one year of construction, the bridge is now open. Project cost: $32.5 million.

Interstate 26 Remount and Aviation interchange improvement This three-year $66 million project addresses one of the busiest traffic areas in Charleston County. It includes the reconstruction of two interchanges to improve traffic flow to and from Interstate 26. It will also widen I-26 to

Interstate 385 rehabilitation This project extends from the Interstate 385/I-26 interchange north along I-385 for 15 miles, to S.C. Route 92. It will consist of removal of some of the existing asphalt pavement and replacement with approximately10 inches of concrete.

The interstate will also be widened toward the median to add shoulders where needed.

Improvements will raise the finished grade of the interstate and require the Transportation Department to raise six overpass bridges by approximately 2 feet to provide a minimum clearance of 16 feet. The flyover bridge that connects I-26 westbound to I-385 northbound will also be replaced.

The project is expected to be complete in August. Project cost: $300 million.

10 largest power plants (Ranked by generation capacity) Plant

Primary Energy Operating Company Source/Technology

Net Summer Capacity (MW)

1. Oconee

Nuclear

Duke Energy Carolinas LLC

2,538

2. Cross

Coal

S.C. Public Service Authority

2,320

Electricity price comparison (industrial)

3. Catawba

Nuclear

Duke Energy Carolinas LLC

2,258

4. Bad Creek

Pumped storage

Duke Energy Carolinas LLC

1,360

5. Winyah

Coal

S.C. Public Service Authority

1,155

State

Cost per kilowatt-hour

6. V.C. Summer

Nuclear

S.C. Electric & Gas Co.

966

Georgia

6.67 cents

7. John S. Rainey

Gas

S.C. Public Service Authority

958

North Carolina

5.54 cents

8. H.B. Robinson

Nuclear

Progress Energy Carolinas Inc.

899

Gas

Calpine Operating Services Co. Inc.

854

South Carolina 5.37 cents

9. Broad River Energy Center

Tennessee

10. Jasper

Gas

S.C. Electric & Gas Co.

852

6.29 cents

Source: S.C. Power Team, 2008 data

34

SC BIZ | w w w. s c b i z m a g . c o m

MW = Megawatt Source: U.S. Energy Information Administration, Form EIA-860, Annual Electric Generator Report, â&#x20AC;&#x2122;08

10 20 2, E SU IS

S.C. Delivers

PORTS, LOGISTICS & DISTRIBUTION IN S.C.

Flight plan

$1 billion impact

Hot oil

Southwest to serve South Carolina in 2011

Study S t reveals impact of aviation

S.C. company converts

center on Upstate

cooking oil into biodiesel

Page 44

Page 46

Page 41

A P U B L I C AT I O N O F S C B I Z N E W S

BRIEFS Logistics ccompany expected to add 500 jobs MONCKS CORNER – A Los Angeles-based distribution and logistics company is set to deliver hundreds of jobs to the Lowcountry.

Moulton Logistics Management plans to open a new distribution center in Berkeley County, according to a joint statement from the S.C. Department of Commerce, Berkeley County and the S.C. State Ports Authority.

The $25 million investment, which will be located in the former Masisa USA building on Clements Ferry Road, is expected to generate 500 new jobs in the next five years.

The company expects the new facility also will reduce its freight

10 locomotives with parts that reduce harmful diesel emissions.

Officials from the S.C. Department of Health and Environmental Control recently thanked S.C. Public Railways for making the switch and announced a $105,000 grant that pays for half of the cost.

“Reducing diesel emissions is one of the biggest public health challenges that we face today,” said Myra Reece, chief of DHEC’s Bureau of Air Quality.

Reece said the U.S. Environmental Protection Agency requires that new diesel engines meet lower emissions standards. But about 20 million older diesel engines are in use now across the country, and because diesel engines have long lives, it could take 30 years before all of With the help of a state grant, them are replaced.

S.C. Public Railways has replaced To encourage entities to volengine components in two of its untarily upgrade their diesel encosts and transit times by providing the company better access to its East Coast and overseas customers, the statement said.

Moulton plans to begin hiring by the end of the year.

The company takes and fills direct-response shipping orders, such as those placed when consumers buy items presented on infomercials or the Internet.

Moulton is also heavily involved in retail distribution for several high-profile retailers, including Wal-Mart.

S Railways S.C. u upgrades diesel to reduce emissions

Adidas opens Upstate distribution centers A SPARTANBURG – Adidas Group officially opened two distribution centers in late May, placing nearly 2 million square feet of warehouse just off Interstate 85.

“With this state-of-the-art facility and our over-1,200-member team, we’ve established a foundation for the company’s sustained success in the U.S.,” said Glenn Bennett, head of global operations for Adidas.

In 2007 Adidas announced plans to relocate and expand its Spartanburg-based operations.

The first building, 1,096,700 square feet, opened in October 2008. The second facility, with 803,563 square feet, opened in October 2009. A third building on campus serves as a call center.

Each of the distribution cen-

36 | S.C. DELIVERS

Glenn Bennett, head of global operations for Adidas Group.

ters has an expansion capacity of 25%.

This is Adidas’ largest distribution facility, and it serves North America. Eighty percent of all products can be delivered in the United States in three days or fewer. The distribution centers hold more than 700,000 products, including items from Reebok, a brand Adidas acquired in 2006.

The capital investment for this project was $150 million. The facilities house more than 15 million units of apparel, footwear, equipment and accessories.

gines, DHEC provides matching funds through a special grant program.

The replacement of parts in two of S.C. Public Railways’ locomotives will cut the particulate matter from those engines by 31% and reduce nitrogen oxides by about 52%, Reece said.

The move improves the fuel efficiency of the engines, reducing fuel use from 12 gallons per hour to seven.

S.C. Public Railways, a division of the S.C. Department of Commerce, operates three common carrier railroads, two of which provide for switching services that allow CSX and Norfolk Southern access to Port of Charleston terminals.

The agency also operates a short line railroad in Berkeley County that serves BP Chemical and Nucor Steel.

Industrial marine park planned for Conway CONWAY – Two utilities and two government agencies are collaborating to create an industrial marine park near the Bucksport Marina outside of Conway.

The Grand Strand Water and Sewer Authority announced this spring that it will contribute the land for the park, Santee Cooper will provide the engineering and permitting expertise, and Horry County will help with the infrastructure necessary to make the park viable for industry. Myrtle Beach Regional Economic Development Corp. is also contributing to the effort.

“Santee Cooper is pleased to join forces with our local partners and build a marine park that will create opportunities for jobs and capital investment by the businesses that will ultimately locate here,” said Michael Brown, economic development manager for Santee Cooper.

Officials are hoping to attract boat builders, marine repair busi-

nesses, boat refurbishment companies and other marine service organizations as tenants.

“The waterway is a tremendous asset, and this unique tract of land adjacent to it provides unlimited possibilities for industry,” Jim Papadea, property manager for Horry County, added. “Manufacturers of heavy-lift components for wind or steam turbines, modular hospital units and the like, which are too large to transport by truck or rail, will find this location desirable.”

As for a timeline, officials have said the park is a work-in-progress and it will “take some time before the park is tenant-ready.”

“In the meantime, we’ll improve the existing facilities at Bucksport Marina, which will remain a fully functioning marina for residents and transient boaters to enjoy even after the marine park is operational,” said Fred Richardson, CEO of the water and sewer authority.

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BRIEFS N. Charleston ssupply chain company honored NORTH CHARLESTON – Cambar Solutions has been named to the 2010 Supply & Demand Chain Executive 100.

The award, given by Supply and Demand Executive magazine, honors top supply chain and warehouse software management vendors.

Cambar Solutions, based in North Charleston, was recognized for its warehouse management system, which includes radio frequency technology and handheld bar code readers.

The company’s products, which include hardware and software solutions, enable distributors to control and monitor the movement and storage of materials within the warehouse and process all transactions associated with receiving, put-away, replenishment, picking, shipping

and cycle counting.

The business technology publication announced this year’s top 100 on its website recently. Winners will also be featured in the magazine’s June/July issue.

S approves SPA Port Royal sale CHARLESTON – The S.C. State Ports Authority board passed a resolution in May approving a contract for the sale of its Port Royal facilities for $16.75 million.

The move, approved at the board’s monthly meeting, authorizes management to sign the contract upon approval by the state Budget and Control Board, which is set to meet in June.

According to the contract, the purchase would be made in two payments of $8.375 million, the first to be delivered after a period of due diligence and the second no more than three years

later. SPA officials have declined to name the buyer until after the transaction is complete.

Upon final approval of the contract, the buyer would incur a $250,000 penalty if it does not complete the purchase.

The $16.75 million offer is higher than the property’s appraised value, according to SPA officials. The proposed deal, however, falls almost $10 million short of a previous offer for the property and is more than $3 million less than the most recent asking price.

A Activewear ccompany inaugurates distribution center CHARLESTON – A Montrealbased activewear company officially inaugurated its new distribution center on the Cainhoy peninsula in May.

Port volume up again

38 | S.C. DELIVERS

Officials from Gildan Activewear Inc., which makes a variety of t-shirts, socks and underwear for the wholesale and retail markets, were on hand for the ribbon-cutting on Clements Ferry Road.

Gildan President and CEO Glenn J. Chamandy said the company, which employs 25,000 workers worldwide, planned to locate 250 jobs at the site and would make Charleston its retail headquarters. Today, retail sales make up for 30% of the company’s $1.3 billion in sales, he said.

The company also is moving its customer service and marketing divisions to the Charleston distribution center, which is located in Berkeley County.

The company also owns a manufacturing plant in Clarkton, N.C. The site of the distribution facility, which is 850,000 square feet, offers enough land for it to double in size as the company grows.

Port volume was up in April for the fourth straight month, showing a 28.5% year-over-year increase. Volume for the month also was up 3.8% over March.

Comparisons to last year are somewhat skewed because of the shipping industry’s historically bad year in 2009, State Ports Authority officials said. They pointed to the month-over-month increases as more concrete signs of port regeneration.

“It’s safe to say that we’ve got a little bit of a trend working here,” said Paul McClintock, the SPA’s chief commercial officer.

The SPA is expecting more good news concerning volume, as a recently signed deal with shipping line CSAV could mean as many as 1,000 containers per week, according to officials.

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BRIEFS Spartanburg airport renovation under way SPARTANBURG – South Carolina’s oldest commercial airport is finally getting a makeover. Spartanburg officials broke ground this spring on a $4.5 million project at Spartanburg Downtown Memorial Airport that will include a new terminal and 20 T-hangars.

“This is how corporate America meets Spartanburg,” said Airport Director Darwin Simpson.

“They don’t travel by bus, train or automobile.”

The first flight at the airport took place on Oct. 23, 1927.

The likes of Charles Lindbergh and Amelia Earhart have passed through Spartanburg’s airport.

South Carolina’s first aerial wedding occurred above Spartanburg in 1932.

“The terminal is very old and dilapidated,” Simpson said.

40 | S.C. DELIVERS

“We’re moving in the right direction to attract new business and have an additional impact.”

According to Mayor Junie White, the airport has a $10 million annual impact on Spartanburg County. About 69,000 flights leave the airport, mostly for business purposes.

“Spartanburg Downtown Memorial Airport is a major gateway to Spartanburg,” he said. “The renovation to the terminal and the new hangars will attract economic development to the community.”

The new terminal will open in spring 2011. The airport will next seek to repave the parking lots and runways and lengthen the runway by 500 feet. That project will require the purchase of additional land and will likely occur in two to three years.

BMW exports millionth auto made in S.C. CHARLESTON – Since announcing its arrival in South Carolina in 1992, BMW Manufacturing Co. has manufactured and exported more than 1 million vehicles.

And 85% of those cars have gone through the Port of Charleston.

Currently, more than 70% of the vehicles produced in the Upstate are exported to more than 120 markets worldwide. In 2009, BMW commemorated its 15-year anniversary and the production of 1.5 million vehicles.

Through 2009, BMW has invested more than $4 billion

in South Carolina and employs about 5,000 people at the plant.

According to a 2008 economic impact study by the University of South Carolina’s Moore School of Business, the factory supports 23,050 jobs and generates $1.2 billion in wages and salaries annually within the state.

The plant began production of BMW’s first full-hybrid vehicle, the BMW ActiveHybrid X6, in October 2009 and its $750 million expansion to build the next generation BMW X3 is nearly complete.

AEROSPACE

Flight plan Discount carrier Southwest to serve Greenville and Charleston starting in 2011

By Ashley Fletcher Frampton, Staff Writer

D

iscount carrier Southwest Airlines, the largest domestic airline by passenger volume, announced in May that it will serve the Charleston and Greenville-Spartanburg airports starting in 2011.

Southwest has yet to announce start dates, destinations and fares. But the company’s decision is being celebrated among local business, tourism and government leaders for its inevitable downward pull on airfares in Charleston and Greenville.

“Both these markets are attractive business and leisure destinations for existing customers and entry points for new customers.”

Ashley Dillon spokeswoman for Southwest

Fares have increased in Charleston since low-cost carrier AirTran Airways left the market in December. Since then, airport

officials and community leaders have been working to recruit a new low-cost carrier to replace AirTran.

High fares hurt Charleston’s efforts to recruit businesses and attract tourists, meetings and conventions, local officials have said. High costs of air travel also hurt businesses and residents based here.

No incentives needed Southwest announced its intent to start service in Charleston and Greenville-Spartanburg just as state lawmakers were working toward a compromise on controversial legislation that would of-

S.C. DELIVERS | 41

AEROSPACE

fer incentives to new air carriers.

At the same time, Charleston County Council was in the midst of approving an incentive plan for the same purpose, funded through a 5% tax on car rentals.

But the Dallas-based airline emphasized in its May 11 announcement that it intended to serve the two cities without subsidies.

The news came as a surprise to many because of the push to get incentive measures passed.

Helen Hill, executive director of the Charleston Area Convention and Visitors Bureau, recently told Charleston County Council that communities must offer money to help lowcost airlines with startup costs.

She said an unidentified airline had guaranteed it would serve Charleston with an incentive plan in place.

“This is the new reality of recruiting air service,” she said.

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In the Statehouse, proposed air service incentives had pitted Upstate and Lowcountry lawmakers against their colleagues from the Midlands.

Based on reports that Southwest wasn’t interested in serving the Columbia Metropolitan Airport, lawmakers in the Midlands said attracting the airline to competitor markets would put Columbia at a disadvantage.

Sen. Larry Martin, R-Pickens, had said that Southwest officials assured lawmakers that their in-

terest in serving S.C. markets was tied to the state incentive bill, which would have made as much as $15 million available for air carriers.

“The clear understanding I came away with was that if we could pass the bill, it certainly would go a long way toward cementing their interest in coming here,” Martin said in late April.

Charleston airport officials and some county leaders said they didn’t know why Southwest had cast aside the incentives.

Southwest’s decision A Southwest spokeswoman did not speak specifically to that.

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So South Carolina for some time,” sai said Ashley Dillon, a spokeswoman for Southwest. “Both these ma markets are attractive business an and leisure destinations for existing customers and entry points for new customers.”

She said Southwest is “contin tinuing along a path of adding ma markets with a slightly smaller foo footprint to attract new customers ers,” and in doing so, it has rema mained profitable.

“We just decided it was time to serve South Carolina,” she said, no noting that officials in the state hav have been asking for service for aw while.

Now, county and state incentiv tive plans appear to be dead.

County Council Chairman Teddie Pryor said the proposed local incentive fund was not targeted only at Southwest Airlines.

But before moving forward, he wants to evaluate local air service after the discount carrier begins operating.

“Southwest does not have a history of going into destinations and pulling out.”

David Jennings chairman, Charleston County Aviation Authority

“If we need to bring this back, we can bring it back,” Pryor said.

But, he added, if Southwest can be profitable without incentives, perhaps other airlines can, too.

The state measure is also probably dead, Rep. Dan Cooper, RPiedmont, said after Southwest’s announcement.

“I don’t guess we need it anymore, since they are coming without it,” said Cooper, who is chairman of the House Ways and Means Committee and had supported the incentives bill.

Southwest could still get help with startup costs from the two airports.

David Jennings, chairman of the Charleston County Aviation

Authority, said Southwest could take advantage of up to $150,000 the authority makes available to any new airline.

Greenville-Spartanburg International Airport is offering startup assistance valued at $7 million over two years, according to airport Executive Director Dave Edwards.

Southwest’s style Southwest differs from AirTran in that it does not operate on a hub-and-spoke model; its flight offerings are point-to-point.

AirTran said its reason for leaving Charleston was a lack of business travelers. But some in the business community had

complained that the airline offered only two daily flights, both to its hub in Atlanta, and that flight times were inconvenient for business travel.

Dillon said she didn’t have a time frame for when flight details for Charleston would be announced. In any new city, she said, Southwest usually starts with modest offerings.

Southwest said its average one-way airfare was $114.61 as of Dec. 31.

Jennings said a group working to attract low-cost carriers to replace AirTran identified Southwest early on as its top choice. The airline is the largest in the country, based on domestic passengers carried; it is profitable; and its people are easy to work with, he said.

“Southwest does not have a history of going into destinations and pulling out,” he said.

Mike Fitts, James Hammond and Scott Miller contributed to this report.

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S.C. DELIVERS | 43

AEROSPACE

Aviation center has $1B impact

By James T. Hammond, Staff Writer

T

he former Donaldson Air Force Base in Greenville soon will host regular military flight operations for the first time in a half-century.

A new helicopter base for the S.C. Army National Guard will meld with a vibrant, diverse industrial and aviation center that was purchased by Greenville city and county governments in 1963 for $421,650.

That deal, through which local leaders arranged for the federal government to take over the 2,300-acre closed air base, has turned out for the region a little like the Louisiana Purchase did for the United States.

An economic impact study involving 11 of the 30 companies at what is now the S.C. Technology and Aviation Center showed $634.4 million annually in direct

economic output, supporting 1,377 jobs and an annual payroll of $81.2 million. In the past year, those companies invested $388 million in capital improvements.

When the ripple effect is counted, SCTAC and the companies that have located there generated an additional $381 million in economic activity and 2,358 more jobs, the survey showed.

The $1 billion direct and indirect annual impact on Greenville County makes the aviationcentered industrial park one of the Upstate’s most important job machines. With two fixed-base operators, the airport represents a diverse asset to the Upstate, the flying public and the military.

SCTAC already hosts the second-largest federal contractor in the state, with Lockheed Martin drawing in $956 million

last year to refit and upgrade combat, cargo and surveillance aircraft for the military, according to the government website USASpending.gov.

Within the next three months, the S.C. Army National Guard will seek contracts to build a $44 million, 102,000-square-foot hangar for a new Army aviation support facility beside the 8,000-foot runway at the former Donaldson Air Force Base. Add to that $99 million to equip the base and $3 million in annual spending for operations, and the new military facility will further strengthen SCTAC’s role in the military’s maintenance, refitting and operations services in the Upstate.

Overall, defense and other federal contracts brought $1.36 billion in spending into the

Fourth Congressional District (Greenville, Spartanburg and Union counties) in fiscal year 2009. And tenants at SCTAC, including Lockheed Martin and Stevens Aviation, constituted a major portion of those expenditures.

The Army National Guard will base 14 of its helicopters, about 70 full-time personnel and an additional 145 part-time National Guard soldiers at the new 30-acre aviation center.

Col. Pete Brooks, spokesman for the S.C. Army National Guard, said the aviation center will give the National Guard an alternative location for its aircraft in the event of hurricanes.

The current base of operations is just outside Columbia, and “we sometimes get 100 mph winds in Columbia,” Brooks said.

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In 2000, about 120 helicopters from various locations were evacuated to SCTAC to get them out of the path of an approaching tropical storm.

SCTAC already has a U.S. Army Reserve Center and a U.S. Naval and Marine Reserve Center that will be neighbors to the new aviation center.

But the Army aviation center is just the latest installment for an economic engine of growth that has risen from the former Air Force base that Greenville city and county purchased for $421,650 in 1963.

“Just the property alone today is worth hundreds of millions of dollars,” said Peter Cevallos, the airport operations director. SCTAC has sold and will continue to sell industrial sites to private companies such as 3M and Michelin. But the 1,400-acre core of the airport is maintained intact under the ownership of SCTAC. Cevallos said SCTAC maintains the 8,000-foot runway and

control tower as a federally certified public airport that is host to two fixed-base operators for small aircraft, access to the Lockheed Martin facility for large military aircraft, and an auxiliary landing field for military aircraft.

SCTAC has about 45,000 flight operations (landings or takeoffs) a year, compared with about 65,000 per year at the Greenville-Spartanburg airport.

About 1,700 jobs at SCTAC are directly related to airport opera-

tions, according to an economic impact report by Jackson Marketing Group.

A second, 5,000-foot runway built by the Air Force has not been used for flight operations for many years. Jody Bryson, president and CEO of SCTAC, said the center’s governing board has cleared the way to study a proposal to turn that unused runway into several hundred acres of additional industrial sites. The single, 8,000-foot active runway

is more than adequate to meet the center’s landing and takeoff requirements.

SCTAC officials want to get out the message that “there’s a lot going on here, despite the perception among some people that it’s just an old military base,” Cevallos said.

At least one company on the industrial park, Cytec Industries Inc., is part of the supply chain for the new Boeing 787 Dreamliner.

Cytec makes the carbon fiber at SCTAC that is used to build the first large airliner body made of advanced composite materials instead of metal.

SCTAC faces many challenges in preserving its core function as “a public airport with an industrial flavor,” Cevallos said, not the least of which is the trickle of federal funds to maintain and upgrade its runway, taxiways and other vital airport facilities.

“Our challenge is to illustrate how viable and diverse an economy we have here,” he said.

•

S.C. DELIVERS | 45

FEATURE

Cooking up biodiesel in the Midlands

By Mike Fitts, Staff Writer

I

t’s a fuel processing facility right in downtown Winnsboro, but the neighbors don’t hear or smell it.

It doesn’t add smoke to the skies like an oil refinery or give off the scent of a fast food restaurant, according to the company president.

“No one even knows we’re there,” said Joe Renwick, president of Midlands Biofuels.

Midlands, built in a converted tire shop, is South Carolina’s only certified biodiesel fuel production facility. “Bio-Joe” Renwick’s startup company is going around the state collecting used cooking oils. He’s converting them into a new version of diesel fuel, one that can be blended to improve the performance of traditional diesel or used pure to power a modified vehicle.

The business has grown so

“The doors are open, we’ve got oil coming in one end and biodiesel going out the other.”

Joe Renwick president, Midlands Biofuels

quickly, Renwick said, that his current problem is that the company is not harvesting enough used cooking oil. The company has set up hundreds of collection barrels, at restaurants from Charleston to Laurens, and is using partnerships with school districts to find more oil.

The company collects the cooking oil about every month and brings it to Winnsboro to process.

In the processing, one type of alcohol, glycerol, is removed and another one, methanol, is added.

Methanol often gets used as fuel in race cars, and it runs cleanly and powerfully.

That gives biodiesel a huge advantage on emissions, Renwick said: The fuel burns 80% more cleanly than traditional diesel.

Even adding biodiesel to traditional diesel has major benefits, he said. For example, the diesel fuel currently at the pumps is a cleaner-burning formula, a result of tighter emissions regulations enacted in 2006. But it doesn’t burn as smoothly in engines, Renwick said, because the sulfur

that was reduced aided in that process.

Adding in just 2% biodiesel brings smoothness and lubrication to diesel engines. That’s why the Blythewood Oil Co. buys about 50% of Midlands Biofuels’ production, Renwick said.

“Biodiesel provides extremely good lubrication,” he said.

And the extracted glycerol doesn’t go to waste, either, Renwick said: It is being burned as a boiler fuel.

Renwick didn’t set out from The Citadel to get into the biodiesel business. A friend of his from college showed him the process, and he was intrigued.

The idea had added appeal because diesel fuel was knocking on $5 per gallon at the time, he said. Almost before he knew it, and with the help of friends and

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family, he found himself back in his hometown setting up a biodiesel processing plant.

He also got help from eight interns from the University of South Carolina. Last summer, the group worked with Renwick and his friends to turn a pile of equipment into a functioning plant.

The biodiesel project has gotten a lot of helping hands along the way, he said. Other biodiesel companies around the area have helped out, as has the S.C. Department of Agriculture, which did testing that helped get the fuel certified for use in cars and trucks. Only three plants in the Southeast are so certified.

Several other organizations, including USC’s incubator program and SC Launch, a program of the S.C. Research Authority, helped get the company up and running.

What hasn’t been helping is the price of diesel fuel. It’s dropped by half since Renwick’s venture was launched, though it is creeping back up again, Ren-

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wick said.

“It’s been an emotional roller coaster ride,” he said.

The government also has not been doing much to help. A federal tax credit of $1 per gallon for

biodiesel lapsed in January.

As it stands, the cost of biodiesel is about the same as it is for conventional fuel, or a little less expensive, thanks to donations of vegetable oil. Restaurants often pay someone to haul it off, so they have been glad to give it to Midlands Biofuels for free, Renwick said.

If a biodiesel company has to buy the vegetable oil it works with, the numbers can quickly become cost-prohibitive.

So far, Midlands Biofuels is not generating much profit, Renwick said. But it’s chugging along, thanks both to the help it has received and to a particular segment of people who believe in the use of biodiesel as a clean alternative to fossil fuels.

But in a business that has proved tough for some, Renwick said he is just glad to be up and running.

“The doors are open, we’ve got oil coming in one end and biodiesel going out the other,” he said.

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Big Daddy Drayage - Charleston

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A brown pelican perched above the Folly River. The birds, which measure up to 54 inches long and have a wingspan between 6 1/2 feet and 7 1/2 feet, are the smallest members of the pelican species worldwide.

(Photo/Ryan Wilcox)