What S.C. officials don't 'really, really' want you to know about incentives

What S.C. officials don't 'really, really' want you to know about incentives


Update: 12/13/23 - Several hours after this story was published, Envision AESC announced in a state Department of Commerce press release that it would create an additional 450 jobs at its electric vehicle battery plant under construction in Florence County, bringing the total promised new jobs to 1,620, and double its originally announced $810 million investment to $1.62 billion. But as the story below points out, based on records presented at last week's state Joint Bond Review Committee meeting, Envision could receive $120 million in state taxpayer-funded bond proceeds if it creates 800 jobs and invests $800 million - less than what the company originally announced. The latest Commerce press release said the State Fiscal Accountability Authority at its meeting yesterday approved the bond issuance.


“Tell me what you want, what you really, really want.”

It’s not entirely clear if Gov. Henry McMaster, 76, is a devoted fan of the 1990s British pop group, Spice Girls, but he gave a short, modified version of their 1996 hit song, “Wannabe,” at a recent meeting of the Greater Cayce-West Columbia Chamber of Commerce, according to a story published by the South Carolina Daily Gazette.

The Republican McMaster used the song’s lyrics to describe the state’s position on providing taxpayer-funded training to companies seeking to locate or expand in South Carolina – which is commonly part of large incentives deals and can total in the millions of dollars, as The Nerve has pointed out over the years.

“Tell us what you want, what you really, really want; and we’ll train them, and we’ll send them to you,” McMaster said at the Chamber of Commerce event, which drew laughter from the business audience, the Daily Gazette reported.

But as The Nerve revealed in an October story on the $1-billion-plus, taxpayer-funded deal to bring a Scout Motors electric-vehicle assembly plant to Richland County, what large companies “really, really want” from state and local  government officials typically is revealed in secret incentives “wish lists,” formally known as “requests for proposals” (RFPs) or “requests for information” (RFIs).

Scout Motors, which German-based Volkswagen launched last year as an independent company, pretty much got what it wanted, The Nerve found in comparing state and local incentives agreements to the company’s RFP, which was included with nearly 1,000 emails provided by the town of Blythewood under the S.C. Freedom of Information Act (FOIA).

The Nerve’s October story revealed that state and local government officials kept Scout Motors’ RFP and other details secret for months before the project was publicly announced on March 3 this year. Less than two weeks later, the S.C. Legislature quickly passed – without advance public hearings – an amended resolution authorizing nearly $1.3 billion in state surplus funds to help the company, which works out to be about $240 for every man, woman and child in the state.

Scout Motors says it plans to invest $2 billion and create 4,000 jobs with the project, though as The Nerve revealed in June, a state incentives agreement provides relatively easy paths for the company to meet is job creation and investment requirements.

The Nerve last month asked the S.C. Department of Commerce under the FOIA for any RFPs or RFIs submitted by companies for other announced, electric-vehicle-related projects statewide. McMaster in October 2022 – about two weeks before the first recorded meeting between state officials and Scout Motors representatives – issued an executive order committing the state to promote the electric vehicle industry.

Less than 15 minutes after The Nerve’s FOIA request was submitted via email, Commerce’s chief lawyer, Karen Manning, denied the request, contending in her response that RFPs or RFIs were exempt under a provision of the FOIA dealing with “memoranda, correspondence, documents, and working papers relative to efforts or activities of a public body and of a person or entity employed by or authorized to act for or on behalf of a public body to attract business or industry to invest within South Carolina.”

The Nerve in its response said while the FOIA allows public agencies to withhold those records, it doesn’t require them to do so. The Nerve also pointed out that Scout Motors’ RFP was released by the town of Blythewood under the FOIA, though Manning wasn’t swayed by that argument, noting, “A previous disclosure by the Town of Blythewood of information that is exempt under state law does not create an obligation by any other public body to disclose exempt public records.”

Contacted last week by The Nerve, Greg LeRoy, executive director of Washington, D.C.-based Good Jobs First, which he founded in 1998 and which, according to its website, has “fought for reforms to increase transparency around the use of public money used in the name of economic development,” said the public should have access to RFPs or RFIs submitted by companies for taxpayer-funded incentives.

“Our experience is that such documents are almost always fair game after a deal is awarded,” he said in his written response.

Asked how often companies submit RFPs or RFIs for state or local incentives, LeRoy replied: “It is, sadly, all too common for companies to create an incentives wish list. Indeed, that is part of the role the site consultant plays: knowing each state’s menu of incentives and making sure the company doesn’t ‘leave money on the table.’”

S.C. Commerce and Richland County officials told The Nerve for its October story that companies commonly submit incentives wish lists. Scout Motors’ RFP was provided through Chicago-based JLL Inc., a global real-estate services firm.

The Nerve reported then that S.C. officials believed that Mississippi was the other finalist state for the Scout Motors plant. The Nerve recently submitted an open-records request to the Mississippi Department of Agriculture & Commerce for any RFPs or RFIs submitted by Scout Motors but was informed by agency lawyer Rebecca Wilson that it had “no records responsive to your request.” Another related open-records request is pending with the Mississippi Development Authority.

Earlier this month, the South Carolina Policy Council – The Nerve’s parent organization – published detailed recommendations to “facilitate transparency and public input in the incentives process, as well as bring accountability to projects once approved,” contending that if S.C. officials “insist on providing incentives,” taxpayers “cannot be left in the dark.”

New $50M taxpayer gift

Meanwhile, incentives secrecy continues to be the norm in the Palmetto State. Last week, for example, a 10-member legislative panel, known as the Joint Bond Review Committee (JBRC) and chaired by Sen. Harvey Peeler, R-Cherokee, who also is the Senate Finance Committee chairman, recommended approval of an additional $50 million in taxpayer-funded bonds for the Envision Automotive Energy Supply Corporation (AESC) to locate an electric vehicle battery plant in Florence County.

Envision, which along with McMaster announced the project on Dec. 6, 2022, was among the group of electric-vehicle-related projects covered in The Nerve's denied FOIA request last month for any RFPs or RFIs.

In documents provided for the JBRC meeting, Commerce wasn’t completely transparent about which company was seeking more taxpayer help. In an included Nov. 3 letter to JBRC and the State Fiscal Accountability Authority (SFAA) officials, Manning said the requested additional $50 million in taxpayer-funded bonds was “in connection with a significant confidential economic development project that consists of an investment in the State of South Carolina by manufacturers of electric vehicle batteries.”

The letter didn’t identify the company, though Commerce in another meeting document listed it as “AESC Japan Ltd and affiliates.” A state incentives agreement provided by Commerce to The Nerve in October under the FOIA listed the company as “Envision AESC US LLC,” previously identified as “Project Gemini.” The Japan-based battery business, which was launched in 2007 as a joint venture involving Nissan, NEC Corp. and a subsidiary of NEC, was sold to China's Envision Group in 2018, according to a Reuters story last year.

The latest requested $50 million in bonds for Envision is on top of more than $70 million in taxpayer-funded bonds approved for the company last year by the JBRC and five-member SFAA, which includes McMaster, who chairs that panel. Records provided for last week’s JBRC meeting show that with projected interest, the collective $121 million in bonds would cost S.C. taxpayers a total of $180.5 million over 20 years – more than the total annual budgets of dozens of state agencies.

Among other awarded incentives, the Envision project was approved last year for a $135 million state “closing fund” grant and 40 years of reduced property taxes through a county fee-in-lieu-of-taxes (FILOT) agreement.

In a Commerce press release last December, Envision said it would create 1,170 jobs and invest $810 million to “support the company’s multi-year partnership with the BMW Group.” But under the state incentives agreement dated Nov. 30, 2022, if Envision instead created 400 jobs and invested $400 million by a required deadline, it would not have to repay the full amount of the $135 million state grant or the first $70.3 million in bond funds.

Under the revised maximum $121 million bond proposal, Envision would have to create at least 800 jobs and invest a minimum $800 million – less than what was originally announced by the company.

In a written response last week to The Nerve, Rick Harmon, who is the JBRC's research director and the SFAA’s liaison, said the additional requested $50 million in bonds would be on today’s scheduled SFAA meeting agenda. He said he didn’t know the identity of the company requesting the money until informed by The Nerve.

The five-member SFAA – made up of the governor, state treasurer and comptroller general, and chairmen of the House Ways and Means and Senate Finance committees – likely will approve the additional taxpayer-funded bonds for Envision, given the SFAA’s past actions on similar requests.

If you wanna be my lover, you have got to give – so the Spice Girls’ “Wannabe” song goes.

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-394-8273 or [email protected]. Follow The Nerve on Facebook and X (formerlyTwitter) @thenervesc.

Nerve stories are free to reprint and repost with permission by and credit to The Nerve.