Split Council Approves New Duke Facility FILOT Agreement
Greg Wilson/Anderson Observer
Anderson County Council, in a split vote, approved a fee-in-lieu-of-tax (FILOT) agreement with Duke Energy on Tuesday for a proposed $2.5 billion gas combined-cycle plant, which will bring about 30 jobs (at salaries mostly in excess of $100,000), and a projected annual payroll of $3.1 million that would, over 40 years, pour $702 million into county coffers.
Any investment in excess of $400 million is eligible for a super-fee FILOT, one of South Carolina’s tools aimed at luring colossal industry, such as Duke, with a four percent assessment ratio—slashed from the standard six —on a fixed millage of 0.34385 mills The agreement offsets infrastructure costs, up to 20 years’ worth, provided Duke meets its thresholds: $2.2 billion invested by year five, or else the credits wither to 25 percent, the term to 30 years.
Council, which had unanimously approved the agreement in the first two readings, was split on Tuesday, voting 4-3 to approve the tax incentives. County Council Chairman Tommy Dunn, Vice Chairman Brett Sanders, Councilman Glenn Davis and Councilman Chris Sullivan voted in favor of the project. But Councilwoman Cindy Wilson, Councilman Greg Elgin and Councilman Jimmy Davis, all of whom had voted for the pact in the first two readings voted “no” on Tuesday with little or no comment.
Jimmy Davis said that until South Carolina amends the 1898 constitution which created some of the nation’s highest property-tax burdens for manufacturers, largely because that set manufacturing property at a 10.5 percent assessment ratio. That has put the state near the top nationally for manufacturing property taxes, although a 2022 law changed the effective tax treatment for many manufacturers by using a partial-value exemption that brings the effective rate down to 6 percent.
Even so, the state has long used incentives like FILOT agreements to help recruit large industrial projects. Under those deals, qualifying manufacturers that invest at least $2.5 million can negotiate a lower assessment ratio, often down to 6 percent for up to 20 years, alongside other tax concessions. Super-fee FILOTs can reduce that rate to four percent with an investment of at least $400 million or $125 million with at least 125 new jobs.
Public comments, led by county council candidates Dave Shalaby, Dist. 4, and Collin Alexander, Dist. 7, who asserted that the county could have brokered a more favorable deal on the Duke Project and used the additional funds for such projects as roads. Alexander criticized the agreement as a “quick and easy deal.”
Other citizens expressed potential environmental and concerns.
Meanwhile, Anderson School Dist. 3 Superintendent Kathy Hipp said if the deal did not pass, it would be a loss for her students. Hipp said the project would increase funding in her district, one of the state’s poorest, from $1.7 million to “7,8,9,10 million.” Voters in Dist. 3 recently approved a bond to build a new middle school. Hipp said the state-owned power plant in her district, which does not have a FILOT, produces about $300,000 annually for her schools.
Sanders said that much of what he heard during public comments and the public hearing on the Duke issue was based on emotions, not facts. Sanders said the almost $700 million projected revenue from the project will help the county fund such things as public safety and other services without raising property taxes on individuals.
Anderson County Economic Director Burriss Nelson, in an attempt to address environmental concerns, said the plant is required to meet all EPA standards, and will be regularly monitored by the South Carolina Department of Environmental Services. Nelson also said the new generation turbines to be used at the Duke site burn clean.
