When most people think of a multicounty business park, what comes to mind is usually a physical location.
“A lot of people have this idea of a multicounty business park where they think of a landscaped entrance, brick pillars, large buildings and a roadway where they can actually drive into the business park itself,” said Greenville County Council Chairman Butch Kirven. “But that’s not what we’re talking about here.”
Instead, the type of multicounty business park to which Kirven is referring is not one physical location at all; rather, it’s a legal vehicle by which the county can collect properties at different locations, which all qualify for the types of incentives that would benefit both developers and the public good.
Although the term “multicounty business park” might call to mind a property that stretches across county lines, these parks do not actually mandate any contiguous infrastructure from one county to another. Practically speaking, any development that meets legal qualifications can be included in the park, regardless of its location within the county.
“I think it’s a good model to achieve the desired ends of increasing the availability of workforce and affordable housing.” – Butch Kirven, County Council Chairman
What is required, however, is that contiguous counties share revenue generated from money the property in the park produces.
“It’s shared revenue, not shared infrastructure,” said Philip Land, a business lawyer at Haynsworth Sinkler Boyd, who has assisted companies in structuring tax incentives to facilitate new investment and expansion.
That revenue does not need to be proportional, either. A hypothetical development in Greenville placed into the existing multicounty park between Anderson and Greenville counties might only bring 1% of its revenue to Anderson, with 99% going to Greenville. But the terms of the park itself might also allow for a project in Anderson to provide 1% of revenue to Greenville, with 99% going to Anderson.
When local governments place such a development into a multicounty business park, they are able to levy fees instead of taxes against the property. This gives local governments like Greenville County (with the consent of the city if the project is within city limits) the flexibility to offer what are called special source revenue credits, or SSRCs, which in effect reduce property taxes for a negotiated period of time. In exchange, the money saved by developers will go toward infrastructure that solves a “public purpose,” as outlined by the state Supreme Court.
That public purpose, according to the court’s definition, can be anything that “has for its objective the promotion of public health, safety, morals, general welfare, security, prosperity and contentment of all the inhabitants of residents, or at least a substantial part thereof.”
But for Greenville, the public purpose that’s top of mind is affordable housing.
“It’s kind of a new thing,” said Greenville Mayor Knox White. “But from an affordable housing perspective, it’s been a very effective tool.”
Affordable housing and apartments
Anyone who regularly drives down Academy Street in Greenville might not be aware they are passing by what will soon be the newest addition to the multicounty business park between Greenville and Anderson Counties.
The McClaren, a 9-story, mixed-use complex, will bring 244 luxury apartments to downtown Greenville. Sitting on the corner of Rhett and Wardlaw streets, with its construction site clearly visible to passing motorists on Academy Street, the development will include a 12,000-square-foot promenade framing 14,000 square feet of retail space.
Although the complex will encompass half a city block, it’s hardly the scale of a typical business park.
But thanks to a July 8 court ruling from the South Carolina Court of Appeals, developers can now be confident that mixed-use complexes like The McClaren will meet the qualifications to be included in a multicounty business park.
The ruling from the Court of Appeals held that for-profit student dormitories should be considered commercial enterprises that fall within the definition of “business” for the purpose of a business park. In general terms, that means that any rental apartments meet the standard.
Land said developers of mixed-used projects should be excited by the ruling, which validated what was already a broad consensus within the economic development community.
“To the extent that the public parties, municipalities and counties want to promote affordable housing, they can do so by offering special source revenue credits to a project in exchange for that project’s agreement to reserve a portion of the project for affordable housing,” Land said.
Kirven said he sees the model as a boon for both developers and the community as a whole, which he believes will be replicated in the years to come.
“I think it’s a good model to achieve the desired ends of increasing the availability of workforce and affordable housing,” he said. “I give these developers a lot of credit for working toward that.”