The Charlotte Observer

October 14, 1995

SC offered Wal-Mart sweeter deal on incentives, official says

Taylor Batten, Staff Writer

Copyright © 1995, The Charlotte Observer

The news was all too familiar to business recruiter Bruce Andrews: Wal-Mart had spurned North Carolina and would build its $35 million distribution center in South Carolina, just 4 miles across the state line.

The reason? As Andrews sees it, North Carolina couldn't offer the cash South Carolina could.

``It boiled down to the incentives that South Carolina offered,'' said Andrews, the N.C. Commerce Department recruiter who led the state's efforts on the project. ``It was just much, much more than North Carolina could offer.''

Wal-Mart announced Thursday it would create 400 jobs at its 830,000-square-foot distribution center on U.S. 601 just north of Pageland, S.C. The center will supply groceries to Wal-Mart Supercenters - large stores that include supermarkets - throughout the Southeast.

On several counts, South Carolina put up a more attractive offer than North Carolina:

* South Carolina offered $2,500 a job a year for five years in tax credits. That would amount to $1 million a year if the center is fully staffed. North Carolina offered zero in tax credits.

* Under a new S.C. program, a business in an enterprise zone can keep 2 percent to 5 percent of its payroll as a tax credit. The higher the average pay, the higher the percentage. Pageland is in an enterprise zone. Since Wal-Mart is expected to pay an average of about $8 an hour, it would save 3 percent - or $200,000 a year if the plant is fully staffed. North Carolina has no enterprise zones.

* South Carolina - through Lynches River Electric Cooperative - offered 120 acres for free. North Carolina would have charged for its land.

``That's always an appetizing thing, isn't it?'' Andrews said of free land.

Wal-Mart and Union County were so close to a deal that ``the wedding dress was ordered,'' Andrews said, but the offer from South Carolina and Chesterfield County was too irresistible.

``They found several beautiful sites in North Carolina that fitted them very near to ideal to what they wanted,'' Andrews said. ``States are much more competitive than they used to be, and the incentive has become the buzzword.''

Wal-Mart also looked at Cabarrus, Anson, Rowan, Randolph, Stanly and Lancaster County, S.C., before whittling the decision to Union and Chesterfield counties.

Wal-Mart's decision is reminiscent of AMP's decision earlier this year to open a factory in York County, S.C., rather than Cabarrus County. The enterprise zone act, which Wal-Mart is capitalizing on, became law in April specifically to help lure AMP, an electronics firm, to South Carolina.

Wal-Mart was first interested in North Carolina and the Charlotte area, Andrews said. Only after looking more closely did it broaden its search to include South Carolina.

``Since we were similar, at that point, the enterprise zone came in and we were able to offer a very generous package to them,'' said Cherry McCoy, director of economic development in Chesterfield County. ``Incentive dollars get you looked at, then you work through the middle part, then at the end, when there are several fairly equal (sites), it tips the scales again.''

Wal-Mart initially wanted to be near I-85 or I-77 to facilitate trucks coming and going from the distribution center to stores throughout the region, Andrews and McCoy said. Pageland, about 30 miles southeast of Charlotte, is 40 miles from the nearest interstate. But the widening of U.S. 601 and the completion of I-485 around Charlotte will give the trucks easy access to both interstates. Transportation officials hope to complete the leg of I-485 from I-77 to Matthews by September 1997.

Used with permission.
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Copyright © 1995, The Charlotte Observer.

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