The Business Journal

Charlotte, N.C.

April 17, 1995

S.C. adds perks to brink AMP to York County

Jeff Osterkamp, Staff Writer

Copyright © 1995, The Business Journal (Charlotte, N.C.)

An electrical connectors manufacturer likely to be one of the Charlotte area's largest industrial recruits in years is being lured to York County by an ever-growing list of S.C. tax incentives.

Sources say AMP Inc. hasn't officially decided whether it will choose an Interstate 77 site south of Rock Hill or one of two Cabarrus County sites.

But S.C. legislators have passed laws improving an already strong incentives package in hopes of luring the plant, expected to employ 500 to 1,000 and cost up to $100 million.

N.C. officials hope AMP will be attracted by such things as a lower base tax and higher average test scores on college entrance exams. South Carolina hopes its latest offers of substantial tax breaks will clinch the deal.

"We believe we have better quality here in a lot of different areas, but (South Carolina) has incentives they can throw at them that we just aren't allowed to offer," says Cabarrus County Commissioner Arne Fennel, who says the county would build water and sewer lines for AMP but avoid direct tax cuts. "We've got a lot of good businesses looking at us. We don't need to go out and buy any business."

AMP, meanwhile, won't confirm that it's looking to open a Charlotte-area plant. Sources say it's been considering Pitts School Road and International Business Park, both in Cabarrus, and an Interstate 77 site south of Rock Hill.

"I think, frankly, they were looking to see whether they could get these changes made," says state Sen. Wes Hayes, a Rock Hill Republican who helped pass recent S.C. tax law changes that would benefit AMP. "North Carolina has a little tax advantage to start with, so South Carolina has to try a little harder to catch up."

A September study by state-appointed N.C. industry leaders found that manufacturers pay higher overall taxes, not counting incentives, in South Carolina than in North Carolina.

A hypothetical manufacturer with $1 billion in annual sales would pay an average of $7.9 million in N.C. taxes, ninth-highest among 12 surveyed Southeastern states.

The study found the same company would pay an average $9.2 million in S.C. taxes, fifth-highest among the 12 states.

But large manufacturers can hope incentives will reduce their S.C. tax burden by up to 50% for five years and by lesser amounts for up to 20 years.

S.C. officials believe they offer among the best incentive packages in the South.
"I would certainly think so," says Vicki Ringer, S.C. Department of Revenue spokeswoman. "That can be reflected in the industries that have located here recently."

Most recently, those include Charlotte-based steel manufacturer Nucor Corp., which is building a $450 million to $500 million plant in Berkeley County, employing 500 to 600.

The latest S.C. tax breaks, signed into law by Gov. David Beasley April 4, expand the areas that can offer the best incentives, including corporate state income tax credits of $1,500 per employee for five years.

The so-called enterprise zone legislation also allows companies to keep part of their employee withholding taxes. If AMP pays its workers between $10 and $15 per hour, it could retain 4% of its gross annual payroll for 15 years.

The law requires companies to use the money for construction, pollution control, infrastructure, employee training or property acquisition.

Hayes even claims legislation will allow AMP and other companies to declare 90% depreciation on molds used with electronic equipment, instead of the current 80%, he says.

"This would be a great company for any state, but particularly for South Carolina," Hayes says. "It would be a real shot in the arm."

North Carolina's recruitment efforts have relied partly on convincing AMP it offers a superior work force. The state offers extensive worker training at community colleges for businesses creating jobs.

Jim Lunsford, Cabarrus County Schools vocational and technical education director, met twice with AMP.

"With all the amenities, I think we were scoring really well," Lunsford says. "I just got a sense that (incentives) were not that big a deal. It was not something that was going to drive the decision. What was going to drive it was the technical work force."

Or so North Carolina hopes. By law it offers few industry incentives other than worker training, county-sponsored water and sewer improvements, state-sponsored road construction and Gov. Jim Hunt's discretionary recruitment fund.

The N.C. General Assembly voted Hunt a $5 million fund for fiscal 1993 and increased it to $7 million in fiscal 1994.

But the state now requires local governments to match any discretionary fund contributions, designed to be a $1,000 donation for each job a company creates. Hunt has already used all this year's fund and has no assurances the Legislature will renew it.

Used with permission.
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Copyright © 1995, The Business Journal (Charlotte, N.C.).

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