Columbia Economic Notes

[The ATX]

2 hours ago, wwmiv said:

Columbia scores well on livability, at least.

Welcome to Urban Planet!

[wwmiv]

22 hours ago, The ATX said:

Welcome to Urban Planet!

LOl Thanks man, it was you who unwittingly brought me here from SSP. SSP has a total lack of Columbia related content, whereas this forum doesn't so... just as I split my time between Austin, San Antonio, and Columbia in real life, you'll probably see me here pretty often as well as on SSP's Austin subforum still. 

[growingup15]

1 hour ago, wwmiv said:

LOl Thanks man, it was you who unwittingly brought me here from SSP. SSP has a total lack of Columbia related content, whereas this forum doesn't so... just as I split my time between Austin, San Antonio, and Columbia in real life, you'll probably see me here pretty often as well as on SSP's Austin subforum still. 

You should try City data also I use both UP and CD both are pretty fun. CD is a bit more active though.

[wwmiv]

57 minutes ago, growingup15 said:

You should try City data also I use both UP and CD both are pretty fun. CD is a bit more active though.

Yeah no. I'm not into endless city vs. city discussions with vacuous content, which City Data has a bunch of. I mostly just watch the posts and take mental stock of the activity. It helps inform my some of my research ideas as a PhD student here at USC in political science (I study the effects on representation of the underlying political geography, of which urban geography is an important piece). 

[krazeeboi]

Columbia-based South State Bank has acquired Charlotte-based Park Sterling Bank in a merger deal that creates a combined $14.5 billion franchise throughout the Carolinas, Virginia and Georgia.

The combined company will have $14.5 billion in assets, $11.5 billion in deposits and $10.4 billion in loans. South State will have 183 bank branches across the four states.

Read more here: http://www.thestate.com/news/local/article147076274.html#storylink=cpy

 

[krazeeboi]

Columbia tied for 18th (with three other MSAs) for per capita income growth among the nation's 75 largest MSAs from 2014-2016. Income grew by 7.3% to $41,591.  Charleston ranked 30th (tied with one other MSA) with its per capita income growing by 6.6% to $44,998 and Greenville ranked 35th (tied with two other MSAs), experiencing 6.3% per capita income growth to $40,246.

[krazeeboi]

A 265,000-square-foot warehouse and distribution facility at 1115 and 1087 Shop Road is slated to become a 500-bed student housing complex.

[krazeeboi]

Here's an article in the P&C about the loss of some company HQs/executive leadership in Columbia due to mergers and acquisitions. It's an unfortunate trend right now and one that  is happening in several other cities and surely it's an issue that needs attention, but I was pretty surprised by this line in the article:

"Columbia chronically has lagged behind South Carolina’s large metro areas, Charleston and Greenville-Spartanburg, for company headquarters."

First of all, this isn't true; historically Columbia contained a fair amount of company headquarters, especially banks and insurance companies and it has managed to hold on to some of those. The use of the world "chronically" implies some long-term trend and that's simply not the case at all. Secondly, we know that the Upstate has done well in snagging some big-name regional headquarters for manufacturing firms in particular, but Charleston? Where are all of these company headquarters in Charleston that the article is referring to? And thirdly, the implication that Columbia is not among SC's large metro areas is pretty jarring. That one line says much more about the perception of Columbia in the Lowcountry than the reality. Obviously Charleston has always had a superiority complex towards the rest of the state and Columbia in particular, but this goes a bit beyond that. 

[CLT_sc]

On 6/11/2019 at 1:09 PM, krazeeboi said:

Here's an article in the P&C about the loss of some company HQs/executive leadership in Columbia due to mergers and acquisitions. It's an unfortunate trend right now and one that  is happening in several other cities and surely it's an issue that needs attention, but I was pretty surprised by this line in the article:

"Columbia chronically has lagged behind South Carolina’s large metro areas, Charleston and Greenville-Spartanburg, for company headquarters."

First of all, this isn't true; historically Columbia contained a fair amount of company headquarters, especially banks and insurance companies and it has managed to hold on to some of those. The use of the world "chronically" implies some long-term trend and that's simply not the case at all. Secondly, we know that the Upstate has done well in snagging some big-name regional headquarters for manufacturing firms in particular, but Charleston? Where are all of these company headquarters in Charleston that the article is referring to? And thirdly, the implication that Columbia is not among SC's large metro areas is pretty jarring. That one line says much more about the perception of Columbia in the Lowcountry than the reality. Obviously Charleston has always had a superiority complex towards the rest of the state and Columbia in particular, but this goes a bit beyond that. 

Articles like this really show how little some journalist actually research their topic.  Every city will lose a company HQ, it is a function of the business cycle.  They cited Greenville as a city that attracts HQ operations when it has actually lost a number of firms as well...Certus, Bi-Lo, South Financial and others.  Charlotte has lost Harris Teeter, Family Dollar, Wachovia and others as well. 

So, for me, it comes down to what a metro is gaining, is it attracting business, and is it growing businesses.  On both fronts, Cola does as well as anyone in SC with the exception of manufacturing.  

The honest truth is that SC as a state needs to seriously begin recruiting more HQ operations and regional offices. No metro in SC outside of Charlotte is strong in recruiting the hose types of operations.

So, this article is about what I expect from writers who really don’t do a good job.

[krazeeboi]

On 6/14/2019 at 10:24 AM, CLT_sc said:

 Articles like this really show how little some journalist actually research their topic.  Every city will lose a company HQ, it is a function of the business cycle.  They cited Greenville as a city that attracts HQ operations when it has actually lost a number of firms as well...Certus, Bi-Lo, South Financial and others.  Charlotte has lost Harris Teeter, Family Dollar, Wachovia and others as well. 

So, for me, it comes down to what a metro is gaining, is it attracting business, and is it growing businesses.  On both fronts, Cola does as well as anyone in SC with the exception of manufacturing.  

The honest truth is that SC as a state needs to seriously begin recruiting more HQ operations and regional offices. No metro in SC outside of Charlotte is strong in recruiting the hose types of operations.

So, this article is about what I expect from writers who really don’t do a good job.

Yep, and the gains in York and Lancaster counties are just them riding Charlotte's coattails. I mean it's better to have those corporations than not, but it's just taking advantage of proximity to Charlotte. Charlotte/NC are the ones that have made the progressive political moves and made the proper investments in their human and physical infrastructures to be attractive to those corporations and SC is there to just be a container for spillover. It's really a shame that that's the extent of SC's economic development MO when it comes to attracting higher-wage, white-collar jobs. 

[carolinagarnet]

1 hour ago, krazeeboi said:

Yep, and the gains in York and Lancaster counties are just them riding Charlotte's coattails. I mean it's better to have those corporations than not, but it's just taking advantage of proximity to Charlotte. Charlotte/NC are the ones that have made the progressive political moves and made the proper investments in their human and physical infrastructures to be attractive to those corporations and SC is there to just be a container for spillover. It's really a shame that that's the extent of SC's economic development MO when it comes to attracting higher-wage, white-collar jobs. 

North Carolina WAS doing a lot of HQ recruiting under Bev Purdue, then it redirected all of its energy to manufacturing under McCrory, before finally returning the original strategy under Roy Cooper.  SC will have no appetite for corporate recruiting as long as the governor's base is in suburban and rural areas.  This really is a party line issue.

[krazeeboi]

The City of Columbia and Richland County are offering up to a 50% tax reduction to businesses and developers on commercial projects worth more than $30 million. The tax reduction will last 10 years.

Richland County Council Chair Paul Livingston said the current county tax rate makes it difficult to attract business and industry. The county rate is affected by large amounts of government-owned land that is not taxed, such as the University of South Carolina, state office buildings and property, and Fort Jackson.  

The properties that would qualify for the tax reduction would be taxed at the 6% commercial rate. The tax breaks would also offer incentives to developers who build public infrastructure such as streets, parking, sidewalks and parks, with an aim of potentially luring mixed-use developers to large parcels of land. Developers have until 2022 to apply for the tax incentives.

https://columbiabusinessreport.com/news/real-estate-commercial/76831/

[GvilleSC]

43 minutes ago, krazeeboi said:

The City of Columbia and Richland County are offering up to a 50% tax reduction to businesses and developers on commercial projects worth more than $30 million. The tax reduction will last 10 years.

Richland County Council Chair Paul Livingston said the current county tax rate makes it difficult to attract business and industry. The county rate is affected by large amounts of government-owned land that is not taxed, such as the University of South Carolina, state office buildings and property, and Fort Jackson.  

The properties that would qualify for the tax reduction would be taxed at the 6% commercial rate. The tax breaks would also offer incentives to developers who build public infrastructure such as streets, parking, sidewalks and parks, with an aim of potentially luring mixed-use developers to large parcels of land. Developers have until 2022 to apply for the tax incentives.

https://columbiabusinessreport.com/news/real-estate-commercial/76831/

Out of genuine curiosity and concern— Columbia has done just fine for years.  What has changed over the more recent past that has led to this? It’s great if it works and is worth it for the tax base.  Hopefully it attracts good development and not just money.  

The more recent ploy to attract high rises for tax purposes and building on top of city garages were naive and clearly have not panned out. It seems like an approach has changed for the city, and it shouldn’t have. Columbia is just fine being itself, IMO. 

Edited August 5, 2019 by GvilleSC

[CLT_sc]

16 minutes ago, GvilleSC said:

Out of genuine curiosity and concern— Columbia has done just fine for years.  What has changed over the more recent past that has led to this? It’s great if it works and is worth it for the tax base.  Hopefully it attracts good development and not just money.  

The more recent ploy to attract high rises for tax purposes and building on top of city garages were naive and clearly have not panned out. It seems like an approach has changed for the city, and it shouldn’t have. Columbia is just fine being itself, IMO. 

I am not sure what the answer is, but through various things I’ve read, it feels like Cola has a higher tax structure than other SC cities.  It would be interesting to see what the differences are and then, after layering in empowerment zones, what the real difference is between the cities.

I see this as a way to bridge that gap and, I hope this is true, it feels like a lot of projects are in the pipeline waiting for this to occur.  If so, this would definitely improve the city and allow developers a chance to attract new jobs to the city via new class A offices.  There is not a need for 30 story buildings unless someone has an ego, but a cluster in the 20 story range with a mix of hotels and apartments would be cool.  This may kick off some dormant projects that have been proposed for the city.

[krazeeboi]

11 hours ago, GvilleSC said:

Out of genuine curiosity and concern— Columbia has done just fine for years.  What has changed over the more recent past that has led to this? It’s great if it works and is worth it for the tax base.  Hopefully it attracts good development and not just money.  

The more recent ploy to attract high rises for tax purposes and building on top of city garages were naive and clearly have not panned out. It seems like an approach has changed for the city, and it shouldn’t have. Columbia is just fine being itself, IMO. 

Well if by Columbia "being itself" you mean that it should be content with just being the state capital and home to USC and Fort Jackson with a couple of private companies thrown in, then city leaders decided some time ago that this would result in it being left in the dust by other cities pursuing more development in an effort to become ever more attractive to new residents and businesses. This move by city and county leaders wouldn't fundamentally change what Columbia is but would help it to fulfill its potential as a city in light of things like state government moving agencies and functions outside of downtown and wanting to offload that property, USC wanting to expand towards the river which would open up more property for development, large employers having left downtown for the suburbs or having been acquired by other companies, etc. The convergence of these factors presents an opportunity for the city to truly grow and flesh out with much of the basic infrastructure already in place (e.g., large street grid with wide streets) to accommodate such development.

It appears as though this move is tailored for a few specific large mixed-use developments that have been proposed within the last year or so, such as the Kline Steel site proposed development and is specifically in response to the tax credits that developers of private student housing received for building in the city; before those credits were offered, most of those projects located just outside of city limits to take advantage of lower property tax rates in the county. But now that those floodgates have been opened, developers of other projects have their hands out as well. 

The general sentiment in the Columbia area is that the city is missing out on some of the private (non-student) residential and commercial development that has come to Charleston, Greenville, and other cities in the Southeast, particularly in the form of new construction with high property taxes being a primary culprit. I recall some years ago reading that despite being a more populous city, Columbia's tax base was similar to that of Rock Hill's due to all of the nontaxable land in the city, including all of Fort Jackson. So the city has to compensate for that with higher tax rates and fees elsewhere and that's been said to stifle new private construction. The breaks that private student housing has received have certainly worked and new non-student residential and commercial development could really complement that. Also the incentives for developers to build new infrastructure would also be quite helpful; in the past, city leaders have often been chided for attempting to take on too many projects at once which spreads resources thin but with the private sector on the hook for infrastructure instead of the city, this allows more projects to proceed more quickly--at least in theory. The proposed redevelopment of the Capital City Stadium site in particular looks to be a good fit for the way the incentives are structured in this joint deal.

As far as building atop city-owned garages go, it's true that there hasn't been much news on that front since the approach was announced but with hotel occupancy rates at an all-time high in the downtown area these days, this could be the push needed to see some movement which is why a developer is proposing to build a hotel atop the Lady Street garage.

All in all, I think this move could prove to be the catalyst needed to take development in downtown Columbia to the next level and get some large visible parcels developed more quickly. All of this helps to expand the city's tax base by attracting more jobs, more residents, and more visitors.

[GvilleSC]

25 minutes ago, krazeeboi said:

Well if by Columbia "being itself" you mean that it should be content with just being the state capital and home to USC and Fort Jackson with a couple of private companies thrown in, then city leaders decided some time ago that this would result in it being left in the dust by other cities pursuing more development in an effort to become ever more attractive to new residents and businesses. This move by city and county leaders wouldn't fundamentally change what Columbia is but would help it to fulfill its potential 

I think you're misunderstanding my statement. I don't look at Columbia and see a limit to its potential. That is not what I mean by "being itself." Columbia has been able to attract solid development in the past, and has a lot to show for it. I guess I'm just confused over what seems to have changed to have brought this about? 

I would be interested in knowing what the measurable difference is in tax rates are for SC cities. How much of Fort Jackson does the City of Columbia actually provide services for? I assume Ft Jackson has its own police force (?). So, despite it not being taxable, does the city really lose money on its presence? 

[krazeeboi]

57 minutes ago, GvilleSC said:

I think you're misunderstanding my statement. I don't look at Columbia and see a limit to its potential. That is not what I mean by "being itself." Columbia has been able to attract solid development in the past, and has a lot to show for it. I guess I'm just confused over what seems to have changed to have brought this about? 

I would be interested in knowing what the measurable difference is in tax rates are for SC cities. How much of Fort Jackson does the City of Columbia actually provide services for? I assume Ft Jackson has its own police force (?). So, despite it not being taxable, does the city really lose money on its presence? 

What's changed is the spate of private student residential projects that have been built in the city in recent years due to tax breaks being offered to those developers as they considered it somewhat prohibitive to build in the city due to high property taxes. As far as I know, there wasn't really any sort of program or entity governing that process, there wasn't any sort of criteria in place to qualify for the breaks, there wasn't a timeline in place, etc. and developers of other types of projects inquired about breaks for their developments or complained that they weren't eligible. Around the same time as the private student housing boom began (or maybe a bit earlier), a couple of large, high-profile lots became available for development with proposals for non-student oriented mixed-use development  being constructed and some of those lots (Kline, Capital City Stadium) had previous plans fall through for various reasons. So to finally get the ball rolling at those sites which will have among the first large mixed-use developments built there since the recession, the city and county teamed up to offer tax breaks for private developments meeting certain criteria for a specific time period. It's basically like a version of the Bailey Bill which offers developers tax credits for rehabbing historic commercial properties and has been a boon for Main Street in particular.

As far as how much Fort Jackson 'costs' the city, that's a good question and I'm not sure of the answer but aside from that, you still have lots of state government property, USC property, parking lots, and vacant lots not contributing to the tax rolls in the city and a lot of the region's job growth in recent years has gone to the suburbs. 

The city is simply using tax breaks to stimulate development for a period of time just as local and state governments do to stimulate economic growth (usually without any expiration date).

[vicupstate]

Given the Local Option Sales Tax, Columbia's property taxes shouldn't be that high vs. Greenville, which does not have the LOST tax credit. 

There is a perception that Richland and Columbia are poorly manged, which isn't totally off-base either.  I think that hurts them as much as anything. 

This will probably be pretty effective and I respect that the savings have to go toward infrastructure, instead of developer pockets directly.  

Ft. Jackson is probably of little or no cost to either government. 

[krazeeboi]

3 hours ago, vicupstate said:

There is a perception that Richland and Columbia are poorly manged, which isn't totally off-base either.  I think that hurts them as much as anything. 

More specifically, it's been said that the permitting process and all of that has more red tape to get through than it should and I'm sure that plays a role.

[krazeeboi]

The P&C's coverage of the joint city-county tax breaks for new development sheds more light on the situation: https://www.postandcourier.com/business/columbia-offers-tax-break-to-spur-new-offices-housing-stores/article_525ade4e-aef0-11e9-930e-6ba66aea3e3b.html

[krazeeboi]

Richland County purchased 1,300+ acres, enough space to build 5.3 million sq ft of office space and Class A technology and manufacturing buildings, in Blythewood with plans to develop it into Blythewood Business Park in an effort to attract big-name companies, create more job opportunities, increase tax revenue, and more.

[krazeeboi]

CIU's revitalization efforts along Monticello Road are starting to materialize: https://columbiabusinessreport.com/news/education/76937/

[krazeeboi]

Columbia didn't fare too well on Milken Institute's 2020 Best-Performing Cities list, ranking #128 out of 200 large metros. Last year it ranked #111. 

[krazeeboi]

As company headquarters have left the Capital City, a group of entrepreneurs wants to see them replaced with startups built in-house.

A dozen Columbia technology firms have banded together as GrowCo, an organization hoping to fill the niche aiding upstart businesses ready to move beyond early into late stage growth. The group formed with the goal of building 10 times the number of fast-growing Inc. 5,000 ranked companies by the end of the decade. The city had eight in 2019. The year before, there were 10.

https://www.postandcourier.com/business/this-group-of-companies-wants-to-turn-columbia-into-the-next-silicon-harbor/article_fb357924-8bc8-11ea-a053-fb823f459d13.html

[krazeeboi]

A city-commissioned report, authored by a former chief economist at the S.C. Department of Commerce, found the Columbia area’s historically high combined tax rates are nearly double that of Charleston and 1.5 times higher than Greenville. 

“(High taxes) are causing a crisis of disinvestment, which can be seen in declining population, slow income and job growth, and depressed asset valuation,” the report said.

The $25,000 report found Columbia has been largely left behind as South Carolina’s economy has grown faster than all but seven other states over the past decade. It determined:

• Columbia-area property values grew just 16 percent over that span, compared with 36 percent in Greenville, 171 percent in Rock Hill and 217 percent in Charleston.
• The city’s prime working age population — adults aged 25 to 54 — grew by just 2.5 percent over the past decade. The same group grew by 15 percent in Charleston, 34 percent in Greenville and 64 percent in the Rock Hill.
• As Charleston, Greenville and Rock Hill have grown, Columbia’s population has been stagnant over the past decade — including consecutive years of population decline since 2016 — even though the University of South Carolina imports thousands of new students every fall.

The author, Rebecca Gunnlaugsson, an economist who specializes in public finance and taxation, blames a cycle in which high combined property tax rates from the city, Richland County and two major school districts have discouraged businesses from investing here and depressed property values, creating funding shortfalls that lead to even more tax hikes.