By: Charles Warner Editor
October 10, 2013
UNION COUNTY — The lack of available industrial space has limited Union County to competing for less than 25 percent of prospective industries looking for a place to do business according to the executive director of the Union County Development Board.
On Tuesday, Union County Council voted unanimously to approve second reading of an ordinance authorizing the county to issue a $2.5 million special source revenue bond. The issuance of the bond is part of the county’s application for a $2 million loan from Santee Cooper to finance the construction of a 60,000-square-foot spec building and accompanying 60,000-square-foot building pad. The county is applying for the loan with the support of the City of Union which, as a member of the Piedmont Municipal Power Agency, is eligible for the loan program. In exchange for supporting the county’s application for the loan, the city will provide power to the spec building once it is built.
The loan is zero interest for the first five years, but in order to apply for it, the county must demonstrate its ability to repay it through the issuance of the bond. The county will use revenue generated by its multi-county industrial park agreements to cover the loan. The agreements generate more than $200,000 a year in revenue for the county.
Supervisor Tommy Sinclair, however, has expressed confidence that the county will not have to repay the loan with the multi-county agreement funds. Instead, the spec building will pay the loan itself once it is sold to an industry.
The county’s chances of doing this would be increased because the spec building could potentially more than quadruple the percentage of industries interested in locating in Union County.
Andrena Powell-Baker, executive director of the Union County Development Board, said Wednesday that the lack of a spec building or other industrial space has limited the county’s appeal to industry. Powell-Baker pointed out that the overwhelming majority (77 percent) of prospective industries that request information about the county are looking for an existing building that can meet their needs. She said that the lack of a spec building means the county is only able to compete for 23 percent of the prospective industries looking for a community to do business in.
Powell-Baker pointed out that the lack of spec building or other existing buildings that meets the needs industry is not unique to Union County.
“Across the state, across the southeast actually, we don’t have a lot of good building space,” Powell-Baker said. “We don’t have good available space for manufacturing, distribution or warehousing.
“It’s a good problem to have because it means we’ve filled all our available space, but it sets up another challenge as businesses are looking for a building,” he said. “That’s their first cut when they are on the search.”
Powell-Baker also pointed out that the solution to this problem, the construction of a spec building, is not unique to Union County either. She said several other counties in South Carolina that the county competes with for prospective industry are also building spec buildings. What is unique, however, is that Union County is going a step further to make itself attractive to prospective industry by developing a spec building that is larger, closer to industry standards, and ready not only to accommodate an industry, but its future expansion as well.
“What we’ve tried to do is make ours a little more unique than the others,” Powell-Baker said. “In that regard, most of the spec buildings being built now in South Carolina are 50,000 square feet. To give us a slight edge we are going with a 60,000 square-foot building plus an adjacent 60,000 square-foot building pad which will actually give us a 120,000 square-foot site.”
Another factor in the size of the spec building and pad was the building space sought by prospective industries making inquiries about Union County.
“We looked at the number of requests from prospects we had coming into Union County over the last several years,” Powell-Baker said. “We found that 47 percent of the prospects were looking for building space from 50,000 square feet to 200,000 square feet and 24 percent were looking for 20,000 square feet to 49,000 square feet. That kind of gave us a framework for determining the size of the spec building.”
Powell-Baker said that while getting a prospective industry to locate in the spec building is a goal of having the facility, it is not the only goal. She said the larger goal is getting prospective industry to locate in Union County regardless of whether it sets up operations in the spec building.
“A spec building is the carrot that gets the prospect interested in coming to your community,” Powell-Baker said. “We want to build this building as close to the industry standards that we can, but the objective is to get the prospective industry to visit. You want to get them across the table from you.
“It’s kind of like buying a house, you look at several houses before you buy one,” she said. “The developer has a spec home in the neighborhood that gets you there. You may not buy the spec home but you may buy the house down the street.”
Powell-Baker pointed out that this will be the third spec building built in Union County. The first, which now houses Haemonetics, was built by the City of Union as was the second which houses Timken Industrial Services. The new spec building will be the first one built by the county and Powell-Baker said it will make the county more attractive by reducing the risk a prospective industry incurs when it decides to locate in a community.
“Prospects are always looking for ways to minimize their risks,” Powell-Baker said. “If we can help them do that by having a shell building ready, a pad ready, then it gives us an edge over our competitors who don’t have the same thing. Bottom line is if we don’t have a speculative building in this community we miss out on prospects looking for a building.”
Editor Charles Warner can be reached at 864-427-1234, ext. 14, or by email at email@example.com.