A Midlands county just cut its economic development arm. How will it attract business?
Last month, Richland County Council voted to dissolve its economic development department – credited with attracting billions to the Midlands by helping to secure deals for Scout Motors, Mark Anthony Brewing and other major industries.
But starting in the new year, that department will no longer be a part of the county government. Instead, it will become a nonprofit entity separate from the county’s direct oversight.
Places like Greenville and Spartanburg have similar entities that get tax dollars to promote economic development. Proponents say it’s a better way to manage economic growth because private companies and business leaders can play a bigger role.
But not everyone is on board with the change. Concerns about transparency, management and who will ultimately be appointed to oversee the new nonprofit have some on council and in the community raising their eyebrows.
What is it?
You might see the county refer to the new entity as a P3, or a public, private partnership. But essentially, it’s a nonprofit that will receive some government money to assist with economic development.
Establishing the nonprofit won’t fundamentally change the county’s goals for economic development. The mission is still to attract new industries, help existing businesses expand, and to make sure education and housing keep pace with job quality and availability.
How will that mission be better served by moving the work outside of the county government? The new entity would be able to meet business needs in ways the county can’t by law, advocates say. For example, the nonprofit could host and pay for business networking events or recruitment fairs that the county wouldn’t be allowed to spend on, said Council Chair Jesica Mackey.
“A high percentage of the persons who are in our community who are executives of major companies have no idea what our role is in economic development,” said County Councilman Paul Livingston at a 2023 meeting about the change. “They are not aware of how Richland County makes things work for them.”
Having a non-government group work with businesses can also help private companies feel more at ease, explained Allen Smith, CEO of One Spartanburg, a similar entity working to bring economic development to Spartanburg County.
“As a private nonprofit, if a prospect comes to the community, we’re viewed to be more of their advocate than quote ‘the government’ would be,” Smith said. “Right or wrong … sometimes a prospect may look to the government as the entity that’s going to slow them down.”
Having a nonprofit as a liaison can help all parties feel at ease, Smith said, while still allowing for and facilitating collaboration between government public entities and private companies.
For example, Richland County’s nonprofit will help negotiate tax incentives for new developments, but the County Council would still have to approve those incentives.
In addition to helping negotiate incentive packages, the nonprofit will also develop and plan for future workforce needs in the county, like coordinating with colleges and universities to ensure the right degree programs are offered. It will also collect workforce, employment and other data, help find funding for more economic development programs and be responsible for annual action plans to help the county meet its goals.
The county council passed the measure 7-2 in a vote last month, after talking about it in committee meetings for the last several years. In 2021, the county adopted a strategic plan that included the recommendation for reimagining economic development.
“Privatization of county economic development is not the goal,” that 2021 plan reads. “Rather, a new [public-private partnership] will allow Richland County to fully partner with the private sector and better utilize the resources, relationships, and expertise of the business community. County leadership will have the opportunity to work with a rising class of business leaders on growth related matters critical to the county’s future.”
Not everyone’s on board
But not everyone agrees that the nonprofit is a good fit for Richland County.
Richland County Council members Jason Branham and Chakisse Newton were the two no votes on the plan earlier this month. Both said they felt it was too risky. Newton said she did not think the county spent enough time considering alternatives.
One of the biggest concerns from opponents is that the nonprofit takes control away from the county and gives it to as-yet unnamed board members. Branham during the Nov. 12 council meeting took particular issue with how the board would be formed and how much control the county would have in ensuring its own strategic plan was prioritized.
The nonprofit will be managed by a board of directors with nine members: The chair of county council and the chair of the county’s economic development committee, three council-appointed members and three members that will be voted on by the other members of the board.
“I’m very concerned about the quality of the people that will end up on the board,” said local attorney and longtime government watchdog John Crangle.
Crangle said he is not necessarily opposed to the notion of the public-private approach to economic development, but he worries about the ability and the integrity of whoever will be appointed to oversee it.
The county will name its board members in coming months.
Branham said during the meeting in early November that he also did not think the bylaws were ready.
“This in effect would be like a first draft of bylaws,” Branham said during the Nov. 12 vote.
He added that he felt there was too much risk in the approach the county ultimately approved.
Chakisse Newton also voted no, saying she doesn’t think the approach is right for Richland County and would have preferred to see other options presented.
“As we move forward in our further discussions I would like us to circle back to … what our metrics for success are for moving it outside of the county,” Newton said. “Personally I would like to see … a kill switch or a trigger where we say this is what we’re doing to achieve these specific goals.”
The establishment of the economic development nonprofit does not change the county’s budget. The money allocated for the county’s economic development department will now go toward the nonprofit.
Mackey said the county will discuss staffing, branding and more over the next 6-12 months.
This story was originally published December 3, 2024 at 6:00 AM.
