Politics & Government

SC Senate approves $115 million tax breaks to bring Carolina Panthers across border

South Carolina likely will offer the Carolina Panthers $115 million in tax breaks to move the Charlotte-based NFL team’s headquarters and practice facilities across the N.C. border and to Rock Hill.

The tax discounts proposal passed the state Senate 27-15 Thursday after a days-long debate featuring questions about the deal’s costs and projected benefits for South Carolina and skepticism over offering financial help to the Panthers’ billionaire owner, David Tepper. It is expected to become law later this month after six House and Senate members meet to negotiate minor points in the bill.

The bill’s passage arguably marks Republican Gov. Henry McMaster’s greatest legislative accomplishment since he stepped into the state’s top office in January 2017 after former Gov. Nikki Haley’s departure. McMaster and top State House leaders announced the tax breaks proposal in March and shepherded its passage in the House of Representatives two weeks later.

“This vote sends a resounding message to the world that South Carolina is committed to creating the most competitive business environment in the world so that South Carolinians can benefit from jobs created by great organizations like the @Panthers,” McMaster tweeted Thursday after the vote, adding the team’s official hashtag, #KeepPounding.

Its passage was delayed two months in the Senate by freshman state Sen. Dick Harpootlian, D-Richland, who blocked a vote on the bill in order to force the state Commerce Department to take the unprecedented step of releasing its secret cost-benefit analysis of the deal.

Harpootlian, who then hired an economist to call those projections into question, lifted his objection to the bill Tuesday but urged his colleagues not to vote for it.

“I’ve come to the troubling conclusion that the Panthers’ proposal is precisely as ill-defined and unvetted as has been represented to us and that it rests on a series of flawed assumptions,” he said during a lengthy Senate floor speech.

‘Thinking big’

The Panthers have been waiting on the bill to pass before moving forward with plans to purchase up to 200 acres of land in Rock Hill and build a complex that is expected to rank among the best facilities anywhere in the NFL.

Officials have said the project will feature an orthopedic sports medicine facility employing about 200 people and a hotel with at least 150 rooms and space for conferences. It also could attract a corporate headquarters and residential projects, a team official told The State.

Plans for the project also include a new $40 million interchange on Interstate 77 to provide easy access to the complex in a traffic-congested area. It is estimated the federal government would pay about $20 million for that road project. The state would pitch in $12.5 million — another source of heartburn for skeptical senators — and the city of Rock Hill would kick in the rest: $7.5 million.

“There’s a misunderstanding that we are building a little practice facility,” Mark Hart, the Panthers’ vice president for development, told The State in April. “But our new headquarters is just a portion of the project we want to build. ... (Tepper) is thinking big.”

The Panthers want to start construction later this year and move into the complex in the first quarter of 2022.

“I’m celebrating,” Rock Hill Mayor John Gettys said Thursday. “What a great day for Rock Hill. ... We’re committed to (making) sure this is bigger and better than anything anybody can imagine.”

House Majority Leader Gary Simrill, R-York, said the project is a “fantastic opportunity” for the state.

“For Rock Hill and York County specifically, obviously to have the Panthers in our area is a huge win for us,” he said. “We’ve worked hard and long as a community because we were under the shade of Charlotte. We had to set ourselves out.”

A fight in the Senate

The Senate debate on the proposal took three days. In the midst of it on Wednesday, Tepper inserted an ultimatum, telling reporters he won’t move the team’s operations to South Carolina unless the General Assembly offers the tax breaks.

“It’s going to cost us a lot of money to go down to South Carolina,” Tepper said. “We’re going to have to put out real money to go down there. So it’s not like we get that money from South Carolina, and that’s it. There’s a lot of money in a facility that we have to invest.

“They’ll have to make a decision whether they want it or not,” Tepper added. “I’ll stay in Charlotte. I could stay home.”

Still, the proposal faced a host of skepticism even before debate began Tuesday.

Senators from across South Carolina have asked why they should support tax breaks that benefit only the north-central region of the state. Others wondered aloud why they should offer tax breaks to a team whose owner is worth more than $11 billion.

In criticizing the deal on the Senate floor, Harpootlian said lawmakers have fast-tracked the bill through the Legislature without any real debate or written promises from the Panthers about the project’s economic benefits.

“We spent more time in a committee talking about whether miniature horses ought to be considered service animals than we have discussing this bill,” Harpootlian said.

He asked free market-loving Republican senators how they would explain to their constituents “this massive piece of corporate welfare to benefit a single corporation and its billionaire owner.”

He asked his fellow Democrats how they plan to explain “why one billionaire received a $40 million infrastructure project and $115 million in tax giveaways when so many of our most vulnerable citizens’ needs remain unaddressed.”

State Sen. Wes Climer, a York Republican whose district would benefit from the project, defended the deal on the Senate floor. He conceded Harpootlian’s point that the Commerce Department’s economic impact projections were overly optimistic but said bringing the Panthers to Rock Hill would still be a huge boon for South Carolina.

“It’s probably not $3.8 billion,” Climer said of the deal’s economic impact. “But it’s still huge.”

Climer, a financial adviser, also spent time explaining how the tax incentives work.

The state won’t write the Panthers a check for $115 million. Instead, it will allow the team to keep its employees’ state income taxes, so long as it spends that money building the proposed complex in Rock Hill.

“We’re not giving money away,” Climer said. “It’s not the taxpayers’ money. It’s allowing the Panthers ... to get a temporary reduction of their taxes, and they have to use every penny to invest in their facilities.”

What’s next

Since the House’s version of the bill slightly differed from the Senate’s, three members from each chamber soon will meet starting next week to talk through those differences and settle on one final version. Once both the full House and Senate approve that version — likely when they return to Columbia on May 20 — the bill become law with Gov. McMaster’s signature.

Soon after that, the team expects to purchase up to 200 acres of Rock Hill land for the project. Team officials have so far declined to confirm which property in Rock Hill they have identified for the project.

However, a site map shared with The State shows the complex is planned for an area in Rock Hill just off I-77 between Dave Lyle Boulevard and Eden Terrace. The site map also shows the planned $40 million interchange to be built on I-77.

Over the last few weeks, the Panthers have amped up their goodwill campaign in South Carolina.

In April, coach Ron Rivera, Panthers players and mascot Sir Purr visited the State House, snagging photos with McMaster and his staff.

Star quarterback Cam Newton made a surprise visit to a Columbia park earlier this month.

The bill passed with the support of State House leaders such as House Speaker Jay Lucas, R-Darlington; House Majority Leader Simrill, R-York; Senate Finance Committee Chairman Hugh Leatherman, R-Florence; and Senate President Harvey Peeler, R-Cherokee.

Rock Hill Herald reporter John Marks contributed to this story.

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Avery G. Wilks is The State’s senior S.C. State House and politics reporter. He was named the 2018 S.C. Journalist of the Year by the South Carolina Press Association. He grew up in Chester, S.C., and graduated from the University of South Carolina’s top-ranked Honors College in 2015.
Maayan Schechter (My-yahn Schek-ter) covers the S.C. State House and politics for The State. She grew up in Atlanta, Ga. and graduated from the University of North Carolina-Asheville. She has previously worked at the Aiken Standard and the Greenville News.