SC promised to spend $1.3B for Scout. The package got more expensive. Here’s why
Tucked inside Gov. Henry McMaster’s annual budget request is more money toward the state’s part of the Scout Motors project, even though lawmakers previously approved $1.3 billion for the project.
That’s because the South Carolina Department of Commerce expects the state’s portion of the Scout Motors project site to cost $150 million more than planned. That work includes the site preparation, road construction and environmental mitigation work associated with the Scout project.
McMaster in his executive budget proposal included $50 million to cover inflationary construction costs at the Scout Motors site in Blythewood. The money would go to the Department of Commerce and not the company.
“I know that the inflation has gone up so much on all things that Department of Commerce has spent the money that they have, and they need more,” McMaster told reporters Friday.
Whether and when Commerce will ask for an additional $100 million to cover the full cost of overruns remains unclear.
“S.C. Commerce remains in routine communication with both the governor’s office and the General Assembly about project updates including financial considerations and options,” Department of Commerce spokeswoman Alex Clark said in an email to The State.
But state leaders have been clear, Scout Motors itself is not asking for additional financial assistance from the state and the money requested by McMaster is not going to the automaker. Instead, it’s money the state is spending to fulfil its promise it made in 2023 to prepare the site.
“That is one of the most important projects we’ve ever had in this state,” McMaster told reporters Friday. “Needs to be done. We said, ‘we will get the site prepared.’ Costs went up. Contracting costs went up. We paid them. We agreed, we will get the site prepared.”
The Department of Commerce said without the additional $50 million requested by McMaster, the state agency would need permission to use money appropriated for recruitment of other projects to complete what it had promised Scout.
The $150 million in increased costs includes planned projects to permanently protect 5,000 acres of forested wetlands and floodplains in the COWASEE Basin, restore 18 miles of streams restoring natural water movement, replace nonnative trees with native trees, and create a new state forest. Mitigating the environmental damage made by the Scout development will cost $60 million alone.
“Our expectation is that the additional $150 million will allow us to meet the state’s obligation to provide a pad-ready site and supporting infrastructure,” Clark said in an email to The State. “By meeting these obligations now, we safeguard billions in private investment, enable the creation of thousands of stable, high-paying jobs and expand the long-term tax base that sustains schools, healthcare and infrastructure. This is not optional spending. It fulfills the commitments necessary to deliver the project the General Assembly approved.” McMaster said the additional ask is along the lines of the inflationary pressures felt by the S.C. Department of Transportation on its projects, pointing to how the widening I-26 between Charleston and Columbia and widening I-95 from the Georgia border to Point South have seen their price tags increase by more than $1 billion since 2022.
Scout is building a manufacturing plant in Blythewood. In 2023, the General Assembly approved a $1.3 billion incentive package, which includes building a railway bridge over Interstate 77 to the Blythewood industrial park site, building a new I-77 interchange to serve the eventual factory, additional road improvements, electrical work, and water and sewer infrastructure.
The first phase of improvements to Community Road, an onsite training center and a substantial amount of the mass grading at the site are expected to be completed in the first three months of this year. In the last quarter of the year, an onsite booster pump station is expected to be operation and the second phase of Community Road improvements are scheduled to be completed. By the middle of next year, the new interchange and surrounding roads should be completed as well.
The Department of Commerce has already completed the rail bridge.
Scout Motors also received $400 million for site construction as a part of the $1.3 billion package.
Affects of inflation also have increased costs for Scout, a company spokesman said.
Scout is not asking for any additional money from the state for its project, but its own investment into the Blythewood project has increased. What was a $2 billion project is increasing to a $3 billion, company officials told The State.
“Scout Motors appreciates the State of South Carolina’s continued commitment to completing the earthwork and site preparation in support of our project,” Scout spokesman Jamie Lovegrove said in a statement. “We remain focused on delivering our transformative investment of now more than $3 billion — a $1 billion increase over our initial announcement — in South Carolina, creating 4,000 good-paying jobs and driving $4.2 billion of annual economic impact to the state.”
