South Carolina city plans independent economic development agency

Local officials in Greenville, South Carolina, are moving forward with plans to establish the city’s first economic development agency.

The Greenville City Council voted unanimously this month to shutter existing development efforts managed by an arm of local government in favor of an independent agency being built from scratch by lawmakers hoping to expand private investments in key sectors of its economy.

The “trailblazing effort” would see the city of 72,000 an hour north of state capital Columbia establish a 501(c)3 nonprofit for economic development, similar to the format of government-backed agencies often used by larger cities, like New York, Boston, and Raleigh, North Carolina, to concentrate and focus efforts to spur growth across industries, Greenville City Council member John DeWorken said.

“The whole point of this organization is to go out and get life signs from entrepreneurs and innovators,” DeWorken said. “Not only does that put us in a better position to attract and create, but also to say, what do we want our city to look like? What are we going to go after?”

The new Greenville City Economic Development Corporation features several major changes from efforts managed until now by the Greenville Economic Development Department. That includes the creation of an independent executive board with the ability to set competitive salaries for key positions.

An independent agency can offer wages that outstrip government salaries capped under Greenville’s laws, DeWorken said, opening up access to a much wider talent pool that can be flexibly managed and adjusted to the ebbs and flows of markets over the long term.

“We’re able to pivot so that we can make sure what industries might make a good fit,” he said. “We can bring in expertise on a wide array of different potential industries.”

Officials are working to fill roles pertaining to the development of real estate, small businesses, restaurants, retail, and minority-owned businesses, among others. An investor relations chief will also be hired and tasked with “seeking out” private dollars to complement local funds.

DeWorken said the city will continue to be the primary investor in its own economic development, but private backers will play an increasingly important role under the new organization, “similar to other economic development groups,” with a hierarchy of “people who are experts in each field dedicated to each one.”

“How we’re going to do that, of course is with public funding from the city appropriations, but now we’ll also be able to supplement those expenses with private investment,” he added.

Like the government department it’s replacing, the GCEDC will tap grants and other funds made available through the South Carolina Department of Commerce, the state-level economic development agency, as well as the Greenville Area Development Corporation, a county EDA.

The city already has a strong reputation for economic development, landing major operations of multinational firms and revitalizing its downtown to make it more attractive to prospective new residents.

The new independent agency would add to existing programs that have been “outstanding” at attracting advanced industrial manufacturers, like Michelin, BMW and Bosch, to the area, DeWorken said.

But the existing setup is lacking in the ability to truly localize development; the addition of potential city incentives for tax or land use through the new organization helps direct long term efforts while “sweetening the pot” for investors, DeWorken said.

“Those relationships are the most important,” he added. “There are incentives at different levels that we can tap into.”

Greenville would also “not be afraid,” DeWorken said, to bond in support of any efforts and could lean on strong reserves boosted by a required allocation rate increase from 15% of the general budget to 20% during the pandemic, and solid ratings from bond rating agencies.

The city’s general obligation bonds are rated triple-A by Fitch Ratings, Moody’s Investors Service and S&P Global Ratings, according to the city’s reporting on the Municipal Securities Rulemaking Board’s EMMA bond disclosure website.

Fitch said the rating reflected “solid revenue growth from diverse revenue sources” as well as “healthy fund balances from a history of strong operating performance add further to financial flexibility above what Fitch considers necessary for the rating category based on the city’s superior inherent budget flexibility.” Liabilities are low.

Greenville had the benefit of “serving as a regional retail and commercial hub, driven by its strategic location in upstate South Carolina,” according to Fitch.

“Greenville, South Carolina, was originally a trading post and economic development really was at the beginnings,” DeWorken said. “We’ve fostered this over the decades for sure and so this is just a next logical step for us.”

The city of 72,000 is the anchor of the Upstate region of South Carolina, and the seat of Greenville County, with more than 530,000 residents.