South Carolina Gov. Nikki Haley, right, looks pleased as Commerce Secretary Bobby Hitt talks about the Volvo plant.

 Georgia’s ‘aggressive’ Volvo pitch falls short

Gov. Nathan Deal and other top state officials were wondering what went wrong Monday after Volvo made official its pick of South Carolina for a new factory. They also held out hope — however slight — that environmental permitting might re-open recruiting of the company.

Deal said in an interview that the state will refocus on a “long list of economic development prospects” after Volvo announced it plans a factory near Charleston that will employ as many as 4,000 people. He tried to put a brave face on the loss for state business recruiters.

“We’re continuing to see significant growth,” he said, adding: “We’re not going to stop, we’re not going to slow down, and we’re not going to be deterred.”

But it was a frustrating end to an all-out effort by Georgia since January to land the automaker’s first U.S. plant. State leaders have badly wanted a bigger piece of the auto industry’s move into the Southeast, especially after losing Ford and GM plants in metro Atlanta.

Kia opened a plant in West Point in 2009. Other plant pitches have come up dry, though the state recently landed Mercedes’ U.S. headquarters and an expanded Porsche North American headquarters, and it has drawn many parts suppliers.

Georgia hoped to sell Volvo on a site about 30 miles west of Savannah and is believed to have offered an incentive package worth hundreds of millions of dollars. Officials would not release specifics on Monday, citing Volvo as an open recruitment prospect.

Chris Carr, the state economic development commissioner, termed it “aggressive.”

South Carolina’s package included grants, infrastructure and bonds valued at about $150 million, Allison Skipper, a spokeswoman for the South Carolina Department of Commerce, said in an email. An official in Berkeley County, where the plant will be located, said the county is providing $11.5 million in land acquisition and infrastructure costs.

The total value could climb much higher as the value of state tax credits and local property tax breaks were not immediately released.

“They haven’t told us any reasons for it,” Deal said when asked what Georgia could have done to land the plant. “But it’s pretty obvious that states like South Carolina have had more success with Chinese companies like Volvo than the state of Georgia has.”

Volvo is based in Sweden, but it’s parent is Chinese automaker Zhejiang Geely Holding.

Wetlands issue

State officials said there’s a chance, though faint, that the South Carolina proposal gets tied up in the regulatory process. The state and Volvo must clear a so-called 404 permit, referring to a section of the federal Clean Water Act, with the U.S. Army Corps of Engineers. The permit involves filling in and mitigating wetlands.

Chris Riley, Deal’s top aide, said the rival state’s permit would break new ground that could also help Georgia with its own pitches to redevelop wetlands in the future.

“It would be precedent-setting,” said Riley. “Georgia’s proposed spot was high and dry.”

South Carolina’s permit would fill more than 125 acres of wetlands and clear other forested areas in Berkeley County. Georgia’s Bryan County site also involved wetlands and the removal of about a dozen gopher tortoises that could have been threatened by the project.

South Carolina officials met with environmental groups before filing for wetlands permits to avoid long-term litigation, according to The State newspaper in Columbia. Skipper, the S.C. Commerce Department spokeswoman, said in an email that the planned Volvo site preparation is not unprecedented and that her state’s environmental mitigation efforts on past industrial projects have received praise.

Still, the sheer scope of the project could lead to complications, said Howard Marshall, a retired 30-year veteran of the Environmental Protection Agency and an expert in wetlands permitting.

“It’s a very big project and it should be evaluated very, very carefully by the state of South Carolina, the Army Corps of Engineers and environmental groups before it is allowed to be built,” Marshall said. “Filling wetlands of that size you can do great permanent damage and it should not be approved without a comprehensive review.”

Such a review could last months or stretch for years depending on the circumstances.

Looking ahead

Though missing out on Volvo could be seen as a loss, the effort could boost future recruitments, some say.

An extraordinary $40 million increase in the state’s so-called deal-closing grant programs during the most recent mid-year budget plan is still in the war chest and available for other big prospects.

And Georgia plans to build a $17.6 million training center approved this year by lawmakers on the site of a sprawling tract near Pooler, also outside Savannah, that was pitched for other mega-projects but was not for the Volvo plant. Deal said the facility was needed for Gulfstream, Mitsubishi and other plants in the area.

The future is unclear for the 1,900-acre property in Bryan County offered to the automaker.

Carr, the state’s economic development chief, said Georgia’s pitch built a framework for future ambitious projects. Four counties collaborated on the Bryan County proposal, which he said shows “cooperation doesn’t stop at the county line.”

“I’m disappointed in the outcome, but not in the effort,” Carr said. “It would have been a great project, but we have others in the works. People want to be in Georgia, and being a finalist proves that. I’m proud of what Georgia did in this short period of time.”

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