In 2017, Beaufort County re-established its economic development entity as the Beaufort County Economic Development Corporation (BCEDC), led by CEO John O’Toole. For the fiscal year 2023-24, municipalities within Beaufort County, including the City of Beaufort, allocated $535,000 of taxpayer money to fund the BCEDC’s operating budget plus the county allocated another $780,488 to the BCEDC’s Jobs and Worksite Fund. Of its annual operating budget, approximately $50,000 was paid by City of Beaufort taxpayers. Assuming similar payments since 2017, taxpayers have funded roughly $3.74 million to support the BCEDC operations, with the City of Beaufort contributing approximately $350,000.
In November 2022, the BCEDC proposed using taxpayer money to incentivize Magnus Development Partners, LLC, a Columbia, South Carolina-based developer, to build a 64,000-square-foot industrial building for manufacturing and warehouse uses. The BCEDC promised Magnus $250,000 in site improvement reimbursements and sought additional funding from the City of Beaufort and others to pave the road leading to the site. The BCEDC also agreed to cover up to $325,000 in Magnus’ annual operating expenses for five years if the warehouse remained unrentable. In total, the BCEDC committed nearly $2 million in incentives and payments to Magnus.
The City of Beaufort agreed to sell Magnus 8 acres of City Commerce Park land for $120,000. Instead of paying the full amount upfront, Magnus would pay $5,000 per year until selling the building to a third party, at which point the balance would be due. In total, Magnus received incentives totaling over $2.1 million to build a $5.1 million warehouse. Magnus then sold the warehouse for $7.5 million in September 2023, making a $2.4 million gross profit.
In his 2022 pitch to the city, John O’Toole claimed that the tenants of the Magnus warehouse would create 82 jobs within five years, with an average salary of $37,000. However, a city council member recently stated that $75,000 is the target salary for jobs that should be created in Beaufort. This is twice the salary level promised by the BCEDC.
When recently questioned about the number of jobs created in the Magnus building’s second year of occupancy, O’Toole did not provide an answer. He also promised that tenants would invest over $16 million in property, plant, and equipment by year five. Again, when asked about the actual investment made by the second year of occupancy, O’Toole did not provide an answer.
The following points are clear:
– The City of Beaufort purchased the City Commerce Park in 2012, and only 11 acres have been sold in nearly 12 years, generating approximately $165,000 in income.
– The purchase price for the total acreage, plus additional infrastructure and maintenance costs, has amounted to over $3 million—approximately one-third of the city’s total property tax levy. This equates to a 0.45% annual return to taxpayers.
– The city is believed to have paid the BCEDC $350,000 in taxpayer money, a portion of the total $3.74 million taxpayer cost to fund the BCEDC’s operating budget.
– Over $2 million in incentives were allocated to Magnus Development Partners, LLC, allowing Magnus to make a $2.4 million gross profit.
– It remains unclear how many of the promised 82 jobs have been created in the Magnus building. Recent pictures during working hours showed only a handful of cars in the parking lot.
– Despite these issues, the City of Beaufort and the BCEDC have signed another warehouse building deal with Dolnick Properties LLC, a local speculative developer. Dolnick describes itself as “a boutique commercial brokerage located in southern Beaufort County” and is owned by Tim Dolnick, a commercial developer by trade.
The City of Beaufort and the BCEDC will provide Dolnick with nearly $2 million in incentives to build a 72,000-square-foot warehouse. Dolnick is likely to seek a profit similar to the $2.4 million made by Magnus. The target salary level to fill the Dolnick building will likely be $37,000, again half of what a city council member says should be targeted.
Finally, it’s understood that Beaufort County Council has approved a four-fold increase in the BCEDC’s annual Jobs and Worksite Fund, raising it to 1.3 mils or $3.5 million per year. This amounts to $17.5 million over the next five years. Armed with this fresh taxpayer money, the BCEDC is eyeing the purchase of 500 acres in Yemassee, as well as potentially 200 acres in Lobeco and 300 acres in Whale Branch creating more competition for the already struggling Beaufort Commerce Park and for private commerce park developers as they could never afford to offer multi-million dollar incentives such as what the BCEDC offers for the building of generic warehouses.
