Council Action Requested:
Studio Displays, Inc. (“Studio Displays”) has a stand-alone SSRC Agreement with Lancaster County covering real and personal property at their project site located at 9081 Northfield Drive, Indian Land, SC 29707. The SSRC was approved by Lancaster County Ordinance 2021-1713.
An affiliate of Studio Displays, T&T Capital, LLC (“T&T Capital”), made a significant investment at the project site when T&T Capital purchased the real property and placed it into service in March of 2021 (approximately $5.6 million in investment). This $5.6 million constitutes a large portion of the overall investment to be made at the project and is the same amount as the overall investment commitment under the SSRC Agreement.
It appears that there was a belief and intent by Studio Displays that T&T Capital would be a party to the SSRC as T&T Capital was making the real property purchase, which is a large portion of the overall investment required by the SSRC.
Studio Displays and T&T Capital share common ownership and are closely affiliated. T&T’s Capital’s investment in the real property is a major component of the overall project and T&T Capital is requesting that its investment be included under the SSRC Agreement rather than having the real property be subject to ordinary ad valorem taxation.
To accomplish that end, T&T Capital is proposing amendment of the SSRC Agreement to include T&T Capital as a party with retroactive effect to 2021. This would enable T&T Capital’s investment to be made under the SSRC Agreement as Studio Displays and T&T Capital intended and desire, and would greatly assist Studio Displays as they are trying to grow their business in the County.
Points to Consider:
Whether to Amend the SSRC Agreement with Studio Displays to retroactively include T&T Capital as a party to the SSRC Agreement and to allow T&T Capital's investment in the project real property to be applied to the investment amounts required by the SSRC Agreement.
This first reading of Ordinance 2022-1836 is by title only. The proposed ordinance and proposed amended SSRC will be included in full upon second reading on November 28, 2022. The ordinance will be in similar form to Lancaster County Ordinance 2021-1713 which established and authorized the SSRC Agreement with Capital Displays but will include T&T Capital as a party to the SSRC Agreement.
Ordinance 2021-1713 establishing the SSRC Agreement with Capital Displays is included as an attachment to the agenda for reference and review. The existing SSRC Agreement dated March 22, 2022, between Lancaster County and Studio Displays, Inc. is included as an exhibit to Ordinance 2021-1713.
Funding and Liability Factors:
Inclusion of T&T Capital's real property investment in the SSRC Agreement will reduce the tax obligation and the tax revenue attributable to the real property. An amended tax notice will need to be issued to T&T Capital if the ordinance is approved and passed after third reading.
Applying the SSRC to T & T Capital and alleviating an ad valorem payment would reduce their payment to the County by approximately $77,000.
Recommendation:
The Department of Economic Development recommends that County Council approve the Ordinance amending the SSRC Agreement.