Whats ahead in business for Charleston region in 2013
Less than a week into 2013, there’s already a stack of interesting business developments in the pipeline for the Charleston region. Here are some of the top deals and doings that will be making headlines and worth following in the year ahead.
Despite the deal Congress struck last week to walk the nation back from the so-called fiscal cliff, defense spending cuts are coming in the near future. How much they affect North Charleston’s high-tech Space and Naval Warfare Systems Center Atlantic, its contractors and other defense businesses in the Lowcountry is a key question for 2013.
While South Carolina politicians have sounded the alarm about the cuts, SPAWAR officials and executives at local defense contracting offices seem less concerned, mainly because their focus is on growth sectors such as software and high-tech electronics and not on downsizing targets like shipbuilding.
“We feel pretty optimistic, but like everybody, we’ll have to work through this,” Chris Miller, executive director of SPAWAR’s Atlantic division, said over the summer. “I don’t want anybody to think the bottom is falling out.”
Thousands of government and industry jobs hang in the balance. SPAWAR alone has 2,500 government employees in Charleston and an estimated 8,000 contractors.
After delivering its first few 787 Dreamliners in 2012, Boeing South Carolina’s primary goal this year will be to climb to cruising altitude by increasing its jet production rate.
And not just by a little. The North Charleston final assembly plant is making about one plane per month now, and the plan is to be cranking out more than three per month by the end of 2013.
Over the same period, the company’s neighboring aft- and midbody 787 factories must double their rate from five fuselage pieces per month now to 10.
Other major variables for Boeing in 2013 include: delivering 787s at a more consistent pace; closing on the 320 acres the Charleston County Aviation Authority recently agreed to sell the company; and seeing whether the machinists union can muster enough support at the local plant to stage an election.
After a robust turnaround last year, local real estate experts predict modest growth in home sales and property values in 2013.
Near-record low mortgage rates, an improving job market and the overall drop in home prices in recent years is expected to continue bringing buyers to the closing table, resulting in lower inventories and more new development. The preliminary sales numbers for December and all of last year are due out this week.
It will be easier in 2013 for leisure and business travelers to fly between Charleston and two key destinations: New York and Boston.
Come Feb. 28, JetBlue Airways will begin offering three daily flights to those cities, opening the Charleston market to more international domestic connections and domestic service within the heavily populated Northeast corridor.
The arrival of the low-cost carrier could help bring flight costs down on those routes. Rates fell after Southwest Airlines started service to four cities in 2011. Also, the visitor industry is hoping that JetBlue will help the region attract more conventions and meetings from businesses based in the Big Apple and Beantown.
Barring some disaster, economic or natural, the local tourism business should continue to shine in 2013, which is more welcome news for area hotels, restaurants, retailers and a raft of other industries that cater to visitors.
Orbitz was the latest to weigh in. The travel website last week identified the Holy City as one of its hottest destinations for 2013, citing the new air service from JetBlue and the fact that Charleston recently was named both the “Top U.S. City” and the “Top Destination in the World” by readers of Conde Nast Traveler magazine. “With a trophy shelf stocked with recent travel awards, Charleston is a must-visit in 2013,” Orbitz said.
Customers of Santee Cooper and South Carolina Electric & Gas Co., which serve customers in the Charleston area, will see higher bills in 2013.
Both raised electric rates in December, in part to pay for ongoing construction costs of the $10 billion addition of two new nuclear units at their V.C. Summer Nuclear Station.
Rates for Moncks Corner-based Santee Cooper’s 166,000 customers in eastern South Carolina went up an average 3.5 percent last month, or $5.60 per month per 1,000 kilowatts used. They will go up again an average 3.5 percent (or $8.29 a month) on Dec. 1 of this year.
SCE&G’s 669,000 electric customers, roughly half of them in the Charleston area, will see rates rise in this month’s bills after the regulators approved another in a long string of rate hikes for the utility. For residential users, bills are going up $2.59, or 1.8 percent, this month per 1,000 kilowatts. The latest rate hike is the 12th in five years for SCE&G customers.
A notable project for the State Ports Authority will unfold more than 200 miles from Charleston Harbor.
Set for a September opening, the SPA’s Upstate inland port in Greer will allow containers to be transferred between trucks and Norfolk Southern trains heading to Charleston’s waterfront. The 30-acre facility is being designed to serve clients such as the BMW car manufacturing plant, a major export customer for the SPA.
Also look for the agency to focus largely on growing export cargo from places such as the Midwest, as well as bringing additional Asian container services.
And while the SPA has all the approvals it needs to begin work on a $35 million cruise terminal at the north end of Union Pier, opponents are seeking a review of a permit issued last month by the S.C. Department of Health and Environmental Control.
Following a number of Charleston technology office makeovers in 2012, the scene will feature a few more new spaces in 2013.
PeopleMatter, a human resources software company, expects to open its new King Street headquarters in the first quarter of the year, which is around the same time The InterTech Group-owned composites manufacturer TIGHITCO hopes to start operations at its new factory on Palmetto Commerce Parkway.
Daniel Island-based software company SPARC plans to expand its headquarters on Clements Ferry Road over the course of 2013.
Along the Cooper River, construction of Clemson’s wind turbine drive-train testing facility, the largest of its kind in the world, is coming along. The 7.5-megawatt test rig was to be operational by the end of 2012 and the 15-megawatt rig was to follow in the spring, but “the timeline has shifted by about a quarter,” a spokesman said.
Then there’s the completion of Google’s second data center building off U.S. Highway 52 between Goose Creek and Moncks Corner, the biggest of several such facilities to be built in the region recently. Company representatives had said it would open in 2012, but the latest word is “full deployment will happen sometime this year.”
Charleston International and many other airports around the country could lose a carrier to consolidation this year. Many industry experts believe a merger will be the end game for American Airlines, which is looking to pair up with US Airways.
Locally, the impact of a marriage between the two companies probably wouldn’t be too significant because they have no direct overlap. American, which is emerging from bankruptcy protection, offers five daily flights to Miami and Dallas-Fort Worth from Charleston through its American Eagle unit.
US Airways is one of the airport’s biggest carriers with 17 daily flights to and from Charlotte, Philadelphia and the Washington, D.C., area.
Spreading its wings
Also, one event at Charleston International Airport will end this year while another will take flight.
The Air Force, which owns the runways at jointly used Charleston International, will complete the total makeover of the main 9,000-foot runway later this year at an estimated cost of about $50 million. Test flights will start in late May, and regular takeoffs are set for July 1.
With just one runway for the airport and Air Force to use until at least mid-year, officials say the work, which started last summer, will have minimal interference with air traffic.
Going on at the same time will be the airport terminal’s $200 million redevelopment and expansion, which will start in earnest during 2013 and carry over throughout much of 2014 and possibly later.