American LaFrance leaves behind $650,000 debt to Berkeley County
MONCKS CORNER - When firetruck maker American LaFrance shut its doors last week, it left behind about $650,000 in debt to Berkeley County.
The company moved to Spring Grove Drive in Moncks Corner in August, according to its Facebook page. Before that, it was housed at Jedburg Commerce Park in Summerville.
In Jedburg, the company and landlord RT Jedburg Commerce Park had, since 2007, a fee-in-lieu of taxes agreement with the county. That allowed the vehicle manufacturer to pay a fixed fee on its equipment for 20 years instead of variable property taxes.
Local governments commonly use the agreements to attract employers to their areas.
Council's Finance Committee discussed the debt at a meeting in late October. The issue came before the full council Nov. 25, when RT Jedburg asked to terminate the fee-in-lieu agreement because American LaFrance had moved out of the Summerville building.
"Had that not happened, to this day, council probably would not know that they're delinquent on more than $600,000 in money owed to the county," said Councilman Tim Callanan, chairman of the Finance Committee. "I don't think it should have gotten to the point where we are three years into it before council was informed that they have been delinquent on the fee deal that we offered them."
According to a summary of the Nov. 25 council meeting, county attorney Nicole Ewing said the county doesn't have a program in place for dealing with late fee-in-lieu payments, though it has been discussed before.
Ewing said in November that the situation in Berkeley County is a "legal cluster" that could require filing a lawsuit against American LaFrance for breach of contract.
"We have never gone after a company for breach of contract," she said. "We have never gone after any entity for business personal property taxes."
At that same meeting, Supervisor Dan Davis said he wasn't aware of any efforts to collect the debt, estimated to be about $650,000, and that it was his understanding that the company's equipment would have to be seized. The money is owed to the county, the school district and other entities within the county.
American LaFrance has been in this situation before. It incurred a smaller bill related to a previous fee-in-lieu-of-tax agreement about six years ago, after it moved from Charleston County to Berkeley County.
As a result, Charleston County hit the company with a $317,313 bill in October 2007. American LaFrance paid the money in full, according to Charleston County's Economic Development Office.
Berkeley County Councilman Steve Davis said it was "a tragedy of justice to allow American LaFrance to just flaunt this unilateral breach of their responsibility ... as if nothing has occurred."
This week, Davis called the situation unfortunate.
"We were hopeful that they would overcome their financial difficulties and be able to stay in business," he said. "We thought they were in a better position, but as I understand it, they just could not overcome their financial situation."
He said county officials are still exploring what their next steps will be.
"We were working through it when they decided to close," he said. "That took us a little bit by surprise."
Calls to American LaFrance owner Patriarch Partners were not returned this week,
The firetruck maker had about 150 employees locally. It also closed sites in Ephrata, Pa., and Los Angeles last week.
Patriarch Partners issued a written statement about American LaFrance that said, in part: "Unfortunately, the company's unexpected current financial condition requires the discontinuation of operations in these locations at this time and these facilities are not expected to reopen."
On Tuesday, New York-based Patriarch Partners filed a document with the Berkeley County Register of Deeds that serves as an ownership claim to "all assets" American LaFrance has in its Moncks Corner factory.
Callanan said it may be too late to collect on the money.
"I don't know if the county can do anything now," he said. "If they are already closing shop and they're starting to move out their equipment, then anything that we would have to put a lien on is disappearing. I don't know at this point what the county can try to do to protect the taxpayers, and that's who is essentially getting robbed here. Basically, it's an entire neighborhood of property taxes that we lost because a ... company has yet to live up to its obligations."
John McDermott contributed to this report. Reach Brenda Rindge at 937-5713 or @brindge on Twitter.