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Port of Charleston key factor in SC landing Gallo's East Coast distribution site

Gallo winery

The E&J Gallo winery will export domestic wines and import wines and spirits from more than a dozen countries through the Port of Charleston. E&J Gallo/Provided

An incentive deal that lured the E&J Gallo Winery to Chester County also includes money from the State Ports Authority that will steer the winemaker's business to the Port of Charleston instead of its top competitor in Savannah.

The SPA's board of directors on June 22 approved spending $500,000 on public infrastructure, such as roads or water lines, at the 600-acre East Coast production and distribution site in Fort Lawn that's expected to employ 500 workers over the next eight years.

Jim Newsome, the maritime agency's president and CEO, said Gallo narrowed its choices to locations in South Carolina and Georgia, with Charleston's port a key factor in the final decision.

"It was a very competitive project that was dependent on port infrastructure," Newsome said. "They are going to be a significant port user. We were competing against an adjacent state and were successful in that competition."

California-based Gallo sells more than 130 brands of wine and spirits in more than 100 countries. The company exports its California wines and imports wines from Argentina, Chile, France, Germany, Italy, New Zealand, South Africa and Spain. Gallo also imports spirits from Australia, the Caribbean, Italy, Mexico, the United Kingdom and Venezuela.

In addition to the SPA money, the incentive package to land Gallo included: a $16 million infrastructure grant to the county from a South Carolina economic development fund that targets rural areas; $8 million in state bonds to offset environmental mitigation expenses; tax credits tied to the number of jobs Gallo creates; and 50 years worth of property tax breaks that lowers the company's rate to 4 percent from 10.5 percent.

The private sector also chipped in: Duke Energy, which serves that area of the state, is also providing a utility tax credit grant.

In addition to Gallo's import and export business, Newsome said, the deal provides an opportunity for Charleston's port to capture other types of cargo.

"This one was worthwhile because, in addition to the quality of the company itself, there's a significant back haul arrangement that's possible here — there are some forest product exporters in that area where we could round-trip containers," he said.

Construction of the first phase of the $423 million distribution center is scheduled for completion in October 2022.  

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In addition to all the public and private financial incentives, lawmakers changed state liquor laws to reel in Gallo, a.k.a. Project Magma.

Trinity Capital Advisors

A rendering shows the first of four speculative warehouses Trinity Capital Advisors plans to built at Palmetto Commerce Park in North Charleston. Trinity Capital Advisors/Provided

Spec surge

More speculative industrial construction is on the way at Palmetto Commerce Park in North Charleston — part of more than 10 million square feet of warehouses and distribution centers being built without tenants on the line.

Charlotte-based Trinity Capital Advisors is moving ahead with plans to construct four buildings at the property's Trademark East development.

Construction has started on the first building, an 850,000-square-foot structure to be completed in 2022. The cross-docked structure — which means goods come in on one side and leave on the other — is the project's largest. Charleston-based Frampton Construction filed a notice of commencement, meaning it is ready to start building, for the first structure, on June 24 with the Charleston County Register of Deeds.

The second and third buildings will total 174,720 square feet each. The fourth building will be 145,600 square feet.

"Interest in both Charleston and the port area is showing no signs of slowing, and there’s a notable lack of industrial supply," said Lee Allen, managing director at commercial real estate firm JLL, which is marketing the project.

Massie Flippin, partner at Trinity Capital, said the company is "accelerating our development plans" and expects the project's location and access to the Port of Charleston "will drive significant demand from a diverse range of manufacturers and distribution companies."

There has been a surge in speculative industrial development in the Charleston area due to an increasing number of retailers importing goods through the port and looking for nearby sites to sort and distribute cargo to brick-and-mortar stores and customers.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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