RIDGEWAY — An economic resurgence plan that U.S. Sen. Tim Scott helped get into the GOP tax cut could help dozens of poor and burgeoning communities around South Carolina.
It began to take shape Friday, as Gov. Henry McMaster submitted a list of 135 distressed areas from around the state to the U.S. Treasury Department. These areas will be eligible for tax incentives designed to encourage companies and developers to create businesses and affordable housing.
The "Opportunity Zone" program also encourages investors to keep their businesses in these communities, offering more incentives the longer they stay.
The sites represent a mix of poorer rural areas across the state and, in some cases, prime business real estate.
Included in the listing are properties around the Volvo plant/Interstate 26 corridor outside Charleston, and the abandoned nuclear plant site in Fairfield County.
"What Sen. Scott has done will be transformative for the state of South Carolina," McMaster said Friday in Fairfield County, where last year's cancellation of the multibillion-dollar V.C. Summer nuclear project led to the loss of more than 5,000 jobs.
Businesses that provide job opportunities in these areas would receive a deferment of capital gains taxes for up to seven years.
Of South Carolina's 1,097 census tracts, 538 were designated by Treasury as eligible for the Opportunity Zone status, under the new program.
States may select 25 percent of eligible communities for the program, leading to South Carolina's narrowed list of 135 areas from all over the state.
Each of the state's 46 counties has at least one proposed Opportunity Zone.
After a vote late Thursday on a $1.3 trillion spending bill in the Senate, Scott was unable to attend Friday's news conference, but he described the announcement as "exciting news" for the state.
"This means tens of thousands of folks across every one of our counties will see a brighter future due to a stronger local economy, a surge in job growth, and the potential revitalization of entire neighborhoods," Scott said.
While some zones are in the poorest parts of the state, others cover communities already on the rise.
South Carolina Commerce Secretary Bobby Hitt explained that's because the incentives can be used both to help poor communities and to give an extra boost to those already seeing new development in recent years.
"We're in every county where our local officials say we've got the infrastructure and we've got the other pieces in place to be successful," Hitt said. "There's no point in putting a tract in where no one's going to go."
Kendra Stewart, director of the College of Charleston's Joseph P. Riley Center for Livable Communities, said the new initiative could be a very positive thing.
"We are a state that has traditionally been so concerned about spending, there are few incentives provided by the state for lifting up the lower-income communities," she said. "We tend to focus all of our efforts on economic development and bringing in major corporations."
U.S. Rep. Jim Clyburn, the state's only Democrat in Congress and whose district potentially could see benefits in poorer isolated areas, said he was hopeful but still had concerns, saying, "Politicians should not pick winners and losers among communities."
He favored his plan that would target "scarce federal resources to all qualifying persistent poverty communities without a political selection process.”
Joseph Von Nessen, research economist at the University of South Carolina, said that once the program kicks in, there still will be a number of hurdles. Business recruitment must be launched by trying to make distressed and low income locations attractive for brick and mortar investment. But so must job training for the populations who live there and would become the targeted workforce.
"It's not going to happen overnight," he said. "This is a long-term process."
The measuring stick of success will come later, based on salaries and drops in unemployment, he added.
In some areas, such as Hilton Head Island, new businesses have created a lot of jobs but there isn't enough affordable housing nearby for the new workers. The incentives could encourage developers to build it.
“In the Charleston area, creating more affordable housing is a major issue at the top of everyone’s list of problems that need to be solved," Stewart said. "If it makes progress on that front, that would be a positive thing.”
In Myrtle Beach, one of the two selected opportunity zones includes the downtown block where the city had planned to build a library and children's museum.
The project, announced early last year, has been controversial, and its scope has changed since three new City Council members and a new mayor were elected last fall. City officials now say they're hoping to create an arts district around the proposed complex.
City Manager John Pedersen said the new opportunity zone means there is now "a great opportunity to surround those (public) investments with some private investment."
The selected sites in Myrtle Beach include large swaths of city's center, between 3rd Avenue South and 21st Avenue North. Inside that area are several economically depressed neighborhoods, including the historic Withers Swash area and the Booker T. Washington community, which was traditionally segregated.
Booker T. Washington was once home to black-owned nightclubs that hosted the likes of Ella Fitzgerald and Little Richard. Now, few businesses remain there.
"It truly is an opportunity for people to re-invest in their community," Myrtle Beach Mayor Brenda Bethune said.
Chloe Johnson, Schuyler Kropf and Robert Behre contributed to this report.