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Topic Title: HSBC Mortgage Services Moves To South Carolina
Thu Aug 04, 2005 6:47 pm
HSBC gets break on future taxes
By Jonathan Allen Fort Mill Times
(Published July 21‚ 2005)
INDIAN LAND -- HSBC Mortgage Services broke ground on its new corporate headquarters in the Edgewater Business park on Hwy. 521 in Indian Land, and South Carolina and Lancaster County are hoping to make the company's move from Charlotte as painless for HSBC as possible.
The South Carolina department of commerce offered HSBC multiple performance-based tax credits, according to Eric Miller of the state commerce department.
HSBC will get jobs tax credits, which can effectively cut the corporate income tax rate from 5 percent to 2.5 percent. Jobs tax credits are available to any company that makes an investment of at least $50,000 in the state and creates 10 jobs, Miller said.
The company will also get a corporate headquarters tax credit from the state. The corporate headquarters tax credit on top of the jobs tax credit could totally wipe out the company's corporate income tax, according to Keith Tunnell, president of the Lancaster County Economic Development Corp.
Because HSBC plans to create 450 jobs in Indian Land over the next six years, the company also qualifies for a jobs development tax credit, which is a rebate of payroll taxes worth $15 million over the next 10 years.
The Department of Commerce also put $1.2 million in a "set aside" fund for infrastructure improvements, Miller said.
Lancaster County also rolled out the red carpet for HSBC. Instead of paying regular commercial property taxes, the company will pay a fee in lieu of taxes that works out to $322,430 in 2007, $309,854 in 2008, $297,278 in 2009, $284,702 in 2010 and $278,414 every year after 2011, according to the incentive agreement.
And during the first year of the agreement, HSBC pays the fee the county will give it a 95 percent rebate on the fee to use for infrastructure upgrades along Hwy. 521, Hwy. 160 East and Possum Hollow Road, Tunnell said. In the second year, HSBC will get a 65 percent rebate on the fee.
Tunnell said the South Carolina Department of Transportation has also agreed to begin part of its road widening project on Hwy. 160 East from Hwy. 521 to Possum Hollow Road.
County officials and HSBC spokesmen said the incentive package was key to retaining the HSBC Mortgage headquarters in the Charlotte region, and some hoped the project would become a model for other large development projects across the nation.
Gov. Mark Sanford, who was on hand for the ceremony, said bringing 450 jobs to South Carolina was reason to celebrate.
Group Executive for HSBC, J.C. Faulkner, said the average salary for the jobs his company is bringing is $60,000.
Rahsaan Johnson, public affairs manager for HSBC, said the company will have an economic impact of hundreds of millions of dollars on the region over the next six years. And he said if the company doesn't maintain the minimum criteria for the tax incentives, those incentives will dry up.
HSBC and Lauth Property Group, the Edgewater developer, decided not to spend a lot of money on commemorative shovels for their groundbreaking ceremony.
Instead, they opted for plastic shovels and a box of sand. According to Flint McNaughton, Lauth Project Manager, the companies took the $5,000 they would have spent on the ceremony and decided to give it to the Lancaster Children's Home.
McNaughton presented the check to a representative from the children's home during the ceremony.
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