Wednesday, April 23, 2014
Not many venture down this road. Brown felled trees — remnants of February’s ice storm — line the curvy stretch leading to a shuttered warehouse. The building stands in a graveyard of machinery, empty except for the occasional groundskeeper drop-by.
Inside, the building hums with electricity, but the domed lights overhead barely dent the darkness. Overturned chairs, pushed together desks, and walls lined with unfinished work serve as a reminder: no one works here anymore.
The 300,000 square-foot Patillo building on Cypress Gardens Road now houses all that is left of 100-plus-year-old firetruck maker American LaFrance, which closed in January.
“It’s just a nightmare,” County Supervisor Dan Davis told the Independent during an exclusive tour of the warehouse.
Davis wasn’t talking about the loss of 200 jobs — which devastated the community in its own right. Davis was talking about the fallout of the company’s closure and its large, outstanding debt to the county.
When American LaFrance shut down, it owed $650,000 to the county. In the years following its 2008 bankruptcy, company officials worked with the county, unable to pay toward its fee-in-lieu of tax deal offered for economic development. The unpaid fee was on its business personal property.
“They were hopefully working to get caught up. They just never could apparently,” Davis said.
Though the company was struggling prior, the Great Recession played a part in the death of American LaFrance. Shrinking emergency services’ budgets were likely a direct blow to the company.
“It absolutely had an impact on them,” Davis said.
Davis said, just last year, officials from Rio de Janeiro visited the facility as they prepared to contract a firetruck manufacturer for more than 100 vehicles in preparation for the 2016 Olympics. American LaFrance didn’t get the contract. If it had, Davis said, it might have been able to weather the Great Recession.
Since January, Berkeley County has embarked into uncharted territory: reclaiming the debt. It’s a first for a county in South Carolina, so there is no precedent.
“This is the first time it’s ever happened, so there may be ways to do better that we don’t know about because it’s never happened,” Davis said.
The amount owed to Berkeley County doesn’t stop with $650,000. The county has had to foot the $2,800 monthly lease for the space and more for its humming electricity. More public money has been spent on working with a number of attorneys to determine how to legally proceed. Most weeks, the county expends about 40 man-hours dedicated to American LaFrance and the fallout.
“It’s gotten to be an unbelievably complicated process,” Davis said.
It took 12 county employees a week to consolidate the company’s property to one facility. When the company closed, it was operating out of two locations, both off of Highway 52. The manufacturing location was inside the SeaFox building. Later, all of its unfinished work was moved to the Patillo building.
Berkeley County will auction off the business personal property later this year, likely in June. Already, the county contracted a private company to inventory what’s inside the warehouse.
The public funds used in the meantime will be added to American LaFrance’s debt — covered by money raised in the auction.
Berkeley County only has claim to the business personal property — desks, chairs, pictures, everything essential to making a business run. After an auction to reclaim the debt owed, the company’s inventory — the unfinished firetrucks, the engines, the transmissions, everything essential to making emergency vehicles — will likely be auctioned off by the property owner since American LaFrance has already defaulted and owes the owner money.
With the debt owed to public and private enterprises, no one seems able to raise an American LaFrance representative to pay the bills or collect the inventory.
“We don’t even know if there is anything left of the company,” Davis said.
As the county is pioneering the fallout, it is also reviewing its economic development policy.
“There may be some way to tidy it (fees-in-lieu of taxes) up so we don’t find ourselves in this situation again,” Davis said.
He added that state lawmakers will have to enact much of the change.
But fees-in-lieu of taxes for incoming companies will likely continue, Davis said.