SCANA leaves town and a good deal
By John Temple Ligon
Temple@TheColumbiaStar.com

SCANA's current headquarters at the Palmetto Center on Main Street

Columbia Mayor Coble's 1990 Corporate Citizen of the Year, SCANA, almost saw a statue of its CEO Lawrence Gressette go up in bronze on the town square between Carolina First and the Columbia Museum of Art. SCANA had such a strong downtown presence the town leaders were pushing to memorialize SCANA's chief executive. Maybe the failure of follow-through on the statue project for the museum's opening was a portent, a sign of things to come. Last week, SCANA announced plans to leave downtown entirely.

Twenty-two years ago, SCANA and its huge headquarters contingent moved into Palmetto Center in the 1400 block of Main Street. A few years before, Mayor Kirkman Finlay made the rounds among SCANA chiefs and Columbia decision makers with a great idea to consolidate SCANA employees downtown. Finlay's pitch to SCANA disclosed a property tax advantage.

He suggested SCANA leave its company-owned buildings. SCANA could drop its 10.5% utility property tax assessment. SCANA could move into a building in the 1400 block of Main Street where a straw-man developer would offer an attractive 25-year master lease based on a 6% property tax assessment paid by the landlord.

Among SCANA's company-owned buildings were 1225 Laurel and its headquarters on lower Main near Whaley. Both SCANA buildings, as it turned out, left the tax rolls entirely as one went with the city and the other with the university.

At SCANA's proposed Main Street location about 25 years ago, thriving mom- and-pop businesses were told they had to leave. They were threatened with condemnation to make way for the SCANA headquarters and the Marriott Hotel. The hotel's lobby and banquet/ ballroom facilities were to stay in city hands, which made eminent domain legitimate. Also, the land was taken off the tax rolls for the long term. The Marriott public spaces were called the Columbia Convention Center.

Back then as now, if SCANA could snare an attractive lease, SCANA could pass the favorable economics through its books to the electricity rate-payer and the natural gas customer. The rent SCANA paid its straw-man developer, Binswanger of Philadelphia, was carried in SCANA's books as "electric plant-in-service," the same repository of overhead as the Columbia bus system until the 2002 transfer.

Each year, SCANA lawyers and lobbyists come to terms with the South Carolina Public Service Commission and agree on a targeted return on common equity. The idea is to hold high the value of a share of SCANA stock so the company can borrow for its operations at low rates. Hold high the stock and hold low the cost of borrowing, thereby holding down the rates on electricity and natural gas.

The scheme of regulated and protected shareholder-owned utilities has served the country well, until now. The country is going through deregulation, one state at a time. When South Carolina deregulates its utilities, SCANA will have to tough it out in competition with Duke, Progress, Southern, and others for the South Carolina retail market. Inexpensive offices will be a must.

Until then, and it could be another decade at the current effective rate of lobbying against retail deregulation, SCANA owes its shareholders good returns in both annual dividends and gains in value. One way to gain value at SCANA is to guarantee its monopoly franchise with the City of Columbia. A 30-year extension of SCANA's monopoly franchise in Columbia was put into the bus-transfer negotiations before the final deal was cut in 2002.

Now that SCANA is leaving the 1400 block of Main Street, maybe the taxes will rise on the property. In 1997, a tax map of the property labeled the land under SCANA's offices "unimproved." Never mind the 6% assessment. It appeared SCANA's property paid no taxes. Calls and written inquiries since 1997 to the Richland County Tax Assessor and to the building's owner, Main Street Associates in New York City, by several downtown property owners never concluded with an official tax rate or a dollar-amount tax take. No one could find out what taxes were actually paid.