The more things change....
It appears at this point that things have gone full circle. After changing hands a number of times and despite assorted promises and aspirations, the electric arc furnace at the mill has gone cold. Steel billets are being brought in by railroad and rolled into wire there at present, but that very costly, probably unprofitable and unsustainable use of part of a relatively small part of the overall mill property seems more of a ruse to evade zoning changes than a realistic, long-term and otherwise profitable business plan. While the new owners have applied for an air quality permit so that they could fire up the furnaces, that part of the plant has become so antiquated that it would take a major investment in refurbishment before the entire enterprise could be profitable once again. Even the present owners admit that. Meanwhile, they most certainly are subtracting the ever decreasing value of the mill as a deduction to reduce their overall tax liabilities. Whether they do the same on financial statements they give to potential lenders is a separate question. According to reports in major financial publications, the mill's parent company has sought the equivalent of bankruptcy protection in England. It is also reportedly under investigation by French authorities for misusing COVID stimulus money there. If history teaches us anything it is that oligarchs sometimes play fast and loose with numbers. Leona Helmsley, the "queen of mean" famously said that "only little people pay taxes" a few years before being sentenced to federal prison for tax evasion.
Be all of that as it may, during the course of the various ups and downs of mill ownership and operation over the past few years, the city council (1) had a study conducted by the Urban Planning Institute about potential future use of mill property and (2) voted to change the zoning classification of the 25 or so acres occupied by the mill in the center of town to accommodate the vision set out in that plan. It calls for "mixed use" of the property for residential, commercial and educational purposes. It is an excellent plan, but offers no guidance on how to pay for the purchase of the property, the cost of demolition of the existing mill or for the environmental cleanup that would have to predate any new construction. In the final analysis, this quite visionary plan can be fairly characterized as "pie-in-the-sky." It is nothing more than words on pages and lines drawn on paper that offers no practical guidance about how to accomplish its lofty goals. Doing that will require vision, ingenuity and hard work by the mayor and city council, among many others.
Regarding governmental authority here, there is no question but that local government possesses the power to regulate land use. It can zone or rezone any property within its borders so long as it follows specific and logical rules and laws that provide an opportunity for public input. In the case of the steel mill property, the city has carefully followed the law in making its zoning decisions, including giving clear notice that closure of plant operations for more than a year would result in a change in the zoning classification from "heavy industry" to "mixed use." The present owners purchased the property after this change went into effect. Those owners were represented by legal counsel. Those lawyers can read.
Having invested their money with eyes wide open, owners cannot be heard to complain that they have somehow been sandbagged or treated unfairly. They chose to tear down all of the structures on the half of the property between Wood and Dozier Streets from Front to the river and, by doing so, voluntarily abandoned heavy industrial use of that part of its property. Zoning has, without question, changed for that part of the property. They also chose to shut down mill furnaces in April of 2020, doing so because of "market conditions." In the process they abandoned the heavy industrial use of both the melt shop and the bag house -- the part of the property near the intersection of Front and Fraser. The can be no dispute about either of those facts. The company made these decisions voluntarily. Owners knew full well (or with the exercise of reasonable diligence by corporate attorneys should have known) what the local zoning law said. It can be safely presumed that each of these voluntary choices were made with the belief that each was in the best interests of the corporation. Adult life requires us all to accept and live with the consequences of our voluntary choices, not whine when things do not work out as we wishfully thought.
Under existing state law, this rezoning of the property does not constitute any "taking" of property from the mill that will require "just compensation." Ownership remains in the hands of the steel mill, Owners will be free to use the land for any purpose that conforms with the "mixed use" zoning classification. They can do that sell it to someone else. Existing law is clear on that point. Moreover, there would be no "taking" of the value of any equipment or the like -- furnaces, the giant vacuum cleaner on top of the melt shop or the big bag that is supposed to collect very toxic "electric arc furnace dust." At present there is no air quality permit allowing discharge of toxic "electric arc furnace dust" into the atmosphere for which proper public notice has been given. As presently existing, these facilities have proven themself to be so unprofitable and so antiquated as to have no value beyond scrap. Tax returns showing deductions for depreciation taken and financial statements to potential lenders stating alleged values of each would have to be produced during the course of "discovery" ;in any "takings" case. Comparison of those would be highly relevant as to claims of the value of that equipment and would be quite revealing when examined by experts and reviewed by a local jury. Meanwhile, it would take a major investment of tens of millions of dollars (an investment that was suggested when Liberty purchased the mill) to acquire the "best available technology" that should, according to federal law, be required before furnaces could be reignited.
Here's the rub: When it acquired the steel mill the present owners did so by way of a stock purchase rather than a simple real estate transaction. By acquiring the stock of its predecessor corporations, they purchased both assets (including any unexpired environmental air and water quality permits) and liabilities. As a practical matter what that means now is that it the present day owners are legally responsible for the cost of cleaning up the mess of their predecessors in interest, both the contamination of the land and that of the riverbed. Should the city ever get around to filing an application for assistance from the federal Environmental Protection Action from its Superfund, EPA would (a) do all the necessary testing to identify environmental problems, (b) develop a rational plan for cleaning up the mess, (c) recruit a local workforce to do so, (d) pay the enormous costs of cleanup and then (e) go after the present non-governmental owners of the land to collect the costs so the money can be redeposited in the Superfund to pay the costs of cleanup elsewhere. Liberty would do much better, at this point, to donate the land to the State of South Carolina, get a receipt and thank you note from the Governor that acknowledges its perhaps inflated value and walk away claiming an enormous tax deduction -- perhaps stretched over a number of years --in the process. Its accountants can do the math. Meanwhile, it could sell its office complex to the city for use as a new city hall and a beautifully shaded city park next to the baseball field. There's plenty of parking for public use at the site. The Governor, meanwhile, with a little vision and lending his name and a statue of himself to the project, could persuade others in state government to (a) combine the property with the adjacent idle land that owned by the Port's Authority, which, after clean;up by EPA, would get used in whole or part to construct a combined campus for USC, Clemson and Coastal Carolina's environmental programs that are presently located in and around town. But that's all "pie-in-the sky" too. Come to think of it, statues of the Governor, the mayor and members of city council all shaking hands at the entrance to it all would be nice. A lot better than photos in the rotunda at city hall.
The other part of the rub here is this: The city council is now faced with almost the same decision as its members were more than half of century ago. They must decide whether it is in the best interests of city residents to have a huge eyesore smack dab in the middle of town, and a very dirty one to boot. They can do that or dig in their heels and fight for a brighter future for Georgetown. If they do the former and let it continue to languish as that "dirty little mill down" halfway between Charleston and Myrtle Beach, nothing changes but no work is required. Their problem -- and that of Liberty Steel -- will be that the cost of transporting billets from Illinois to Georgetown to be stretched into wire will prove too costly and the 56 or so jobs mill owners and union bosses point to now as a reason to keep the ball in the air will vanish, disrupting, once again, the lives of those workers. Council members will look well, gullible and short-sighted.
Litigation is going to be expensive. Lawyers always are. Readers should contact their elected representatives and express opinions.
Tom Rubillo, Georgetown, SC
March, 2022
Decision time is here. Pray that our elected officials have the wisdom, courage and foresight to make proper choices. The future of your children is at stake.
