How Much is the Macy's Deal Worth?
Last week it was announced that Macy's would be building a $150 million distribution center in Berkeley County. Macy's negotiated with Berkeley County for a payment in lieu of taxes (PILOT) deal to entice the company to build in the county.
The PILOT deal calls for Macy's to pay $11.25 million over 15 years; Macy's would make no payments for the first 6 years, $1 million a year for the next 3 years, $1.25 million for the following 3 years, and $1.5 million a year for the final three years. Macy's must also meet certain employment goals during that time period.
So how much would Macy's have to pay in property taxes if there was no deal? Berkeley County's total property tax levy rate (including the state, county, and school rates, as well as bonds and excess levies) for business property in 2009 was $2.24 for every $100 in assessed value. The assessed value of a $150 million facility would be $90 million under state law. So Macy's would have had a total tax bill of $2.016 million in its first year. Of that, $9,000 would have gone to the state, $404,640 to Berkeley County, and $1.6 million to the Berkeley County School District.
Over 15 years, Macy's property taxes paid (if the property values and rate remained constant) would have totaled $30.2 million, about $19 million more than they will pay under the PILOT deal.
Of that $19 million, $84,777 would have been paid to the state, $3.8 million to Berkeley County, and $15 million to the Berkeley County School District.