Project: Carolina Factory Shops Infrastructure

1.0 Synopsis

Construction of this 1.3-mile access road replacing an existing rural road in Gaffney, S.C. began in 1996. The road was built to provide immediate access from Interstate 85 to the site of a planned major retail outlet center. Two of three planned phases of the mall have since been completed. The current facility is a 400,000 square foot complex of 72 stores, representing a total investment of $29 million. The mall has attracted additional development, including an entertainment complex, several hotels, and restaurants. Employment at these businesses attributable to the access road ranges from 564 to 872 jobs, depending on the season. The property tax revenues that have accrued to the town as a result of the access road equal approximately $1 million, including fees-in-lieu of taxes.

2.0 Background

2.1 Location & Transportation Connections

The town of Gaffney, South Carolina is part of Cherokee County, which is located in the northwestern part of the state, bordering North Carolina. The town (pop. 12,968 in 2000 Census) is situated along Interstate 85, which runs south through Atlanta, GA, terminating in Montgomery, AL; and north to Charlotte, NC, terminating in Petersburg, VA (where it intersects with Interstate 95). The closest cities to Gaffney are Spartanburg, SC (20 miles) and Charlotte, NC (60 miles). both of which have airports (Greenville-Spartanburg International and Charlotte-Douglas International (a regional hub)) that serve local residents Access to Columbia and Charleston, SC via Interstate 26 is available through Spartanburg where it intersects with Interstate 85.

2.2 Community Character & Project Context

Major industries in Gaffney include textiles manufacturing, food processing and fabricated metals manufacturing. The local area is also well known for growing peaches. Several distribution and warehousing facilities in Gaffney serve its major industries and markets made accessible by the highway and rail connections. The town has several highway exits with hotels, restaurants and retail establishments that serve travelers passing through. The interchange between Route 105 and I-85 (Exit 90) is adjacent to the access road.

In the years before and after the project (1995 to 2000) Cherokee County has grown slightly more in terms of population and employment compared to the state. It has increased 9% in population and 13% in employment, compared to 7% and 12% for South Carolina, respectively.

3.0 Project Description & Motives

Before the project, the area was served by a limited capacity ?farm-to-market? road providingaccess to peach orchards. The proposed location of an outlet mall on the road required a roadway upgrade and new infrastructure (including water and sewer).

The Appalachian Regional Commission (ARC) contributed $500,000 to construction of the access road as part of its Public Works program. The project did not receive state funding. The Cherokee County Chamber of Commerce and Local Development District recognized the economic development potential of the project and contributed just over $500,000 to the project. The total project cost was just over $1 million.

4.0 Project Impacts

4.1 Transportation Impacts

4.2 Demographic, Economic & Land Use Impacts

The area in the immediate vicinity of the access road was surrounded by peach orchards in the 1970's. However, improvements to the interchange with Interstate 85 in the 1980's attracted more highway-serving businesses to the area. From 1995 to 2000 (before and after construction of the access road), Cherokee County gained 3,000 jobs growing by 13%, compared to 12% job growth statewide.

The construction of the access road in 1996 allowed for development and expansion of the outlet mall, which has attracted other retail development, creating a shopping destination. The outlet mall opened in 1996 and completed its second phase of construction in 1998, with a total investment of $29 million. The complex comprises 400,000 square feet of space that houses 72 stores with 500 to 800 employees (depending on the season). The complex also pays fees-in-lieu of property taxes to the county. In 2009, this amounted to nearly $900,000.

This road serves the American Family Entertainment Center complex which includes a bowling alley, two arcades, a movie theater and sports bar. Built in 2007, this 60,000 square foot complex cost $6.8 million and currently employs 70 people. There is an Outback Steakhouse adjacent to the outlets, which opened several years ago and employs 60 people. Both businesses bought their parcels of land from Prime Outlets, which owns more parcels available for development. The complex and restaurant pay $400,000 and $40,000 in property taxes, respectively. The entertainment complex serves mostly local patrons while the Outback serves both locals and shoppers at the outlets. Therefore, the activity at the restaurant could be directly attributed to the outlets while those at the entertainment complex could not.

Several new chain restaurants draw shoppers and travelers, including Subway, Waffle House and Starbucks. There are also three hotels (Hampton Inn, Sleep Inn, and Red Roof Inn) located at or near the interchange that serve travelers along I-85 and customers of the outlets. Combined employment at these hotels is 35-40 people. However, hotel representatives attribute only 10-30% of their business to the outlets, an estimated impact of 4-12 jobs.

The additional development catalyzed by the outlets exceeded original expectations. The additional revenue generated by this development allowed the county to pay a school bond ahead of schedule. The development has also drawn more tourists to Gaffney and improved the quality of life for residents by offering them more dining and entertainment options. The impacts of the access road are concentrated in the immediate area surrounding the interchange.

The overall employment impact of the access road is in the range of 564 to 872 jobs.. The total property tax impact is approximately $1 million annually (based 2009 tax assessments and including fees-in-lieu of taxes).

5.0 Non-Transportation Factors

The location of the outlets was influenced by its proximity to the Interstate 85 corridor between Atlanta, GA and Charlotte, NC, a major travel route. According to a study done in 2000, the average visitor to the outlets traveled more than 60 miles. The entertainment center chose to locate near the outlet mall in part to capture visitors to Prime Outlets, but also because the mall developer made land available.

According to Prime Outlets, many communities discourage large retail developments due to potential adverse effects on the community such as traffic. However, Cherokee County and Gaffney welcomed the outlet complex and offered fees-in-lieu of property taxes and provided new infrastructure to serve the project.

6.0 Resources

6.1 Citations

?Evaluation of the Appalachian Regional Commission's Infrastructure and Public Works Program Projects?, June 2000, The Brandow Company and Economic Development Research Group.

6.2 Interviews

Organization

Footnotes