Project: Interstate 26

1.0 Synopsis

Finished in 1969, Interstate 26 (I-26) is a key transportation route in South Carolina that connects the three major urban areas of the state: Greenville/Spartanburg, Columbia, and Charleston. In the years since its completion, a number of manufacturing businesses have been drawn to the I-26 corridor, particularly for its direct access to the Port of Charleston. The interstate attracted up to 51,000 new jobs to the corridor between 1969 and 2002. A lack of utility infrastructure (including water, sewer, and electricity) has restricted development along the interstate in many places. Other interstates in South Carolina, some of which have better utility infrastructure, have attracted more development to their immediate vicinities.

2.0 Background

2.1 Location & Transportation Connections

I-26 was the second interstate highway to be completed in South Carolina, after Interstate 85. I-26, considered a major transportation artery for the state, is one of five primary interstates in South Carolina. The others are I-20 (connecting South Carolina to western Texas), I-85 (connecting Alabama to Virginia), I-77 (connecting Columbia, SC to Cleveland, OH), and I-95 (connecting Florida to Maine). I-26 connects directly with all of the aforementioned highways.

I-26 is an east-west highway, connecting South Carolina, North Carolina, and Tennessee. Within South Carolina, the highway spans 221 miles, bisecting the state and stretching from the North Carolina state border to the Port of Charleston. It passes through 10 counties in South Carolina: Spartanburg, Laurens, Newberry, Richland, Lexington, Calhoun, Orangeburg, Dorchester, Berkeley, and Charleston. Major cities along the route are Charleston, Columbia, and Spartanburg.

2.2 Community Character & Project Context

The I-26 corridor includes the three major urban areas of South Carolina. Charleston, the second largest urban area in the state, is home to one of the nation's leading container ports and to heavy industry associated with the port. Charleston also has a thriving tourist industry due to its historic downtown, nearby plantations, and Fort Sumnter. I-26 is crucial to this industry since most of the millions of visitors arrive by car. The Charleston metropolitan area had a total population of 630,000 in 2007.

Columbia, the state capital, is the largest city in South Carolina. The Columbia metropolitan area had a 2007 population of 713,000. With its central location between the state's major population centers and access provided by I-26 (which forms an outer loop around the city ), along with I-20 and I-77, Columbia has become a transportation hub and primary distribution center for companies such as Michelin, Honeywell, and Bose Corporation.

The Spartanburg metropolitan area, with an estimated population of 276,000 in 2007, is part of the Upstate region, the historical manufacturing center of the state. The textile industry drove the economy in the Spartanburg region for nearly a century, but has declined in recent decades. Since the early 1990's, Spartanburg has recruited more than 40 international companies that have established operations surrounding I-85 and I-26, with automotive manufacturing becoming a dominant industry in the region.

The corridor also includes the predominantly rural areas of Newberry/Clinton and Orangeburg. Forestry is an important industry in the area of Newberry and Clinton, situated between Spartanburg and Columbia. Orangeburg County, situated between Columbia and Charleston, is an important center of agricultural production and has a particularly high unemployment rate. In 2008, unemployment in Orangeburg County was 11% compared to 7% across the state of South Carolina.

Thirty-nine percent of the state's population, or nearly 1.7 million people, live in the 10 counties of the I-26 corridor in South Carolina. Population growth was relatively high in the corridor immediately after completion of the I-26. In the twenty years after the construction of the interstate (1969-1989), population grew by an average 1.7% per year, while the state as a whole grew by 1.4%. Other parts of the state have subsequently grown more rapidly. Population growth in the corridor from 1989-2002 averaged 1.2% per year compared to 1.4% in the rest of the state.

Total full-time and part-time employment grew faster in the I-26 corridor than in the state and nation in all time periods since the highway's completion. The growth rate for total non-farm employment was highest in the decade after the highway's completion, but decreased in the 1980's and 1990's.

3.0 Project Description & Motives

Construction of I-26 began in 1957 and was completed in 1969. The new highway supplanted U.S. 76, U.S. 176, and U.S. 178 as the main route connecting the state's three urban areas. Former U.S. Senators from South Carolina, Strom Thurmond and Fritz Hollings were the primary champions of the I-26 project. Connecting the interstate system with two of the State's major infrastructural assets, the Charleston Navy Base and the Charleston Port, was a major goal of the project, which cost a total of $204 million.

4.0 Project Impacts

4.1 Transportation Impacts

4.2 Demographic, Economic & Land Use Impacts

Development trends along the I-26 corridor in South Carolina have varied between counties, with urban counties generally seeing more development. A number of industrial parks have opened on or near I-26 in the decades since its completion. I-26 provides direct access to the Port of Charleston for the tenants of these parks. Between 1969 and 2002, employment in the I-26 counties grew from 459,000 to 942,000, or 105%. In a parallel group of counties to the south of I-26, employment grew from 270,000 to 523,000, or 94%. I-26 attracted up to 51,000 new jobs to the corridor during this period.

In Orangeburg County, proximity to the Port drew an importer of garden and patio furniture to locate a distribution center on U.S. 21 in 2003. The company uses I-26 to access the Port. Since opening in 1999, the Orangeburg Industrial Park has attracted four companies to its site at the I-26/U.S. 301 interchange. Orangeburg has dedicated an additional 3,000 acres for the development of industrial parks in the future.

In Laurens County, access to the Port of Charleston via I-26 has helped draw businesses to the area. There are a number of industrial parks in the county that rely on access to the I-26, as well as on I-385. Much of the growth immediately adjacent to the I-26 in Laurens County has occurred between exits 52 and 54, around the city of Clinton. Development in that segment has included some hotels, which depend upon travelers along the I-26 for business. Other than that stretch of I-26, the land along the interstate in Laurens County is mostly wooded.

In the 1980's and 1990's, Spartanburg County recruited about 30-40 international companies that established operations around I-26 and I-85. These included a 1,150-acre BMW automobile assembly plant in 1994. In the last ten years, numerous primary and secondary suppliers have located within a 60-mile radius of the BMW plant. The plant is located approximately 10 miles from I-26, and accessed via I-26 traveling from most directions. Built to serve demand of BMW automobiles directly in the US, the plant also manufactures specific models that are exported worldwide. It was the high number of accessible transportation facilities and its close proximity to a broad distribution range of a majority of BMW's primary United States markets that made Spartanburg a strategic location.

In the mid-1990's, Newberry County developed an industrial park off of I-26 exit 76. It has attracted a Caterpillar plant, as well as a few international investments such as the Komatsu facility. These companies created approximately 660 jobs. Access to I-26, proximity to Columbia, and relatively low operating costs in the area all served to attract businesses to Newberry, and prompted the County to open the industrial park. Newberry recently started developing a new industrial park at Exit 82 because the park at Exit 76 has reached capacity. The Newberry County Economic Development office stated that I-26 was a major factor in situating the County's second park at Exit 82, and the interstate has proven to be a significant selling point for the county when advertising their location to businesses. Businesses can draw labor from residential areas for about 45 miles in either direction via I-26. Since the County announced the new industrial park at Exit 82, commercial business in the area has increased, and land values have escalated. The County paid approximately $15,000 per acre for the industrial park. Shortly after that purchase, a nearby parcel of 6.8 acres sold for about $110,000 per acre.

In the area of Charleston, I-26 led to suburbanization in the 1960's and 1970's. The Northwoods Mall was constructed around I-26's Ashley Exit back in 1969. At that time, it was atypical to site a mall so far from an urban center. There have also been significant developments along the I-26 in the last 15 years. For example, Charleston landed a Boeing plant in 2004 that currently employs 2,000 people. Charleston's Economic Development manager partially attributes the arrival of this and other businesses to I-26.

5.0 Non-Transportation Factors

Development in the I-26 corridor has been influenced by broader regional economic trends. The southeast is one of the fastest growing regions in the United States both in terms of population and employment. Businesses are attracted to the region from elsewhere in the U.S. and from overseas because of relatively low rates of unionization and low costs of labor and land.

Two factors have prevented economic development along I-26 from reaching its full potential. Many areas of the I-26 corridor lack sewer, water, and electric connections. Further, there is an abundance of alternative interstates that provide equal or better access to South Carolina's three major urban areas (Greenville/Spartanburg, Columbia, and Charleston).

In Orangeburg County, the I-26/I-95 interchange is perhaps the most under-developed junction of primary interstate highways in the eastern United States. Historically, the development of sites adjacent to the junction has been constrained by the lack of utility service and freeway access.

In Laurens County, there are a number of industrial parks that rely on I-26 to move products in and out of the County. But many of the industrial parks are located closer to I-385, because of a lack of infrastructure along I-26. The Laurens County Chamber of Commerce says that the I-26 corridor in Laurens County has "lots of potential" if water and sewer pipes are provided.

In Spartanburg, the County Economic Development Corporation considers I-26 to be one of the most underutilized resources of major infrastructure in the county. A lack of sewer and other utility connections is the primary cause. Compounding this problem are a number of large privately-owned tracts of land along I-26 that landowners have been historically unwilling to sell, due to the property's low market value. Lack of infrastructure restricts demand that would raise property values. As utility networks have expanded along I-26, development has increased, particularly since 1991. However, there is still less development along I-26 than along I-85.

6.0 Resources

6.1 Citations

1. Economic Development History of Interstate 26 in South Carolina, US Department of Transportation Federal Highway Administration, http://www.fhwa.dot.gov/planning/econdev/i26sc.htm
2. Orangeburg CDC website:http://www.ocdc.com/flash.html Newberry County website:http://www.newberrycountysc.org/ Bureau of Transportation Statistics, http://www.bts.gov/publications/americas_freight_transportation_gateways/highlights_of_top_25_freight_gateways_by_shipment_value/port_of_charleston/index.html. Accessed 7/10/09
3. Data from the Bureau of Economic Analysis. Comparison corridor includes Abbeville, Aiken, Anderson, Bamberg, Barnwell, Colleton, Greenville, Greenwood, and Saluda Counties.

6.2 Interviews

Organizations

Charleston County

Laurens County Chamber of Commerce

Spartanburg County Economic Development Corp.

Orangeburg County Development Commission

Newberry County Economic Development

USDOT

Footnotes

Case Study Developed by ICF International