AIKEN - At the end of May, Aiken County Council and school board leaders gathered at Sage Valley Golf Course.
They were responding to invitations from Weldon Wyatt, the Aiken County businessman who owns the course. Mr. Wyatt and his partners with FineDeering Development Group announced plans to build 5,000 homes over 10 years on either side of Graniteville.
In August, the county council voted to create a "tax increment financing" district, or TIF, and issue $36.3 million in bonds to help pay for water, sewer, roads and other utilities.
Proponents of the pending deal describe it as a groundbreaking partnership between government and the private sector that will spark needed growth.
But others say the county council's action, and a change in state law that made it possible, raises questions about FineDeering's lobbying of leaders.
"It's very apparent that Mr. Wyatt and his associates have lobbied their legislators and elected representatives very successfully," said Aiken County Councilman Scott Singer, who voted against the deal along with Councilman Gary Bunker.
The way the proposed development came about is a modern story of business, government and how they work together.
According to county land records, preparation for the development started at least as early as Dec. 15, when Mr. Wyatt sold 539 acres valued at $1.5 million to Sage Mill Residential LTD, a FineDeering holding company.
That same month, Mr. Wyatt asked Aiken City Manager Roger LeDuc about possible incentives for large residential development.
The city manager described the conversation as "general" and said Mr. Wyatt was on a "fact-finding mission," because cities often provide incentives when developers commit to build a large number of houses.
In March, Mr. Wyatt, who made a fortune building Wal-Mart stores across the Southeast, approached the Aiken County Council. During a session with the panel that was closed to the public, he described the project's scope but did not ask for incentives, County Administrator Clay Killian recalled.
At the end of May, Richard Fine and Bob Deering, Houston businessmen who lead FineDeering, gathered at Mr. Wyatt's Sage Valley Golf Course near Graniteville to announce plans for the huge development.
On June 13, Mr. Wyatt and representatives of FineDeering held another private meeting, this time with the Aiken City Council, Mr. LeDuc said. About 1,800 acres that FineDeering plans to develop sit between Trolley Line and Vaucluse roads and are contiguous to the city, which makes annexation a possibility.
Developers inquired about a possible TIF, but city council members turned a cold shoulder, Aiken City Councilman Dick Smith said.
On June 22, members of the city and county councils, along with members of the Aiken County school board, were invited to a lunch at Houndslake Country Club. FineDeering representatives opened another round of talks about TIF, this time directed toward the county.
Negotiations with the county were possible because legislation had passed June 2 that made it legal for counties to provide TIF incentives.
The county council can't move forward with the bond deal without consent from the school board, which is why a second meeting on the issue has been delayed until this month. But according to a transcript of the school board's July 12 meeting, members met with FineDeering during a closed-door meeting to discuss a TIF district.
The panel voted in favor of the bond deal after the meeting, records show.
"It's going to bring in a bunch of tax dollars," said school board member Larry Murphy, who supports the deal.
Even though initial tax revenue from FineDeering homes will go to pay back bonds, it won't overburden current taxpayers because developers have agreed to give the school district more than 80 acres for a new elementary school near Graniteville, Mr. Murphy said.
"We've already planned for (the school) and have money for it," he added.
THE NUMBER OF CLOSED meetings to persuade public officials doesn't sit well with open-government advocates.
None of the meetings between FineDeering and local government should have been held behind closed doors, according to Jay Bender, an attorney for the South Carolina Press Association. The councils and school board can meet away from the public to discuss their own positions, but negotiations with the developer are privy to public scrutiny, according to the state's Freedom of Information Act, he said.
Still others question the way state law was changed to accommodate the TIF procedure in rural areas.
The law that enabled the pending bond deal likely wouldn't have passed the last day the Legislature met if not for Aiken County Rep. Roland Smith, R-Langley.
The Senate approved its version of the legislation early in its session Feb. 16 and sent it to the House, which discussed it several times in late May before sending it to Gov. Mark Sanford for approval.
But Mr. Sanford vetoed the proposed law June 1, saying that it gave counties too much eminent domain power.
The next day, the Senate overrode the veto, with Sen. Tommy Moore, D-Clearwater, voting to override and Sen. Greg Ryberg, R-Aiken, voting to uphold it.
From there, the law was temporarily stalled in the House, which narrowly supported the veto 51 votes to 50.
It was an apparent change of heart by Roland Smith, which came about after speaking with Mr. Moore, that eventually swayed the House, according to House records and Roland Smith.
He said he changed his mind because the bill had been poorly explained before the first vote and that Mr. Moore alerted him that it was indeed a TIF for counties.
After a speech by Roland Smith that he said clarified the bill's intent, the House reversed course and overrode the governor's veto 87 votes to 16, putting the wheels in motion for a potential bond deal between FineDeering and the county.
Roland Smith said his vote had nothing to do with FineDeering. He said he couldn't recall if Mr. Moore had mentioned FineDeering or Mr. Wyatt.
Mr. Moore, who is running for governor in 2006, said his support of the law wasn't specific to FineDeering.
Mr. Moore's son Baylen, a registered lobbyist at the State House who used to work for the McNair law firm in Columbia that is assisting FineDeering, also has been involved in the process.
He was present when FineDeering met with the county council behind closed doors Aug. 17. He was there to assist Frannie Heizer, an attorney with McNair, but was not paid by Mr. Wyatt or FineDeering, Baylen Moore said.
He said he did not lobby on behalf of bills in the House or Senate that proposed expanding TIF into counties.
"My involvement is that I'm from Midland Valley, and I think this is good development. ..." Baylen Moore said. "If you go back in and look at the voting record, hundreds of legislators voted for the bill."
Mr. Wyatt said he knew little about TIF legislation that passed this year and that Ms. Heizer told him what it would do.
"What I was looking for was a mechanism where we could produce housing, upscale subdivisions for working-class people," Mr. Wyatt said. "Speaking from a developer's point of view, I think it's a great thing to initiate growth."
THOSE WHO SUPPORT the proposed bond deal say it provides an instrument to spread growth to the north side of the county. FineDeering, which includes 17 partners in Texas and South Carolina, including Mr. Wyatt, is putting up $56 million of its own money to assist with the construction of roads, sewers and water systems toward Graniteville and Interstate 20.
Under their proposal, developers would help bridge the county's water-supply gap between U.S. Highway 1 in Midland Valley and I-20. Developers have met with the Valley Public Service Authority, which provides water to the area, but nothing has been formalized, said Calvin Smith, the service authority's general manager.
"It's going to be a big asset to a lot of different things in the area," he said. "It's probably something that doesn't come around that often, something this big."
Critics focus on the county's $36.3 million portion, which they say amounts to a gift to the developers paid for by existing taxpayers.
"None of these concessions were ever made before," said Joe Scire, the president of the Home Builders Association of Aiken County. "It's unfair competition.
"He can sell the same or similar type of product at a lower price."
Mr. Wyatt is selling portions of his 2,400 acres to FineDeering over time. He said he is holding on to about 50 acres located on Aiken's bypass near Trolley Line Road that will be home to commercial space.
He acknowledged that he'll benefit from the bond deal. But so will the county and other private investors who locate near the proposed neighborhoods, he said.
"I'm going to profit from it," he said. "I'm going to profit whether they (the county council) do it or don't do it."
AIKEN COUNTY ISN'T alone in its use of TIFs.
Legislation to expand the financing into counties was introduced to assist counties with infrastructure needs, said Ms. Heizer, who assisted legislators as they wrote the law.
"There was such a need for infrastructure, the counties needed a vehicle to achieve that," she said.
Rep. Robert "Skipper" Perry, R-Aiken, said he supported expanding TIF districts for county purposes because of appeals from his colleagues who represent rural areas.
"They wanted a shot at the same thing the cities had," he said. But "if you asked 100 of them, I don't think one of them would say this FineDeering thing is what they were talking about. They were talking about blighted areas."
Reach Josh Gelinas at (803) 648-1395, ext. 110 or firstname.lastname@example.org.