This morning I thought I’d share some thoughts about cost segregation and try to answer a number of questions that I get from owners and commercial real estate brokers.
Month: April 2025
Upstate Business Journal just published the commercial real estate deals completed in Q1 2025 in the Upstate of South Carolina. It looks like most of the big CRE firms have submitted their sales and leases to the Upstate Business Journal to be published.
Firms reporting include:
- Aline Capital
- Athena Advisory Services
- Avison Young
- CBRE
- Colliers South Carolina
- KDS Caine Commercial Real Estate
- Langston-Black Real Estate
- Lee & Associates
- Lyons Industrial Properties
- McCoy Wright Commercial Real Estate
- NAI Earle Furman
- Pintail
- Prime Realty
- Reedy Property Group
- Spencer Hines Properties
- Trinity Partners
- Watershed
- Wilson Kibler
- Windsor Aughtry
In a transformative move for Spartanburg County, South Carolina, NorthMark Strategies, through its subsidiary Valara Holdings, is investing a staggering $2.8 billion to convert the former Kohler manufacturing facility into a state-of-the-art high-performance computing (HPC) center. This ambitious project promises to redefine the region’s economic landscape, bringing cutting-edge technology, thousands of jobs, and sustainable innovation—all without costing taxpayers a dime. Here’s why this development is a big deal for Spartanburg and beyond.
A Bold Vision for the Future
The Kohler facility, once a hub for manufacturing, is being reimagined as a powerhouse for high-performance computing, a field critical to advancements in artificial intelligence, scientific research, and data analytics. NorthMark Strategies, a company focused on sustainable infrastructure, plans to leverage the site’s existing industrial framework to create a facility that not only meets the growing demand for computational power but also sets a new standard for eco-conscious development.
For a region already known for its manufacturing prowess, this pivot toward technology signals Spartanburg’s readiness to compete in the digital age.
Zero Cost to Taxpayers, Maximum Impact
One of the most compelling aspects of this project is its financial structure. Spartanburg County is not footing the bill for this massive investment. Instead, the county has strategically employed economic incentives to attract NorthMark’s investment while ensuring minimal strain on public resources. Through Fee-in-Lieu of Tax (FILOT) agreements, the county has reduced the property tax assessment ratio for NorthMark from 10% to 4% for 40 years, significantly lowering the company’s tax burden. Additionally, a Special Source Revenue Credit (SSRC) allows NorthMark to offset infrastructure costs, further sweetening the deal.
According to Spartanburg County Councilman David Britt, this project comes at “zero cost to taxpayers” and requires little from existing infrastructure. The facility will generate its own power using natural gas from an existing pipeline, ensuring it operates independently of the local grid. This self-sufficiency, combined with the county’s savvy use of incentives, makes the project a win-win for both NorthMark and the community.
A Sustainable Approach to High-Tech Innovation
Sustainability is at the heart of NorthMark’s vision. The decision to repurpose an existing industrial site rather than build from scratch minimizes environmental impact and preserves green spaces. By tapping into an existing natural gas pipeline, the facility will operate efficiently, reducing reliance on external energy sources. This aligns with broader trends in the tech industry, where companies are increasingly prioritizing eco-friendly solutions to meet both regulatory and consumer expectations.
Moreover, the project’s focus on high-performance computing positions Spartanburg as a hub for innovation. HPC centers are critical for processing massive datasets, running complex simulations, and driving breakthroughs in fields like healthcare, climate modeling, and machine learning. By bringing this capability to South Carolina, NorthMark is not only boosting the local economy but also contributing to global technological progress.
What This Means for Spartanburg County
The ripple effects of this $2.8 billion investment are profound. Beyond the immediate job creation, the HPC center is expected to attract ancillary businesses, from tech startups to supply chain partners, fostering a vibrant ecosystem of innovation. Local schools and universities may also see increased demand for STEM programs, preparing the next generation for careers in high-tech industries.
For residents, the project offers the promise of economic stability and opportunity. The influx of well-paying jobs could elevate the standard of living, while the county’s minimal infrastructure burden ensures that public services remain unaffected. As Spartanburg County Councilman Britt aptly noted, this is a “transformational” moment for the region—one that cements its reputation as a destination for forward-thinking investment.
A Model for Economic Development
Spartanburg County’s approach to this project serves as a blueprint for other communities looking to attract major investments. By leveraging tax incentives and existing infrastructure, the county has secured a multi-billion-dollar project without dipping into public funds. This strategic partnership with NorthMark demonstrates how local governments can balance economic growth with fiscal responsibility, creating opportunities that benefit everyone.
As construction begins and the HPC center takes shape, all eyes will be on Spartanburg. This isn’t just a local success story—it’s a testament to the power of vision, collaboration, and innovation. The future of high-performance computing is coming to South Carolina, and Spartanburg County is leading the charge.
What do you think about this exciting development? Share your thoughts in the comments below, and stay tuned for updates on Spartanburg’s high-tech transformation!
Tax Day for 2024 taxes has come and gone. Most building owners have filed for an extension on their taxes giving them 5 more months to get their corporate returns completed and 6 more for their personal returns. Now is the time to get those cost segregation studies completed so they are done well in advance of the true tax deadline.
I do cost segregation studies all over the country. We have a simple process that won’t cause you much headache at all. You can sleep confidently knowing the work was done by experts with a couple of decades of experience.
President Trump signed an executive order yesterday that reprioritizes where federal government offices need to be located. Like so much of the American government these days, this order goes back to when Jimmy Carter was U.S. President. He wanted to revitalize the central business districts and support the central cities. Now given so many central business districts are suffering as a result of local, state and federal Covid policies, central districts once the source for fun, entertainment, restaurants and office workers appears to be hurting in many areas. Trump’s order guarantees that more suffering is to come with the feds potentially moving out.
The government has a lot of extra space. Lease rates are very costly in CBDs and given the actions to trim the size of the overall goverment, Trump has decided we don’t need the space and we don’t need it downtown. Also, who wants to work downtown these days? Sure there are some cities that are still doing well. But if you are in a blue state, how are your central cities doing? How’s crime? Do people feel safe? How are the restaurants and shops doing in the central business district.
In a related story, the HUD building in Washington, DC has just hit the market. The federal government has put it up for sale.
This seems like a smart move by President Trump. It’s a good move for the tax payers and federal workers I suspect. It will cause more pain though for central business districts and the owners of commercial real estate.
It’s nice to see the closed transaction activity is continuing here in the Upstate of South Carolina. Many of us expect that we will benefit more than most areas in the U.S. with the new Trump policy to bring manufacturing back to the U.S. When I talk with commercial real estate brokers, while sales might be slower, they are still quite busy with leasing activity. Colliers of South Carolina has a strong team in the Upstate as can be seen by the transaction activity.
Greenville Business Magazine just published the Colliers Q12025 Closed Transactions for Greenville and Spartanburg.
If you run a brokerage and publish transaction data, please reach out to me and I’d be happy to publish it.
