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Economic Development History of Interstate 26 in South Carolina

Interstate 26 South Carolina shield logo

1 Interstate 26: The Roadway

1.1 Project Length/Location

Figure 1: Map of I-26 in S.C.

Interstate 26 is an east-west highway, which connects South Carolina, North Carolina, and Tennessee.

Interstate 26 (I-26) is an east-west highway which connects South Carolina, North Carolina, and Tennessee. Cities on the route include Charleston, Columbia, and Spartanburg in South Carolina, as well as Asheville in North Carolina, and Johnson City in Tennessee.

This report focuses on the 221 miles of I-26 in South Carolina. The highway crosses the entire state, from the Atlantic Ocean to the Appalachian Mountains. The eastern endpoint is in the port city of Charleston. The western terminus is at the North Carolina/South Carolina border in Spartanburg County. Although I-26 is numbered as an east-west Interstate Highway, it is on a northwest-southeast orientation in South Carolina.

I-26 traverses ten counties in South Carolina, as shown on the map. According to the U.S. Office of Management and Budget designations, these counties are in four metropolitan areas (Charleston, Columbia, Greenville, Spartanburg) and two micropolitan areas (Orangeburg and Newberry).

The eight metropolitan counties are shaded lightly on the map. Berkeley, Charleston, and Dorchester counties are in the Charleston-North Charleston metropolitan statistical area (MSA). The Columbia MSA includes Calhoun, Lexington, and Richland counties. Laurens County is a part of the Greenville MSA. Spartanburg County is the sole jurisdiction in the Spartanburg MSA.

I-26 was the second Interstate Highway to be completed in South Carolina, after I-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 the rest of the southern States, and ending in western Texas), I-85 (connecting Alabama to Virginia), I-77 (connecting Columbia, SC to the Midwest and ending in Cleveland, OH), and I-95 (running from Florida to Maine). I-26 connects directly with all of the aforementioned highways.

Within South Carolina, the highway spans 221 miles, bisecting the State and stretching from the North Carolina border to the Port of Charleston. Major cities along the route are Charleston, Columbia, and Spartanburg.

1.2 Details of Construction

In January 1957, the South Carolina highway department awarded the first grading contract for I-26, covering nine miles just outside of Columbia near the midpoint of the corridor.[1] The first long section of I-26, from Huger Street in Columbia northwest to Pomaria, opened on September 7, 1960. After the five-mile segment between the North Carolina line and SC 11 opened in Spartanburg County on November 1, 1964, the only remaining incomplete sections were in Charleston County. By February 1969, the entire 221 miles were finished. A dedication ceremony was held in Charleston on March 10, 1969. U.S. Senators 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 $1.52 billion dollars (2012$).

Most sections of I-26 in South Carolina are four lanes wide. The South Carolina DOT widened some segments of the highway to six lanes in the Columbia area in the early 1990s.

1.3 Reasons for Project Development

The corridor between Charleston and Columbia has long been important in South Carolina history. In the colonial era, one of the five main Indian paths in South Carolina was the Cherokee, or Keowee Path (the lower portion was also known as Broad Path), which ran from Charleston to Columbia to Oconee County. Road-building was delayed in South Carolina because coastal tidal streams and narrow Indian paths met most of the region's transportation needs.

As exports via the port of Charleston declined in the 1810s, the competing port of Savannah, Georgia, flourished. In response, the South Carolina legislature approved a study of the State's transportation needs in 1817. Steamboat transportation between Charleston and Columbia began in the 1820s, followed by a toll road in 1829. In 1833, the South Carolina Railroad opened between Charleston and Hamburg, a town across the Savannah River from Augusta, Georgia. Then the world's longest passenger steam railroad line increased commerce through Charleston's port; a branch line to Columbia opened in 1842. South Carolina's Route (SC) 2, the highway connecting Greenville, Columbia, and Charleston, was the State's "Main Street" in the 1920s and '30s. By the 1940s, SC 2 had been re-designated as U.S. 76, U.S. 176, and U.S. 178. Their replacement, I-26, was constructed in the 1950s and '60s between Charleston, Columbia, Spartanburg, and the North Carolina line.

1.4 Traffic Counts

The Port of Charleston and manufacturing plants in the Spartanburg region are the major generators of traffic on I-26. I-26 and the Port of Charleston serve as major trade conduits for manufacturing in and around Spartanburg. The Port of Charleston has handled as much as 18 million short tons of freight in 2003, up from 12 million short tons in 1997. In 2003 it was the second busiest container port on the East and Gulf Coasts, handling 1.2 million twenty-foot equivalent units (TEUs). However, due to the recent economic decline, the amount of volume handled by the Port of Charleston dropped to 13.4 million short tons in 2009. Major import commodities at the port include consumer goods, machinery, food, acids and chemicals, and textiles. Major exports include food items, paper products, wood pulp, clay products, and acids and chemicals.

In the last several years, congestion on I-26 has been increasing around the Port of Charleston. Consequently, the South Carolina Inland Port will open its facilities in September 2013 in Greer. The Greer facility is over 200 miles inland from the Port of Charleston. Movement of freight will be done at night. Goods will be transported between the facility and the Port of Charleston by rail.

Average daily traffic more than doubled along major segments of I-26 in the first ten years after the Interstate's development. Between SC 49 and I-385 near Spartanburg, traffic grew from 3,500 to 7,300 vehicles per day from 1969 to 1979. Traffic nearly tripled along one segment of the Interstate near Columbia, from 20,200 to 59,000 vehicles per day. In the 1980s, traffic doubled again on segments of the road around Spartanburg and Charleston. In subsequent years, traffic has continued to grow along the entire corridor, though not as rapidly. In 2009 traffic rose 6.1% near Spartanburg and experienced a decline of 3% near Columbia.

Table 1 shows annual average daily traffic (AADT) at selected locations of I-26 from 1969 to 2009. On many segments, volumes increased five-fold over the 40-year period. In recent years, the heaviest traffic is near the I-20/I-26 junction in the Columbia area (132,900 vehicles) and near the I-26/I-526 junction in Charleston (133,100 vehicles). A smaller traffic peak occurs in Spartanburg near U.S. 29 and I-85 (55,500 vehicles). The lowest traffic volume is immediately north of the I-26/I-385 junction in southern Spartanburg County (19,000 vehicles).

Table 1: Annual Average Daily Traffic on I-26: 1969-2009

County I-26 Segment 1969 1979 1989 2003 2009 Compounded Average Annual Growth Rate
From To 1969-79 1979-89 1989-03 2003-09
Spartanburg N.C. State Line SC 14 4,600 8,900 17,500 23,500 25,700 6.8% 7.0% 2.1% 1.5%
Spartanburg SC 85 U.S. 29 9,200 21,700 30,100 52,700 55,500 9.0% 3.3% 4.1% 0%
Spartanburg SC 49 I-385 (Laurens) 3,500 7,300 13,800 17,900 19,000 7.6% 6.6% 1.9% 1.0%
Lexington S-36 I-20 20,200 59,000 85,300 137,000 132,900 11.3% 3.8% 3.4% -0.5%
Richland I-20 I-126 27,600 58,100 97,400 118,000 110,600 7.7% 5.3% 1.4% -1.1%
Dorchester U.S. 15 SC 453 4,300 8,600 18,700 26,800 29,800 7.2% 8.1% 2.6% 1.8%
Charleston S-13 I-526 28,700 51,200 104,000 133,500 133,100 6.0% 7.3% 1.8% -0.1%
Mark Clark

Source: South Carolina Department of Transportation

2 The I-26 Corridor: Low Country to Upstate

2.1 Physical Features of I-26 Corridor

I-26 traverses all major geographical regions of South Carolina. It begins in Charleston, which has one of the better natural harbors on the Atlantic Coast. Heading northwest from Charleston, the highway crosses the Atlantic Coastal Plain, a flat, swampy area that gradually undulates inland. The large plantations of indigo, rice, and cotton in the State's early history were located on the Atlantic Coastal plain. A wildlife refuge is located near the I-26/I-95 junction in Four Holes Swamp, a blackwater stream system that feeds into the Edisto River. In the Columbia area, I-26 crosses the fall line, the boundary between the Coastal Plain and the Piedmont Plateau. Many of the State's early waterwheel powered textile mills were concentrated in the Piedmont. Lake Murray, a 78-square mile reservoir created by a utility company in 1930, is northwest of Columbia. The Piedmont is known for its wooded, rolling hills; I-26 passes through part of Sumter National Forest between Columbia and Spartanburg. Since mechanization of agriculture, acreage of cultivated land in the hilly Piedmont has declined significantly. North of Spartanburg, I-26 crosses the Blue Ridge Mountains into North Carolina.

Today, South Carolinians generally divide the State into three regions. The Coastal Plain is known as the "Low Country" or "Lowcountry." The Columbia area is referred to as the "Midlands." The "Upstate" (once known as the "Up Country") is centered on Greenville and Spartanburg.

2.2 The I-26 Highway Network

I-26 begins at U.S. 17 near downtown Charleston. I-526 (Mark Clark Expressway) is a loop route in the Charleston area; it opened in stages, the first portion in the late 1970s and then the second in the early 1990s. After crossing Charleston, Berkeley, and Dorchester counties, I-26 intersects with I-95, the main north-south route on the Eastern Seaboard, in Orangeburg County. I-26 forms the western leg of the beltway around Columbia; it intersects with the south terminus of I-77 (Columbia to Cleveland) and with I-126 (spur into downtown Columbia) and I-20 (Eastern South Carolina to western Texas via Atlanta and Dallas-Ft. Worth). The portion of I-77 between I-20 and I-26 is known locally as the "Southeastern Beltway." The I-77/Southeastern Beltway segment between I-26 and Bluff Road opened in August 1986; the final section of I-77 opened on June 15, 1995. Near Clinton in Laurens County, I-385 provides a direct connection between I-26 and Greenville while I-26 itself heads for Spartanburg.

In the Spartanburg area, I-26 crosses Business Route 85 and I-85 (which connects Atlanta to Petersburg, VA via Charlotte and Greensboro, NC). Business 85 is the former I-85 route through Spartanburg; I-85 moved to a new alignment north of the city in August 1995.[2] Northwest of Spartanburg, I-26 exits into North Carolina towards I-40 (in Asheville, NC) and I-81 (in Kingsport, TN). The section of I-26 between North Carolina and Tennessee opened in 2003. Planning is underway for a new I-26 connector north of I-40 in the Asheville area.

As the only Interstate Highway to South Carolina's Atlantic coast, I-26 is a vital hurricane evacuation route. After a major traffic jam related to Hurricane Floyd in 1999, the State government revised the I-26 evacuation plan. In a hurricane emergency, eastbound lanes will be turned over to westbound traffic from Charleston to Columbia and the number of exits available from the reversed lanes will be increased.

Congress designated portion of the High Priority Corridor 5 as future Interstate route 73.[3] The route would intersect with I-26 in the Charleston area. I-73 is promoted as a Charleston/Detroit highway. After opposition to the highway in Charleston, in 1998 the South Carolina DOT selected Myrtle Beach as the preferred endpoint, with its other endpoint in Georgetown, SC. Proponents in those communities view I-73 as a boon to economic development in the Lowcountry region. Some I-73 proponents advocate an endpoint at I-26 in Berkeley County,[4] but as of 2007, when the State completed environmental impact studies and purchased rights of way, Myrtle Beach remained the selected terminus.[5]

2.3 Interstate 26 Communities

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 Sumter. I-26 is crucial to this industry since most of their tourists arrive by car. The Charleston-North Charleston-Summerville, SC MSA had a total population of 664,600 in 2010.

Columbia, the State capital, is the largest city in South Carolina. The Columbia metropolitan area had a 2010 population of 767,947 based on the BEA report. 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 a BEA population of 284,792 in 2010, 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 areas of Newberry and Clinton, situated between Spartanburg and Columbia. Orangeburg County, located 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 10.0% compared to 6.8% across the State of South Carolina based one the Bureau of Labor Statistics.

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 I-26. In the twenty years after the construction of the Interstate (from 1969 to 1989), population grew by 1.7% per year, while the State as a whole grew by 1.4%. However, other parts of the State have subsequently grown more rapidly than the corridor counties. Population growth in the corridor from 1989 to 1999 averaged 3% per year compared to 1.4% in the rest of the State. This trend stopped from 1999 to 2009 when the corridor counties and the State grew at a similar pace of 1.5%.

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 1980s and 1990s.

I-26 passes through the following counties, which are highlighted as follows:

Charleston area: Charleston is one of the nation's leading container ports. Container traffic through Charleston increased seven-fold between 1980 and 2003, from 239,000 to 1.69 million twenty-foot equivalent units (TEUs). Container traffic through all U.S. ports increased four-fold over the same time span. Charleston's 2003 container throughput was comparable to Hampton Roads and Savannah. Water transportation has attracted heavy industry to Charleston. A paper mill, currently operated by KapStone Paper and Packaging Corporation, has been situated beside the Cooper River since 1936. In 1970, Bayer AG (now Lanxess Corporation) opened the Bushy Park industrial complex near Goose Creek, which is now the site of chemical plants operated by AGFA, Sun Chemical, and other companies. Since the late 1990s, Nucor Steel has operated a mill near Cainhoy that now produces three million tons per year; much of its feedstock (scrap metal) is received by ship and barge.

One rationale for the construction of I-26 was to serve military bases in Charleston. The 437th Airlift Wing operates from Charleston Air Force Base. The Naval Weapons Station Charleston includes a Space and Naval Warfare (SPAWAR) Systems Center that produces advanced technology products for military and civilian applications. At least 15,000 civilian and military jobs were lost when operations ceased at the Charleston Navy Base and Shipyard on April 1, 1996. The closure caused near-term economic dislocation but opened land for port expansion (a proposed three-berth, 288-acre container terminal) and other uses.

Tourism is a vital part of the regional economy; the historic downtown is a big draw. 4.6 million visitors generated a total economic impact of $5.1 billion in 2003.[6] The industry has experienced explosive growth since the late 1970s. I-26 is important to Charleston's tourism industry because most visitors arrive from its major market (the northeast and Ohio) by private automobile; other tourist destinations, such as San Francisco and New Orleans, have higher percentages of travelers who arrive by air.

As a consequence of zoning and historic preservation ordinances, downtown Charleston lacks the tall office buildings that characterize the central business districts that anchor metropolitan areas in most American cities. In Charleston, this development is likely scattered throughout the city or located in suburban office parks.

The Medical University of South Carolina in Charleston has generated off-campus jobs in health care businesses. Agriculture is also important to the Charleston County economy; it ranked 29th for tomato production and 74th for cucumber output among U.S. counties in 1997.

Most of the new development in the Charleston area occurs on the I-26 corridor in Berkeley and Dorchester counties, especially in the vicinity of Summerville.

Orangeburg: The largest city between the Charleston and Columbia areas is Orangeburg (2010 population: 13,964). The county has a double-digit unemployment rate; it lost more than 1,000 jobs in the late 1990s when several local plants closed. Orangeburg is one of the State's most significant farming counties. It ranked 177th among U.S. counties for cotton harvested in 2007 and 2nd in South Carolina.

Columbia area: Columbia is the State capital. The government was the top employment sector in Richland County until 1997, when the service sector surpassed it. Lexington County contains part of suburban Columbia along with many farms; it was South Carolina's top agricultural county in 2002 in terms of value of products sold. Lexington ranked 76th nationally in broilers and other meat-type chickens sold in 2007. Additionally, Lexington ranked 58th in peach production in 1997. The I-26 corridor northwest of Columbia has experienced rapid growth in the past 20 years, especially in the vicinity of the Harbison interchange (Exit 103). Northeast Columbia has also grown, spurred by the construction of the Southeastern Beltway (I-77) in the 1980s and 1990s.

Newberry & Laurens: Newberry and Laurens are rural counties. Forestry is an important industry. In terms of delivered value of timber in 2001, Newberry and Laurens respectively ranked second ($40.2 million) and twelfth ($22.0 million) among South Carolina counties.[7] Newberry County has several saw and chip mills, two poultry processing plants, and a large egg farm. Presbyterian College is in Clinton (U.S. Census 2010 population: 8,490), the seat of Laurens County. CMI Industries closed its large textile mill in Clinton in 2001.

Spartanburg area: Spartanburg (U.S. Census 2010 population: 37,013) and Greenville (U.S. Census 2010 population: 58,409) are the anchors of the Upstate region. The first railroad between Charlotte, NC and Atlanta, GA passed through the cities in the mid-1870s, spurring industrial growth. The Spartanburg-Greenville area was the industrial hub of South Carolina in the textile mill era of the 20th Century and continues to be the State's manufacturing center today. Spartanburg County produced $3.2 billion in value added by manufacture in 1997, ranking second in the State to Greenville County ($4.6 billion). BMW opened an automobile assembly plant beside I-85 in western Spartanburg County in 1994; about 50% of production is exported, mostly through the Port of Brunswick in Georgia. Numerous primary and secondary suppliers have located within a 60-mile radius of the Greer BMW plant. Spartanburg is also an agricultural county; it ranked 23rd in the nation in peach production in 1997.

Greenville became a model for successful military base reuse. After Donaldson Air Force Base closed in 1963, much of its territory was converted into a 2600-acre industrial park.

3 Socioeconomic Trends in the I-26 Corridor

3.1 Population

Tables 2A and 2B shows that the population of the I-26 corridor increased more rapidly than the State and nation in the decade after the highway was completed in 1969. During the 1970s, I-26 induced population growth in suburban Charleston (Berkeley and Dorchester counties) and Columbia (Lexington County). Corridor population also grew more rapidly than South Carolina as a whole and the nation from 1979 to 1989. While the corridor growth rate was slightly lower than the State rate from 1989 to 1999, population along the corridor once again grew at a slightly higher pace than the State from 1999 to 2009 and from 2009 to 2011. In the 1990s, Newberry County finally recovered to its 1920s population level; the boll weevil and changing agricultural practices devastated its cotton industry, causing its population to decline through most of the 20th century.

The populations of the two non-metro/rural counties grew slower than the State of South Carolina for all time periods

Several counties on the I-26 corridor experienced continued population growth since the completion of I-26, but none was as high as suburban Charleston (Dorchester and Berkeley counties).

Many of the I-26 counties have large African-American populations; Orangeburg has an African-American majority. The highest percentage of Hispanics (4.2% in 2000) is in Newberry County, where many work in the poultry processing industry.

Table 2A: Population: 1969-2011

Counties

1969

1979

1989

1999

2009

2011

Spartanburg

171,467

199,543

224,609

251,886

283,335

286,868

Laurens

49,590

51,593

57,430

68,783

66,897

66,528

Newberry*

28,894

31,078

33,216

35,995

37,413

37,721

Lexington

84,983

137,574

164,595

213,243

258,983

267,129

Richland

228,855

267,657

284,032

318,034

380,245

389,116

Calhoun

10,198

12,005

12,633

14,961

15,268

15,145

Orangeburg*

69,786

81,410

84,814

91,313

92,755

91,910

Dorchester

31,394

55,474

81,230

94,966

133,560

140,892

Berkeley

54,689

91,022

126,856

141,956

175,092

183,525

Charleston

247,753

278,662

294,737

309,247

346,795

357,704

SC I-26 Corridor

977,609

1,206,018

1,364,152

1,540,384

1,790,343

1,836,538

South Carolina

2,570,000

3,086,885

3,456,777

3,974,682

4,589,872

4,679,230

United States

201,298,000

224,568,579

246,819,222

279,040,168

306,771,529

311,591,917

* Indicates counties that are classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Bureau of Economic Analysis

Table 2B: Population Compounded Average Annual Growth Rate: 1969-2011

Counties Compounded Average Annual Growth Rate
1969-79 1979-89 1989-99 1999-09 2009-11
Spartanburg 1.5% 1.2% 1.2% 1.2% 0.6%
Laurens 0.4% 1.1% 1.8% -0.3% -0.3%
Newberry* 0.7% 0.7% 0.8% 0.4% 0.4%
Lexington 4.9% 1.8% 2.6% 2.0% 1.6%
Richland 1.6% 0.6% 1.1% 1.8% 1.2%
Calhoun 1.6% 0.5% 1.7% 0.2% -0.4%
Orangeburg* 1.6% 0.4% 0.7% 0.2% -0.5%
Dorchester 5.9% 3.9% 1.6% 3.5% 2.7%
Berkeley 5.2% 3.4% 1.1% 2.1% 2.4%
Charleston 1.2% 0.6% 0.5% 1.2% 1.6%
SC I-26 Corridor 2.1% 1.2% 1.2% 1.5% 1.3%
South Carolina 1.8% 1.1% 1.4% 1.4% 1.0%
United States 1.1% 0.9% 1.2% 1.0% 0.8%

* Indicates counties that are classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Bureau of Economic Analysis

3.2 Employment

As seen in Table 3, 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. In most counties, employment grew most rapidly in the decade after the completion of I-26. The fastest growth was registered in suburban Charleston (Berkeley and Dorchester counties) and suburban Columbia (Lexington County) from 1969 to 1979.

Among the non-metropolitan/rural counties, employment grew more slowly in Newberry than in South Carolina. Orangeburg County has seen a decline in full and part-time employment during the last decade along with Laurens County.

Several counties on the I-26 corridor saw little or no change in their employment numbers during the last decade while others saw significant boosts of employment from 1999 to 2011. Even though they saw little change increase to their employment numbers, Richland and Spartanburg counties continue to maintain the highest levels of employment in the State of South Carolina. In present day, Charleston maintains the strongest growth rate with a reported 2.1% growth in the recent post-recession period between 2009 and 2011.

Table 3: Full-Time and Part-Time Employment: 1969-2011

Counties 1969 1979 1989 1999 2009 2011 Compounded Average Annual Growth Rate
1969-79 1979-89 1989-99 1999-09 2009-11
Spartanburg 80,936 105,427 127,410 145,595 148,440 148,778 2.7% 1.9% 1.3% 0.2% 0.1%
Laurens 21,059 23,468 25,013 26,151 25,142 24,520 1.1% 0.6% 0.4% -0.4% -1.2%
Newberry* 12,551 14,605 14,739 16,488 17,512 17,559 1.5% 0.1% 1.1% 0.6% 0.1%
Lexington 27,796 51,385 73,253 108,939 142,183 143,951 6.3% 3.6% 4.0% 2.7% 0.6%
Richland 133,750 173,077 220,960 257,413 265,586 261,084 2.6% 2.5% 1.5% 0.3% -0.9%
Calhoun 4,276 6,078 5,213 6,665 8,739 8,606 3.6% -1.5% 2.5% 2.7% -0.8%
Orangeburg* 30,927 34,024 38,865 43,445 42,851 42,187 1.0% 1.3% 1.1% -0.1% -0.8%
Dorchester 8,253 15,902 25,407 33,045 35,909 36,182 6.8% 4.8% 2.7% 0.8% 0.4%
Berkeley 11,621 23,351 33,380 44,323 72,150 73,124 7.2% 3.6% 2.9% 5.0% 0.7%
Charleston 127,972 165,353 216,885 239,476 289,571 301,966 2.6% 2.7% 1.0% 1.9% 2.1%
SC I-26 Corridor 459,141 612,670 781,125 921,540 1,048,083 1,057,957 2.9% 2.5% 1.7% 1.3% 0.5%
South Carolina 1,170,440 1,507,001 1,858,308 2,239,869 2,458,591 2,481,658 2.6% 2.1% 1.9% 0.9% 0.5%

* Indicates counties that are classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Bureau of Economic Analysis

Table 4 shows that for the past 30 years, the I-26 corridor has consistently had lower levels of unemployment than the State of South Carolina. The corridor has been in use for over 40 years and has been able to sustain jobs in the regional area. In 1990, only Newberry, Calhoun, Laurens, and Orangeburg counties had higher levels of unemployment than the State average. In 2000, Laurens fell from that list and only the other three counties experienced higher unemployment than the State. In 2010, due to the effects of the economic recession, unemployment rose significantly. As a whole, unemployment levels grew significantly in the I-26 counties, while Lexington, Dorchester and Charleston Counties maintained the lowest levels of unemployment. These three counties also saw some of the greatest growths in population indicating that they are economically better off than the rest of the State and act as an anchor in the economy of the I-26 corridor. Orangeburg and Calhoun Counties, while sustaining the greatest loss in population from 2000-2010, saw the greatest increase in unemployment. Combining both the decline employment and population could indicate a severe economic strain for these counties that may have led residents to find work elsewhere in another counties and/or another industry.

Table 4: Average Annual Unemployment by County (1990-2010)

County

1990

2000

2010

Labor Force

Level

Rate

Labor Force

Level

Rate

Labor Force

Level

Rate

Spartanburg

118,291

5,259

4.4%

130,780

4,552

3.5%

133,823

15,392

11.5%

Laurens

28,992

1,560

5.4%

34,185

1,096

3.2%

30,750

3,584

11.7%

Newberry*

16,353

921

5.6%

17,427

716

4.1%

18,683

1,972

10.6%

Lexington

95,540

3,414

3.6%

119,317

3,135

2.6%

132,666

10,844

8.2%

Richland

145,750

5,360

3.7%

163,028

5,193

3.2%

181,224

17,521

9.7%

Calhoun

6,057

387

6.4%

7,152

263

3.7%

6,728

783

11.6%

Orangeburg*

38,684

2,964

7.7%

41,017

2,326

5.7%

41,556

6,282

15.1%

Dorchester

38,471

1,117

2.9%

47,632

1,406

3.0%

67,098

6,024

9.0%

Berkeley

55,403

1,618

2.9%

66,314

2,099

3.2%

82,772

8,077

9.8%

Charleston

140,189

4,176

3.0%

154,250

4,899

3.2%

173,375

15,826

9.1%

SC I-26 Corridor

683,730

26,776

3.9%

781,102

25,685

3.3%

868,675

86,305

9.9%

South Carolina

1,705,510

83,570

4.9%

1,966,500

70,794

3.6%

2,159,200

241,451

11.2%

* Indicates counties and independent cities that are classified as non-metropolitan by the U.S. Office of Management and Budget.

Source: Bureau of Economic Analysis

3.3 Personal Income

Real per capita personal income in the I-26 corridor is generally similar to that of South Carolina as a whole. However, only Lexington, Richland, and Charleston counties have consistently exceeded the statewide level. Per capita personal income increased more rapidly in the corridor than in the State between 1969 and 1979 and Charleston had the highest per capita income in the corridor which was significantly above the State average. Growth was positive for all counties and periods in the decade after I-26 was completed, except for Lexington County since 1999.

Table 5: Real Per Capita Personal Income: 1969-2011

Counties 1969 1979 1989 1999 2009 2011 Compounded Average Annual Growth Rate
1969-79 1979-89 1989-99 1999-09 2009-11
Spartanburg $14,858 $19,472 $25,175 $31,218 $31,542 $32,237 2.7% 2.6% 2.2% 0.1% 1.1%
Laurens $14,000 $18,465 $22,627 $26,403 $29,183 $30,139 2.8% 2.1% 1.6% 1.0% 1.6%
Newberry* $13,655 $19,387 $21,873 $26,246 $30,246 $30,228 3.6% 1.2% 1.8% 1.4% 0.0%
Lexington $16,810 $20,502 $29,395 $37,141 $35,929 $35,841 2.0% 3.7% 2.4% -0.3% -0.1%
Richland $16,021 $20,433 $28,183 $34,759 $36,290 $36,997 2.5% 3.3% 2.1% 0.4% 1.0%
Calhoun $12,328 $17,873 $22,685 $27,844 $34,016 $35,047 3.8% 2.4% 2.1% 2.0% 1.5%
Orangeburg* $11,474 $15,544 $20,685 $25,407 $29,160 $29,483 3.1% 2.9% 2.1% 1.4% 0.6%
Dorchester $14,279 $19,680 $24,855 $27,721 $32,250 $34,067 3.3% 2.4% 1.1% 1.5% 2.8%
Berkeley $12,263 $17,164 $21,944 $24,950 $32,368 $33,778 3.4% 2.5% 1.3% 2.6% 2.2%
Charleston $15,592 $19,667 $27,009 $36,595 $40,928 $42,401 2.3% 3.2% 3.1% 1.1% 1.8%
SC I-26 Corridor $14,128 $18,819 $24,443 $29,828 $33,191 $34,022 2.9% 2.6% 2.0% 1.1% 1.2%
South Carolina $14,080 $18,410 $24,762 $31,291 $33,130 $33,985 2.7% 3.0% 2.4% 0.6% 1.3%

* Indicates counties that are classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Bureau of Economic Analysis (adjusted to 2012 dollars with National Implicit Price Deflators for Personal Consumption Expenditures)

3.4 Industry Mix

Table 6 shows the farm and non-farm employment by industry in the I-26 corridor (sum of the ten I-26 counties) in selected years from 1969 to 2011. The growth rate for total non-farm employment was highest in the decade after the highway's completion, but decreased in the 1990s and 2000s. The years 1969-1999 should be analyzed separately from 2009-2011 due to classification reassignment beginning in 2001. The decline of the Manufacturing Industry in the 1990s was due in part to closing of textile mills and this decline became even more dramatic in the 2000s. The Construction Industry saw a considerable decline from 2009 to 2011. Government employment maintained a relatively constant level in the 2000s.

Table 6A: Farm and Non-Farm Employment by Industry in the I-26 Corridor: 1969-2011

Industry Sector 1969* 1979* 1989* 1999* 2009 2011
Ag. Services/Forestry/Fishing 1,775 3,421 4,964 8,156 2,631 2,651
Mining 641 634 864 1,008 928 955
Construction 27,714 38,069 46,540 58,692 58,260 51,649
Manufacturing 95,615 114,999 117,786 108,584 84,608 86,192
Transportation/Public Utilities 18,606 25,872 31,665 42,177 27,556 25,821
Wholesale Trade 15,646 24,575 30,801 38,028 30,389 31,756
Retail Trade 51,736 85,169 129,512 160,577 109,118 109,352
Finance/Insurance/Real Estate 21,541 37,953 52,184 61,413 47,942 46,144
Services 74,860 101,283 163,851 249,187 NA NA
Government/Gov't Enterprises 134,562 165,634 193,009 184,618 194,074 191,373
Total Nonfarm Employment 442,696 597,609 771,176 912,440 555,506 545,893

*Based on SIC
Source: Bureau of Economic Analysis

Table 6B: Farm and Non-Farm Employment by Industry in the I-26 Corridor: 1969-2011

Industry Sector Compounded Average Annual Growth
1969-79 1979-89 1989-99 1999-09 2009-11
Ag. Services/Forestry/Fishing 6.8% 3.8% 5.1% -10.7% 0.4%
Mining -0.1% 3.1% 1.6% -0.8% 1.4%
Construction 3.2% 2.0% 2.3% -0.1% -5.8%
Manufacturing 1.9% 0.2% -0.8% -2.5% 0.9%
Transportation/Public Utilities 3.4% 2.0% 2.9% -4.2% -3.2%
Wholesale Trade 4.6% 2.3% 2.1% -2.2% 2.2%
Retail Trade 5.1% 4.3% 2.2% -3.8% 0.1%
Finance/Insurance/Real Estate 5.8% 3.2% 1.6% -2.4% -1.9%
Services 3.1% 4.9% 4.3% NA NA
Government/Gov't Enterprises 2.1% 1.5% -0.4% 0.5% -0.7%
Total Nonfarm Employment 3.0% 2.6% 1.7% -4.8% -0.9%

*Based on SIC
Source: Bureau of Economic Analysis

Tables 7A and 7B compare the Corridor, State, and national industry mix derived from total non-farm employment since I-26 was completed. The employment share of corridor employment in Retail Trade remained consistent with the nation's while it lagged behind the South Carolina for all years stated. Manufacturing dropped a little every year from 1969 to 2011 showing a market trend. Employment in the I-26 corridor has historically been less Service-intensive than in the nation which has grown significantly since 1969. From 2000 to 2011, the Finance/Insurance/Real Estate industry has gained a percent or two showing a steady growth.

The strengths of industry sectors vary within the corridor. Manufacturing was most important in Spartanburg County, where it was responsible for 25.3% of nonfarm employment (compared to 11.8 in the I-26 corridor as a whole); this was down considerably from 42.9% in 1969.

Table 7A: Industry Sectors As Percent of Total Non-farm Employment: 1969-1989

Industry Sector 1969* 1979* 1989*
Corr. SC U.S. Corr. SC U.S. Corr. SC U.S.
Ag. Services/Forestry/Fishing 0.4% 0.5% 0.6% 0.6% 0.7% 0.8% 0.6% 0.8% 1.0%
Mining 0.1% 0.2% 0.8% 0.1% 0.1% 1.1% 0.1% 0.1% 0.8%
Construction 6.3% 5.7% 5.1% 6.4% 6.3% 5.4% 6.0% 6.6% 5.4%
Manufacturing 21.6% 31.6% 23.6% 19.2% 27.9% 19.6% 15.3% 21.7% 15.0%
Transportation/Public Utilities 4.2% 3.5% 5.5% 4.3% 4.0% 5.2% 4.1% 3.9% 4.8%
Wholesale Trade 3.5% 3.0% 4.7% 4.1% 3.8% 5.2% 4.0% 3.6% 5.0%
Retail Trade 11.7% 11.8% 15.4% 14.3% 14.5% 16.1% 16.8% 17.3% 16.8%
Finance/Insurance/Real Estate 4.9% 4.0% 6.8% 6.4% 5.2% 7.9% 6.8% 6.0% 8.0%
Services 16.9% 17.4% 19.2% 16.9% 16.4% 22.0% 21.2% 20.7% 27.6%
Government/Gov't Enterprises 30.4% 22.4% 18.2% 27.7% 21.1% 16.8% 25.0% 19.5% 15.6%

*Based on SIC
Source: Bureau of Economic Analysis

Table 7B: Industry Sectors As Percent of Total Nonfarm Employment: 2001-2011

Industry Sector 1999* 2009 2011
Corr. SC U.S. Corr. SC U.S. Corr. SC U.S.
Ag. Services/Forestry/Fishing 0.9% 1.0% 1.2% 0.5% 0.8% 0.9% 0.5% 0.8% 1.0%
Mining 0.1% 0.1% 0.5% 0.2% 0.2% 1.3% 0.2% 0.3% 1.6%
Construction 6.4% 7.0% 5.8% 10.5% 10.9% 10.9% 9.5% 9.8% 10.1%
Manufacturing 11.9% 15.9% 12.1% 15.2% 17.2% 14.2% 15.8% 17.7% 14.2%
Transportation/Public Utilities 4.6% 4.7% 5.0% 5.0% 4.9% 6.3% 4.7% 5.0% 6.5%
Wholesale Trade 4.2% 3.8% 4.7% 5.5% 5.6% 7.0% 5.8% 5.7% 7.1%
Retail Trade 17.6% 18.3% 16.7% 19.6% 21.0% 20.4% 20.0% 21.4% 20.5%
Finance/Insurance/Real Estate 6.7% 6.1% 7.9% 8.6% 8.2% 10.8% 8.5% 8.3% 11.0%
Services 27.3% 26.1% 31.9% NA NA NA NA NA NA
Government/Gov't Enterprises 20.2% 16.9% 14.2% 34.9% 31.2% 28.1% 35.1% 31.1% 28.0%

*Based on SIC
Source: Bureau of Economic Analysis

3.5 Business Establishments

The numbers of business establishments in each county along the I-26 corridor and for South Carolina are presented in Table 8. The Census Bureau defines an 'establishment' as "a single physical location at which business is conducted or services or industrial operations are performed." It is not necessarily identical with a company or enterprise, which may consist of one or more establishments. Before 1974, the Census Bureau used 'reporting units' as the unit of measurement. The definition of "establishment" has changed since it was first adopted in 1974, most significantly in 1983. Although reporting unit and establishment data are not directly comparable from year to year, they can be used to compare relative levels of economic activity in various communities because the definitional changes were uniformly implemented nationwide.

Charleston County has seen the most business establishment growth of the I-26 corridor counties and has the most establishments, followed by Richland County. Berkeley, Dorchester and Lexington Counties have seen the greatest business establishment growth in the last 40 years; all three counties saw dramatic growth in businesses. Orangeburg County saw a modest growth in businesses for the first three decades; while several counties saw an explosion of new businesses. From 2001 to 2008, Orangeburg County has experienced a drop in the number of businesses.

Table 8: Business Establishments: 1956-2008

Counties Reporting Units* Establishments*
1956 1969 1979 1989 2001 2008
Spartanburg 1,978 2,633 3,690 5,353 6,266 6,605
Laurens 481 579 678 814 889 957
Newberry** 483 465 545 622 725 762
Lexington 743 1,231 2,240 3,553 4,952 6,235
Richland 3,070 3,957 5,516 7,788 9,265 9,203
Calhoun 115 109 135 170 198 260
Orangeburg** 847 1,073 1,356 1,698 1,929 1,811
Dorchester 274 417 732 1,368 1,820 2,243
Berkeley 208 378 657 1,279 1,858 2,751
Charleston 2,915 3,759 5,644 8,486 10,520 12,156
SC I-26 Corridor 11,114 14,601 21,193 31,131 38,422 42,983
South Carolina 30,422 39,757 54,303 78,093 97,030 106,678

1.4 *Data are not comparable across all years because of definitional changes. In 1974, the Census Bureau changed from a "reporting unit" concept to establishment-based data. The definition of "active" establishments changed in 1983.
** Indicates counties that are classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Bureau of the Census, County Business Patterns.

3.6 Property Value Changes

Median home values are a measure of property values. Table 9 compares median values of owner-occupied non-condominium housing units in the I-26 counties and South Carolina from 1980 to 2009. Home values in half of the I-26 counties were above the State median values in all years. Charleston County homes exceeded the South Carolina rates in the 1980s, 1990s, and 2000s. Homes in Spartanburg, Laurens, Newberry, and Calhoun counties exceeded the State appreciation rates during the 1990s although their median values remained below the State average. Several of these counties appreciated from low base values and their appreciation rates have slowed considerably in the last decade.

Table 9: Median Value of Specified Owner-Occupied Non-condominium Housing Units: 1980-2009

Location 1980 1990 2000 2009 Compounded Average Annual Growth Rate
1980-90 1990-00 2000-09
Spartanburg $32,200 $54,200 $91,100 $115,600 5.3% 5.3% 2.7%
Laurens $27,100 $44,700 $74,800 $93,000 5.1% 5.3% 2.4%
Newberry* $27,700 $49,200 $78,000 NA 5.9% 4.7% NA
Lexington $44,000 $74,900 $106,300 $140,400 5.5% 3.6% 3.1%
Richland $43,100 $71,200 $98,700 $155,000 5.1% 3.3% 5.1%
Calhoun $28,600 $45,000 $72,500 NA 4.6% 4.9% NA
Orangeburg* $29,400 $50,500 $72,600 $81,800 5.6% 3.7% 1.3%
Dorchester $45,600 $73,600 $104,600 $176,900 4.9% 3.6% 6.0%
Berkeley $41,900 $68,500 $91,300 $146,600 5.0% 2.9% 5.4%
Charleston $41,300 $73,800 $130,200 $244,300 6.0% 5.8% 7.2%
South Carolina $35,100 $61,100 $94,900 $137,500 5.7% 4.5% 4.2%

Data for jurisdictions that exceeded the national median are in bold typeface.
* Indicates counties that are classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Bureau of the Census

4 Economic Development Trends

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 1999, non-farm employment in the I-26 counties grew from 442,896 to 912,440, or 106%. In a parallel group of counties to the south of I-26, employment grew from 270,000 to 523,000, or 94% from 1969 to 2002. 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. Two of these industrial parks have been built. Neither, however, is directly on I-26.[8]

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 corridor for business. Other than that stretch of I-26, the land along the Interstate in Laurens County is mostly wooded.

In the 1980s and 1990s, Spartanburg County recruited about 30 to 40 international companies that established operations around I-26 and I-85. These included a 1,150-acre BMW vehicle 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 sport utility vehicles (SUVs) directly in the U.S.; the plant also manufactures all of BMW's SUVs that are sold worldwide. It was the number of accessible transportation facilities and access to a majority of BMW's primary United States markets that made Spartanburg a strategic location.

In the 1990s, 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. Newberry County Economic Development 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 1960s and 1970s. The Northwoods Mall was constructed around I-26's Ashley Exit back in 1969. At that time, it was atypical to site a mall 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 2.6 million square-foot plant in 2004 that currently employs 6,000 people. Charleston's economic development manager partially attributes the arrival of this and other businesses to I-26.

I-26 is estimated to have produced 30,800 jobs within the counties that it passes through from the construction completion date of 1969 and a post-study date of 2002[9].

4.1 Charleston Area: Seaport & Westward Growth

The economic development manager for Charleston County refers to I-26 as the region's "jugular vein."[10] The Charleston area is located on an Interstate cul-de-sac or "dead end." I-95, the next-closest long-distance Interstate, is nearly 50 miles away. (U.S. 17 also provides four-lane highway access to the region.)

The Port of Charleston is a major force driving the Charleston economy. Economic development agencies throughout the State tout the port as a reason to locate factories and distribution centers in their communities. Residential and tourism-related land uses are competing with port and industrial uses near downtown Charleston. In other urbanized areas, residents object to port expansion. Consequently, port cargo-processing activities are being displaced to inland locations like Greer. The Port of Charleston both contributes to and suffers from congestion on local highways. Since rail facilities are less developed in Charleston than in competing ports, a higher percentage of cargo to and from the port is moved on highways than at other ports.

The Port of Charleston's closest competitor is the Port of Savannah in Georgia. Charleston tends to focus on trade with Europe; Savannah's trade is oriented toward East Asia. Savannah is located much closer to I-95 than Charleston, but its local labor market is tighter and land prices have rapidly increased. Jacksonville, on the gulf coast, is a much smaller container port than Charleston and is heavily dependent upon trade with Puerto Rico. The ports Norfolk/Hampton Roads and Baltimore to the north are considered to be in a different maritime market than the Port of Charleston.

Two proposed I-26 projects relate directly to economic development. A direct connector between a container terminal and I-26 may be built to keep trucks off of local roads. I-26 may be realigned in the area north of downtown Charleston to facilitate redevelopment of adjacent parcels.

I-26 is behind the building boom that has occurred in the past thirty years in Berkeley and Dorchester counties northwest of downtown Charleston. Arterials that intersect with I-26 have been upgraded in the past decade, spurring development. Growth has been especially strong in Summerville, near the I-26/U.S. 78 interchange, which was renovated in recent years. The Piggly Wiggly Carolina Company grocery store chain opened a 650,000 square foot distribution center at Exit 194 in Summerville/Jedburg in 1999. The adjacent Jedburg Commerce Center, a 210-acre industrial park with as much as 2 million square feet of new industrial space, is under development. In the early 2000s, a site in Summerville was a finalist for a Daimler Chrysler van assembly plant. In 2002, Daimler Chrysler announced that the facility would be constructed in Pooler, Georgia at the I-16/I-95 junction, but that plan was cancelled in 2003. Daimler divested itself of Chrysler in 2007, and since 2007 has assembled the Sprinter van in Ladson, South Carolina.

In 2004, debate raged in western Berkeley County over the zoning of land along I-26 between the Cypress Campground Road crossing and SC 27 (Exit 187). Owners want to re-zone miles of rural highway frontage to permit industrial development; opponents argue that existing industrial parks should be filled first and express fear that industrial zoning would eventually cause the I-26 corridor to resemble the heavily-developed I-385 in the Upstate region.[11] The potential for development at Exit 187 and its associated property tax revenue has re-kindled a long-standing boundary dispute between Berkeley and Dorchester counties.[12]

The Charleston economic development manager observed that South Carolina has re-formulated its economic development strategy in the past decade, shifting from the "branch plant" model to the "value" model. In the past, the State "chased smokestacks" by attracting industry based on low taxes, cheap land and power, and management-favored labor policies. International trade agreements and related "off-shoring" of manufacturing have undermined South Carolina's campaign to attract and retain branch plants. Now the State promotes the "value" contributed by its skilled and productive workforce.

4.2 Orangeburg County: Undeveloped Crossroads of I-26 & I-95

The I-26/I-95 interchange is perhaps the most under-developed junction of primary Interstate Highways in the Eastern United States. Development of sites adjacent to the junction is constrained by the lack of utility service and freeway access. The Orangeburg County Development Commission (OCDC) is targeting the triangle formed by I-26, I-95, and U.S. 301 as a locus for intensive future development.[13]

U.S. Representative James Clyburn has advocated that an intermodal center or inland port be constructed near the I-26/I-95 junction.[14] Containers to and from the Port of Charleston would be processed there, instead of in the Charleston area where real estate costs are higher. If the inland port were built, then retail distribution centers would likely locate in the vicinity. The $300-per-container drayage cost (the cost of moving from the port to the processing location) from Charleston seems a hindrance for the inland port, but backers argue that shippers would have small or no net expenses because most already traverse I-26 to and from the port. Orangeburg's proximity to the port inspired an importer of garden patio furniture to locate a distribution center in a former textile mill in Rowesville along U.S. 21 in 2003.

Another freight transportation economic opportunity for Orangeburg concerns outbound truck traffic from Florida. Since Florida has a tremendous imbalance between large volumes of consumption and small volumes of production, many empty trucks pass northward and westward through Orangeburg County. Distribution centers may be lured to the I-26/I-95 junction to take advantage of low "backhaul" truck rates.

Extension of infrastructure to the I-26/I-95 is feasible only if a major project such as an inland port or large retail distribution center locates there, according to the OCDC director. Once the infrastructure is in place, developers would more likely construct speculative buildings there, including one million square-foot structures. Smaller commercial buildings would follow.

As the proposed site for an auto assembly plant in Summerville succumbs to residential and commercial development, Orangeburg is positioning itself as an alternative location. It is touting a 1,400-acre site on the north side of I-26 between SC 33 and U.S. 301.

The OCDC executive director said that I-26 ought to be widened to six lanes in Orangeburg County to ease congestion, facilitate corridor development, and to evacuate the coast more efficiently during hurricane emergencies. According to him, I-26 serves as the de facto extension of I-77 from its southern terminus in Columbia to I-95. He said that traffic volume of I-26 through Orangeburg County increased significantly after I-77 was constructed.

Despite all this, the lack of water and sewer service has restricted highway-side development elsewhere in Orangeburg County. Installation of this infrastructure appears to be the catalyst which draws businesses to the county's freeway interchanges. Until the late 1990s, the only two Interstate interchanges that had significant development, I-26/U.S. 601 (Exit 145) and I-95/Santee (Exit 98), were also the only ones linked to water and sewer systems. Water and sewer lines have since been laid to the I-26/SC 33 (Exit 149) and I-26/U.S. 301 (Exit 154B) interchanges. In 2005, a 12-inch potable water main was installed at I-26 (Exit 159) and provided development opportunities around the area. The Orangeburg Industrial Park has attracted four companies to its site at the I-26/U.S. 301 interchange since it opened in 1999.

Sites along I-26 are more developable than along I-95 because I-26 is on higher ground through most of the county. The OCDC director says that the opening of I-95 had a detrimental effect on the U.S. 301 corridor in Orangeburg County, where the "carcasses" of bypassed hotels, restaurants, and service stations remain.

In the 1980s, the Food Lion grocery store chain opened a 1.1 million square-foot distribution center in Elloree, several miles from I-26 and I-95 in Orangeburg County. Construction began nearby in 2001 on Blackwater, a 650-acre golf and waterfront community on the shore of Lake Marion; it advertises its proximity to I-95.

4.3 Columbia Area: New Beltway & Expanding Commutershed

The I-26 corridor northwest of Columbia has developed rapidly since the highway's completion. Irmo and its vicinity have experienced large population growth, driven in part by the reputation of the public school system. The I-26/Harbison Boulevard interchange has evolved into one of the region's major retail centers. Columbiana Centre, one of four shopping malls now operating in the Columbia area, opened there in 1990. The town of Harbison was once part of the U.S. Department of Housing & Urban Development's "new town" program. The population of Chapin, a tiny town located about 20 miles northwest of downtown Columbia along I-26, doubled during the 1990s to 628.

The vicinity of Columbia Metropolitan Airport is also growing. A new expressway is under construction between I-26 and the airport. In 1996, the United Parcel Service opened its Southeastern Regional Hub at the airport; it is one of the company's six hubs nationwide. In the mid-1990s, a major postal sorting facility was constructed in Cayce at the I-26/I-77 junction.

I-77, the Southeastern Beltway, was completed in June 1995, causing Columbia-area developers to shift their attention to that corridor. In the mid-1990s, much new construction occurred in northeast Columbia near the new sections of I-77. New stores opened along Forest Drive near the highway, including the first Wal-Mart supercenter in the State.

4.4 Laurens County: Tale of Two Highways (I-26 vs. I-385)

The I-26/I-385 junction is located in Laurens County, which bills itself as the "Gateway to the Upstate." A cluster of highway service businesses (hotels, fast food) is located at Exit 52, the first interchange east of the junction. The local Chamber of Commerce president says that the I-26 corridor in Laurens County has "lots of potential" if water and sewer pipes are laid to the highway.[15] Infrastructure is now being extended to the main exit to Clinton (Exit 54), where an industrial park and a new hotel are planned. This may be the catalyst that causes Clinton to grow towards I-26.

The corridor along I-26 from the junction with I-385 to Spartanburg has not been developed. In contrast, I-385 has been the locus of considerable new construction in the Greenville area. The town of Simpsonville on I-385 in Greenville County experienced 22% population growth in the 1990s. Most of the growth in Laurens County is due to spill-over of the Greenville area development across the county line. Three industrial parks, Woodfield, Hunter, and Owens, are on I-385 in Laurens County. Woodfield Industrial Park, almost filled, is near the Greenville County line.

Newberry County is also on I-26 between Columbia and Spartanburg. The Newberry Industrial Park is a small facility located on I-26 at SC 219. It is presently the only industrial park between Columbia and Spartanburg (another will soon be built in Clinton).

Lack of Interstate Highway access has not been a significant deterrent to economic development in at least two Piedmont counties that neighbor Laurens. To the East is Union County, which has attracted distribution centers as its textile mills continue to close. The Walt Disney Company built a 500,000 square-foot facility on U.S. 176 in 1998. In 2004, the Dollar General retail chain announced construction of a distribution center in Union County. To provide better access to I-26, local officials advocate construction of a 29- to 42-mile long Interstate Highway connector from I-26 near Walnut Grove Road to I-85 in Cherokee County or widening of SC 295.[16] Greenwood County, to the west of Laurens, attracted the North American manufacturing headquarters of Fuji Photo Film in 1988.

4.5 Spartanburg Area: I-85 Dominates

Connecting Upstate South Carolina to Atlanta, Charlotte, and points beyond, I-85 is the dominant highway in the Spartanburg area; the industrial Midwest is reached via I-85 and I-77.[17] I-26 is important as the link to the Port of Charleston, but the corridor around it remains underdeveloped because of the lack of water and sewer infrastructure at many interchanges. The president of the Spartanburg Economic Development Corporation says that infrastructure is "more accessible" in the I-85 corridor through the county.[18] The EDC recruits manufacturing firms because they "create a dollar instead of passing a dollar around" and attributes its success to a variety of factors, especially favorable transportation and labor conditions. "Once the momentum gets going, it carries itself," the EDC representative observed. Highway conditions are especially vital to modern manufacturing because "just-in-time" inventory systems depend upon ease of truck movements.

Development along I-26 to the west of I-85 tends to be oriented toward manufacturing and distribution enterprises. Most businesses to the East are commercial, such as West Gate Mall at the I-26/U.S. 29 junction. I-26 runs to the west of downtown; the new routing of I-85 north of downtown opened in 1995, opening potential building sites there.

Paul M. Dorman High School, one of the State's largest schools with an enrollment near 2,500 students, recently relocated to a larger campus in Roebuck near the I-26/U.S. 221 interchange (Exit 28). Economic development officials predict that residential growth will follow the new school along the I-26 corridor south of Spartanburg.

4.6 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 across the U.S. and from overseas because of relatively low rates of unionization, 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 electrical connections. Furthermore, 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. There 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.

4.7 Retail Sales

Table 10 shows retail sales in 2007. The rural counties of Laurens, Newberry and Calhoun had the least retail sales in 2007. In these counties total sales at gasoline stations was a large portion of their retail sales; by percentage, they are much higher than that of South Carolina. Many of these sales are a direct result of I-26, a major freight and passenger route, running through these counties. While Orangeburg County appears to have a less-robust economy - based on a declining population and higher employment - the placement of industrial parks and other businesses in the county took advantage of lower property values has produced significant amounts of retail sales. Motor vehicles and parts ranged from 17-28% of retail sales (excluding Calhoun) and other sales is the third category of major retail purchases for all counties in the I-26 corridor. Charleston County had 28% of total retail sales in the corridor.

Table 10: Retail Sales 2007

  Motor Vehicle & Parts Dealers Bldg. Materials, Garden Equip., & Supplies Food & Beverage Stores Gasoline Stations General Merchandise Stores Other Sales Total Sales
Spartanburg $930,964 $302,323 $447,114 $594,518 $594,413 $769,074 $3,638,406
Laurens $79,888 $13,612 $77,871 $92,609 $52,716 $53,362 $370,058
Newberry* $80,606 $42,074 $32,060 $110,616 NA $104,505 $369,861
Lexington $860,973 $300,221 $436,103 $502,505 $686,792 $879,496 $3,666,090
Richland $1,232,708 $464,221 $516,307 $554,732 $583,704 $1,015,986 $4,367,658
Calhoun $1,343 NA NA $44,672 NA $20,821 $66,836
Orangeburg* $176,169 $76,694 $119,261 $291,911 $147,272 $195,731 $1,007,038
Dorchester $187,063 $68,353 $179,584 $197,117 $114,022 $133,388 $879,527
Berkeley $302,346 $181,446 $154,783 $264,669 $362,692 $286,330 $1,552,266
Charleston $1,633,232 $640,095 $769,741 $588,726 $912,961 $1,776,237 $6,320,992
I-26 Corridor $5,485,292 $2,089,039 $2,732,824 $3,242,075 $3,454,572 $5,234,930 $22,238,732
South Carolina $12,134,995 $5,134,910 $7,047,588 $8,850,126 $8,621,073 $12,509,718 $54,298,410

* Indicates counties that are classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: 2007 Economic Census

4.8 Hotel Taxes

Table 11 shows revenues from hotel taxes. Measuring hotel taxes is a useful economic indicator because of the relationship between hotel tax revenues and tourism and business volumes within the State economy. Over the last five years, hotel industry revenues and tax revenues in South Carolina peaked in the 2007-2008 season. Then, as happened nationally, hotel revenue declined significantly in 2008-2009. The rate of this decline was greater on the I-26 corridor in 2008-2009 than it was in South Carolina, The decline continued in 2009-2010, but was much less dramatic on the I-26 corridor that the State as a whole. In 2009-2010, only Richland County saw a return to growth in hotel revenues, while the counties of Dorchester and Lexington continued to experience declines. While Richland saw an increase in hotel stays, Charleston did not; however, Charleston remains the largest source of hotel tax revenues.

Because of the tourist attractions within the Charleston area, Charleston County has more hotel visitors than any other county, followed by Richland County outside of Columbia. In addition, the Charleston region has a major trade port and is only 115 miles from the State capital of Columbia. Both will receive many tourists and business travelers from within and outside the State of South Carolina. Collectively, the I-26 corridor receives about a third of all of the State's hotel tax revenue.

Table 11: Occupancy Tax Revenue from 2004 to 2010

County 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Charleston $7,161,463 $7,972,780 $8,741,248 $9,675,877 $8,729,225 $8,426,765
Dorchester $146,611 $149,617 $131,853 $134,674 $114,931 $103,046
Lexington $632,119 $737,757 $819,370 $839,100 $740,302 $639,472
Richland $1,664,960 $1,915,221 $2,061,153 $2,301,041 $2,165,872 $2,194,951
Spartanburg $604,641 $685,912 $689,691 $724,809 $663,466 $639,007
I-26 Corridor $10,209,794 $11,461,287 $12,443,316 $13,675,501 $12,413,797 $12,003,241
South Carolina $35,248,058 $39,157,739 $41,625,725 $43,958,149 $40,583,003 $38,571,660

Source: South Carolina Department of Revenue

5 I-26 Summary

Interstate 26 ties South Carolina's three largest cities together. It was mostly completed by 1964, and completed in Charleston County by 1969. Since the late 1980s, major intersecting highways have been constructed in Charleston (I-526/Mark Clark), in Columbia (I-77/Southeastern Beltway), and in Spartanburg (the new I-85 route). I-26 is an important commuter route in the Charleston and Columbia areas, spurring residential development. The major freight traffic generators in the corridor are the Port of Charleston and the State's industrial center in Greenville-Spartanburg. Lack of water and sewer service has hampered development in many areas of the I-26 corridor, most significantly the junction of I-26 and I-95. Now infrastructure is being installed at more interchanges, allowing the corridor to more fully achieve its economic development potential.


[1] Carolina Highways (1977), p. 36.

[2] The "new" I-85 in Spartanburg qualified for Interstate Highway funding through a loophole in Section 139 of the Surface Transportation Assistance Act of 1982. See www.fhwa.dot.gov/infrastructure/boombelt.cfhtm.

[3] National Highway System Designation Act of 1995 (P.L. 104-59).

[4] "Sanford still opposed to I-73 ending near Charleston," The State (Columbia, S.C), August 2, 2003.

[5] South Carolina DOT, "Interstate 73 Environmental Impact Study." Retrieved from www.i73insc.com in June 2011.

[6] Center for Business Research, Charleston Metro Chamber of Commerce, "Charleston Metro Area Visitor Industry Impact Overview."

[7] South Carolina Statistical Abstract 2004, Table 11 (South Carolina Cash Receipts from Timber Harvests by County).

[8] Orangeburg Chamber of Commerce. orangeburgchamber.com/business-resources/economic-dev/economic-development

[9] EDRGroup SHRP C03 Project case research and interviews

[10] Steve Dykes, Economic Development Manager, Charleston County, June 24, 2004 telephone interview.

[11] Warren Wise, "Berkeley land-use plan stirs debate," Post & Courier (Charleston, S.C.), May 10, 2004.

[12] Warren Wise, "Berkeley seeks end to boundary dispute," Post & Courier (Charleston, S.C.), November 22, 2003.

[13] Hal Johnson, Executive Director, Orangeburg County Development Commission, telephone interview on July 19, 2004.

[14] Congressman James E. Clyburn, "An Inland Port Provides Viable Option for S.C.," Press Release, July 13, 2001.

[15] Marvin Moss, President/CEO, Laurens County Chamber of Commerce, telephone interview on July 20, 2004.

[16] Tony Taylor, "I-26, I-85 link under study by state DOT," Spartanburg Herald Journal, February 11, 2003.

[17] See http://www.fhwa.dot.gov/infrastructure/boombelt.htm.

[18] Carter Smith, President, Spartanburg County Economic Development Corporation, telephone interview on July 19, 2004.

Updated: 08/19/2013
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