Buy a home at a reasonable rate with a VA loan in Eastover, SC

After months of construction and repairs, Eastover's water is finally safe to drink again.

EASTOVER, S.C. — A bit of relief for many in Eastover after months of concerns over their water quality.

Bruce Edwards, a resident of Eastover, describes the headache he faced when the town was having water issues in late 2022

"They were handing out flyers saying boil the water because something was wrong with the system, low pressure, sometimes the water was off, " he said.

According to Eastover Mayor Philip Gunter, during the colder months, the town saw around 20 different leaks on water mains in the town

"The system was kinda dirty, so we had to a lot of hydrant flushing, " said the mayor.

Those issues got SCDHEC attention.

An enforcement order from December claims a team from DHEC rated the town 'unsatisfactory' for drinking water and said it 'needed improvement' in areas such as protection from contamination and source quality.

Gunter says it's been a team effort trying to improve those scores.

In a Thursday DHEC board meeting, members touted a recent EPA survey that gave the agency good marks for South Carolina's water quality.

Gunter says the town's water quality is back to DHEC's standards.

"They did their job, they wanted us to do our job as well and let it be known that it's serious out there." He says, "The water is pretty good right now, we've had a lot of success with the water."

Gunter adds crews have been working hard since the winter to get back on track.

"Making sure the line pumps and different things like that are working properly. During the winter storm things like that burst and got destroyed, some parts got broken, pipes got broken, all inside the well. I can say we're about 90%, we still got some really small things that we got to work on that's going to take some outside help to come in," said the mayor.

Edwards admits he is still a bit weary of the tap water, but for Mayor Gunter, consuming the town's tap water is something he does daily.

"I trust the water, I drink the water."

The money comes as part of the American Rescue Plan Act supporting communities around the nation following the pandemic.

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RICHLAND COUNTY, S.C. — More than $300,000 will go to the Town of Eastover as part of the American Rescue Plan Act (ARPA) supporting communities around the country.

Over the last few months, News19 has spotlighted how cities and towns are using their share of millions distributed around the country as part of the Act.

Like many communities, Mayor Phillip Gunter said Eastover has received half of its funds. The town is expecting roughly $330,000 in total.

"It means a lot for the town," Mayor Gunter said. "We really need it to uplift our water system for safer water for the community... also to help out with some of our infrastructure."

RELATED: Pot of money up for grabs for nonprofits, small businesses in Richland County

He says they've already started spending the money on water and sewer projects, including improvements to the town's water tower, but there's still a lot more to do to revitalize the rural community, which has fewer than 1,000 residents.

"We had everything when I was a little boy, you know?," Mayor Gunter said. "The video store, the bank was there then, the little grocery store we had.... So, I just want to see those things come back to Eastover."

They're petitioning the state for additional dollars to continue making improvements with a focus on downtown developments.

"We need that grocery store; we need a laundry mat," Gunter said. "So, those are the kind of things that I'm really trying to concentrate on.... Painting of buildings and those kinds of things."

RELATED: DHEC to study disaster response in Columbia's Lower Richland community

Mildred McMillian spent her life in Eastover and says she's excited for the opportunity to see the community improve.

"Just helping the town out, so it can be just like some of the other places around here... that this town become a little more beautified than it is," McMillian said. "It's just like a family over the whole town. Everybody getting along together....They're trying to do the best they can in this town."

The mayor says he's also working with Richland County to try to bring a new sheriff's department substation, strengthening available services for residents.

Digital communications have already sifted away demand for printer and copier paper over the last couple decades. Coronavirus shuttering offices accelerated that trend.

For that reason, International Paper is slicing so-called free sheet paper production from its balance sheets in the second half of 2021, including the company's Eastover Paper Mill near Columbia.

Eastover and several other mills will fall under a new spinoff company that will be run by International Paper's senior vice president of industrial packaging. But beyond a boost for stockholders, major changes are unlikely at legacy paper giant's largest mill.

International Paper will transfer shares of the new company to its stockholders and will retain its own ownership shares in the new, free-standing company, which it estimates will have $4 billion in annual sales.

The company said it is not planning any operational changes for the nearly 40-year-old mill that employs 700 workers in Richland County.

The company's other South Carolina mill in Georgetown, which produces more specialized products, including the paper sticks used in cotton swabs and the paper backing to adhesive labels, will remain under the International Paper banner.

CEO Mark Sutton said on an investor call this month that turning the printing papers segment into a standalone company would create more value by keeping the company focused on cardboard and fluff pulp, the absorbent material used in diapers and other goods.

But the move had analysts speculating about the future of what International Paper calls SpinCo, the copy paper spinoff, with several saying the move makes it a more likely acquisition target. Mark Wilde, an analyst with Bank of Montreal, said he doesn't know what will ultimately happen to SpinCo.

"But the Eastover Mill itself will probably be running for quite a while," he said, even if it changes hands. That's because the facility is International Paper's largest and most cost-effective.

The pandemic has brought on declines up to 30 percent in the printing and writing paper segment. Before that competition was already heavy between manufacturers, said Patricia Marques, a paper industry consultant with Fisher International who also spent 15 years working for International Paper.

"Companies are playing the last man standing strategy," Marques said. "The ones that survive are the ones that have very low cost."

By Sutton's estimates, Eastover is one of the top three free sheet mills in North America.

"Eastover is probably going to be one of the very last mills to make white paper," Wilde said, estimating it will still be producing a decade from now, whether that's for SpinCo or another owner.

In the United States, International Paper's Georgetown, Selma, Ala., and Ticonderoga, N.Y., sites make similar products. Abroad, there are three more in Brazil and one each in France, Poland and Russia.

Georgetown County Economic Development Director Brian Tucker said, based on his conversations with International Paper, he expects the mill to operate well into the future. With about 750 employees, the mill is Georgetown County's largest employer.

One analyst's thoughts about the Georgetown mill are that it's a bit more up in the air.

That's because the bulk of production at Georgetown is in fluff pulp and it is possible International Paper could choose to exit that business, Wilde said. The company has struggled to make its large investment in the sector profitable despite a number of initiatives to improve performance.

All of the major paper companies — International Paper, Domtar and Packaging Corporation of America — are facing the same decline issues and are making similar decisions when it comes to adapting for the future. Most are turning to cardboard boxes used by e-retailers, like Amazon, an industry sector that the pandemic has sent booming.

Packaging Corp. has converted mills in Jackson, Ala., and Pensacola, Fla. to cardboard box production.

Domtar has opted to either close mills, like its million-ton Portland, Ala., operation, or convert mills, like its Bennettsville operation, to fluff pulp or container board.

Georgia Pacific, once the fourth-largest paper company, shuttered all of its paper operations in 2019.

"White paper is a shrinking market and over time there's going to be more consolidation and more mill closures or conversions," Wilde said.

And the pandemic is forcing decisions now rather than companies holding out a few more years.

"I think most companies assume, even as we get a vaccine, they’re probably not going to recover all the volume they've lost," Wilde said. "That's because, even when we go back to work, our habits probably changed quite a bit."

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International Paper came to Eastover in 1999 when it bought out industry competitor Camp Union for $5 billion and inherited its property. With 700 workers, the paper mill alone could employ almost everyone living in the small Midlands town.

Hoping to maintain the company’s presence, Richland County recently extended an agreement to the paper maker, giving it another decade worth of tax breaks in exchange for $175 million worth of equipment investments.

It’s a practice that economic developers say is becoming more commonplace for a number of counties across South Carolina as more of these companies run through their original incentive periods.

“Sometimes it’s easier to keep what you’ve got than trying to bring in something new,” says John Truluck, director of economic development for Dorchester County in the Lowcountry.

The ability to extend these agreements, called “fee-in-lieu of tax” arrangements, was made possible by state lawmakers about a decade ago. It’s rearing its head a lot more today, compared to five or 10 years ago, because more of those original deals are now expiring, says Burnie Maybank, a tax attorney and former director of the state Department of Revenue.

When they expire, a company’s property tax bill can shoot up to the highest in the country, Maybank says.

South Carolina sets its corporate tax rate for manufacturers around 10 percent but many fee agreements made by counties back that down to 6 percent, or even 4 percent for the largest investors and employers.

Critics who decry the tax breaks often question their fairness, saying they shift tax burdens to smaller or existing businesses.

For Richland County, luring in International Paper has been among its largest successes, Maybank says.

“They’ve always had sort of a soft spot for (the company),” he says.

Other extensions granted by the county have been in exchange for much less investment, ranging from $3 million to $20 million, and include: Kemira, a chemical maker in Eastover; Colonial Life, a Columbia insurance provider; Amcor, a Blythewood plastics company; Spirax Sarco, a Blythewood valve manufacturer; and Mars Petcare, a Columbia petfood maker.

There was also one given to Tyson for a $9 million investment in its pork plant. That facility is now preparing to shutter in Richland County.

International Paper’s is the largest single capital investment announcement to come to Richland County since 2017.

When deciding on an extension, counties weigh how large a company is and the role they play in the community. Other factors include whether the business is planning to invest more and create jobs.

In International Paper’s case, it’s a matter of its sheer size, Maybank says.

The Eastover Mill manufactures freesheet paper, mostly used in printers and copy machines but also some personal hygiene products. This is a segment of the industry that has struggled greatly with the boom of electronic communication, says Patricia Marques, a paper industry consultant with Fisher International who also spent 15 years working for International Paper.

With the international coronavirus pandemic closing schools and offices, the printing and writing paper sector took an even bigger hit this year, leading to declines up to 30 percent. Before that competition was already heavy between manufacturers.

“Companies are playing the last man standing strategy,” Marques says. “The ones that survive are the ones that have very low cost.”

Mills that share a common owner are also competing with each other for investment dollars. Keeping costs down requires modernization. If a mill can’t argue for investment dollars, costs go up, their candidacy for future investments goes down and they’re ultimately shuttered.

International Paper’s mill in Georgetown, as well as those in Riverdale, Ala., and Ticonderoga, N.Y., make similar products and are therefore Eastover’s competition.

The last investment of real size by the company in its Eastover facility was $125 million made in 2005. Richland County’s incentive could help give Eastover an edge over the next decade.

Because the economic development community is tight-knit in South Carolina, Maybank says counties that are choosing not to extend agreements could gain a reputation that hurts them in attracting new industry.

In Dorchester County, Truluck says officials haven’t approved any extensions because companies with expiring agreements have not sought them to date. That’s likely, he says, because industry in his county arrived later than in other parts of the state, though the county did recently offer an extension in another way by allowing a company to include an upcoming expansion to help meet its investment goals.

In the Upstate, which has been South Carolina’s industrial engine for some time, starting with giants like BMW more than 25 years ago, these extensions are coming up more often. The German carmaker’s Spartanburg County facility had one approved in 2017.

“It’s all just sort of rolling in now,” says Kevin Landmesser, who conducts economic development in nearby Greenville County. Though he says he can’t recall which companies have made an appearance lately.

Landmesser says when recommending a company for an extension, economic developers evaluate a deal with a business mindset requiring both sides to see a benefit.

In the case of International Paper, Richland County economic development director Jeff Ruble says the deal came with the benefit of more investment by the company without further cost for services by the county.