Topics/Categories

Get The Nerve in your in-box every weekday morning!

Nonprofits Cheer Defeat of Economic Incentives Bill

It looks like Gov. Mark Sanford will not have to help decide the fate of legislatively inspired subsidies for a Lowcountry retail development after all.

Senate bill 1054, which could have paved the way to taxpayer handouts to aid the Florida-based Sembler Co. or another retail developer, has died – ground up in the sausage-making factory of the State House.

"Short story – it got caught up in the red tape of the legislative process," Sen. Clementa Pinckney, D-Jasper and chief sponsor of the bill, told The Nerve on Friday. "That’s really what happened – end-of-session (maneuvers)."

Pinckney provided his assessment of the bill’s status less than 24 hours after the General Assembly closed out three days of tying up loose ends from the regular legislative session that ended June 3.

Heading into last week, the House and Senate had approved different drafts of the bill. In order to pass it, the two chambers needed to concur on a compromise version as part of their wrap-up work.

But they declined to do so, instead consigning S. 1054 to a dust bin runneth over with bills that lawmakers introduced, amended and debated but ended up not passing this session.

The Legislature plans to reconvene Tuesday for the final time this year because some end-of-session business remains unfinished. But under a resolution lawmakers adopted to govern that process, they cannot take any additional action on S. 1054.

Three other sources, including Senate assistant clerk Michael Hitchcock, confirmed that the retail incentives bill is dead.

"And we’re thrilled, of course," says Andrea Malloy, a project manager with the Coastal Conservation League, one of the most prominent environmental groups in South Carolina.

The Coastal Conservation League was part of a coalition of nonprofits that fought the bill.

The other organizations were the South Carolina Association of Taxpayers, the state chapter of the Club for Growth and The Nerve’s parent, the South Carolina Policy Council.

It was an usual alliance of environmentally conscious and fiscally conservative interests. But, with help from a key legislative ally in Republican Sen. Tom Davis of Beaufort, the opponents succeeded in stopping the bill.

Sen. Greg Ryberg, R-Aiken, also supported their effort.

Defeating the bill was no layup, as the Sembler Co. hired a cadre of Columbia insiders to try to get it through the Legislature – lobbyist Larry Marchant and attorney Burnie Maybank among them. Maybank is chairman of the Tax Realignment Commission, a legislatively created panel charged with studying and recommending reforms to the state tax code.

The question now is: What happens next, both with the retail incentives proposal and the prospect of a development that it would have subsidized?

It isn’t clear.

Although the bill is dead, it could be reintroduced next year.

Meanwhile, Sembler seems to have lost interest in the matter, but another company might go forward with a project in its place.

In its original form, the legislation was designed to channel millions of dollars in state sales tax rebates to Sembler to subsidize Okatie Crossings, a giant, upscale shopping mall the company aimed to build on the Jasper-Beaufort counties line.

The site of the would-be project, some 280 acres, is off Interstate 95 near the towns of Hardeeville and Bluffton, not far from an established retail shopping corridor. It is in a region with high rates of poverty and joblessness and little economic development, a dearth of opportunity that traces back decades.

Still, to the coalition, the prospect of South Carolina subsidies for an out-of-state company to compete with existing businesses provoked visceral opposition.

And to the Coastal Conservation League, the mall represented a potential death blow to a fragile, pristine watershed in that area. Indeed, from the league’s perspective the bill was tantamount to making state taxpayers accessories to a crime.

"And we were really pleased to have an opportunity to work with fiscal conservatives to point that out," Malloy says.

The bill failed to pass even after it was radically reworked. In the revision, the state subsidies were replaced with a provision to allow a local government to impose a sales tax within a retail development to pay for public infrastructure to support the project.

Had the modified version passed, it would have created a philosophical quandary for Sanford, because he opposes tax increases but generally defers to home rule.

Looking ahead, Pinckney told the Hilton Head Island Packet, "I will be working to start over next year."

Likewise, Malloy says, "We will continue to watch this next year."

Two messages left at the Sembler Co.’s St. Petersburg, Fla., corporate office for Greg Sembler, chief executive officer of the company, were not returned.

As the bill was struggling in the Legislature, the firm reportedly allowed an option it had to buy most of the land for Okatie Crossings from Tennessee-based Horne Properties to expire.

The Sembler Co. also withdrew a permit it had obtained to fill several acres of wetlands during construction of the mall, according to Malloy and other sources.

Two messages left for Horne Properties owner Doug Horne, whom the Island Packet reported saying his company plans to develop the land itself, were unreturned as well.

Reach Ward at (803) 779-5022, ext. 117, or eric@scpolicycouncil.com.

Accountability General Assembly Incentives Legislation Transparency