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New Farmers Market: Costly Errors for All

The development of a new State Farmers Market has stretched into a years-long project fraught with mishaps that continue to cost taxpayers and create headaches for state government and two Midlands counties.

A lawsuit, a Legislative Audit Council inquiry, multiple delays, botched plans, action by the General Assembly, additional unnecessary costs – those are all consequences of the misadventure that is the new Farmers Market.
The Legislature’s move on the issue represents one of many efforts to clean up the mess.

In the form of joint resolution S. 1190, lawmakers approved a proposal that allows Richland County government to use revenue from its 2 percent hospitality tax on prepared food and drink to continue paying off a loan the county used to buy land for a new market.

After Richland had purchased that property, the state decided to build a new market in Lexington County instead. That left Richland with a site that had no purpose.

The joint resolution cleared the Legislature in late May, but Gov. Mark Sanford vetoed it. In a letter to legislators explaining his veto, Sanford characterized the resolution as bad policy.

"Asking taxpayers in Richland County, who have already spent enough of their hard-earned money on this debacle, to fork out more money to cover the misguided efforts that led to this failed venture we believe would be bad policy," he wrote.

And the governor criticized the entire project and process in strong tones.

"Unfortunately for Richland County, poor decision making on behalf of the (S.C.) Department of Agriculture, the General Assembly and even Richland County led the state to ultimately change its plans and relocate the new Farmers Market to a location in Lexington County instead," Sanford said.

The Senate overrode the governor’s veto on June 2 – meeting a two-thirds vote requirement with nary a vote to spare, 26-13 – and the House overrode it on June 16.

The vote margin in the House was much wider – 85-19 – but only after members of the chamber reconsidered a 50-51 vote they had taken the day before to sustain the veto.

Senate Finance Committee Chairman Hugh Leatherman, R-Florence, sponsored the resolution. It basically grants Richland County an exception to a requirement under state law that hospitality tax proceeds must be used for tourism-related purposes.

A new, $85-million, 175-acre State Farmers Market is under construction in the Lexington County city of West Columbia, on U.S. 321 adjacent to Interstate 26.

It could open in the near future, possibly within two weeks. But the new market originally was supposed to begin operating in February.

The delay could result in thousands of dollars in fines against the project developer, a limited liability corporation named 321 Lexington Associates LLC.

The possibility of fines surfaced in the Legislative Audit Council report, which was released in April.

An agreement between the state and the developer "requires the developer to pay the state significant financial damages for this delay, and we could find no reason why financial damages should not be imposed against the developer," the report says.

321 Lexington Associates LLC attributed its running behind to extended rain.

But while the private company could be made to pay for its delays with the project, taxpayers are the ones being left with the bills for the state’s and counties’ mistakes with it.

The state and Richland County began working on a plan to move the Farmers Market from its current Bluff Road location, across from Williams-Brice Stadium, in 2005. The county borrowed money to buy land near Interstate 77 for a new market as part of the plan.

Then the state changed its mind and decided to move the market to Lexington County.

That decision "was based primarily on vendors’ lack of support for the Richland County plan," according to the Audit Council report.

Richland County then sued the state and the Department of Agriculture for bailing on the plan.

In an agreement that settled the lawsuit, the county retained ownership of about 85 acres of the land and the rest of it, some 110 acres, was transferred to the S.C. Research Authority for development as a technology park.

The Research Authority is a state-owned research and development company created under legislation in 1983. The legislation says the Research Authority "is in all respects for the benefit of all the people of the state, for the improvement of their welfare and material prosperity, and is a public purpose and a corporation owned completely by the people of the state."

As seed capital, the S.C. Research Authority was granted 1,400 undeveloped acres and $500,000.
It is the lead coordinating organization in a pyramid plan for knowledge-based economic development in South Carolina hatched mainly by legislative leaders, SCRA officials and the state’s research universities.

"Both the state and Richland County asked us if we would be willing to be a party to the settlement of that (Farmers Market) lawsuit," Bill Mahoney, chief executive officer of the Research Authority, told The Nerve in an interview earlier this month.

For his part, Sanford said in his veto message that he thinks the best outcome for taxpayers would have been for the market to stay put.

The Audit Council, which acts as the financial watchdog of the Legislature, concluded as much in its report.

"We found weaknesses in the planning and execution of the State Farmers Market relocation that resulted in significant unnecessary expenditures and delays," the report’s conclusion says.

Continuing, it says, "A significant amount of state and county taxpayer funds was spent before securing firm commitments from vendors to locate at the Richland County site. More than $4 million in state funds was spent to clear the land, move power lines and conduct other site work before the state concluded that the location would not be viable."

The conclusion also notes that "both Richland County and state taxpayer funds were spent to settle a lawsuit that ensued over the termination of their agreement."

Reach Ward at (803) 254-4411, or eric@scpolicycouncil.com.

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