Columbia’s No Free Market Haven, Some Business Owners Say

April 12, 2012

Investigative Reports

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ColumbiaThe city of Columbia doesn’t so much have a reputation for being anti-business as it seems to be intent on trying to pick winners and losers in the marketplace.

That, inevitably, creates an environment which discourages entrepreneurship, according to some business owners.

“Just look at the way Wal-Mart has been treated,” said advertising executive Kevin Fisher, referring to a plan by the mega-retailer to build a $35 million shopping complex along Assembly Street, at the site of Capital City Stadium near the old Olympia mills.

“Here you have the world’s largest retailer, and it wants to develop an overgrown weed field and a rundown baseball field into a major shopping center – and they don’t want a dime from the city,” he said. “They want to invest millions of dollars, create thousands of jobs and help with flooding problems in the area, all with money out of their own pocket.

“And how hard are we making it for them? As hard as possible,” added Fisher, a vocal critic of city government. “We put up road block after road block after roadblock.”

The Capital City has a curious record when it comes to economic development. Consider the following:

The Columbia MSA has an unemployment rate of around 8 percent, yet its City Council has blocked or retarded several projects that would have brought jobs to the area, including the $26 million Five Points South proposal a few years back, in addition to Wal-Mart’s plans for Assembly Street.

Columbia doesn’t just make life hard for big companies, either. Witness efforts to change or ignore regulations in the case of Taboo, the adult store that recently opened on Devine Street despite efforts by City Council to keep it from doing so.

There’s also the case of street vendor David Roberts, who was prevented from operating a taco cart for more than year across from the State House at the corner of Main and Gervais streets, despite being in compliance with the law.

Eventually, the city allowed him to move to a less-trafficked site last year.

Ultimately, a lack of leadership is at the heart of the problem, according to Fisher.

“The problem is that if five people show up at a council meeting to protest something, City Council always folds,” he said.

“It’s a continuing problem and it didn’t start yesterday,” Fisher added. “It goes back over two decades, and it’s going to remain a problem until we get some serious public officials who are willing to make a plan and take a stand, and get some things done right.”

Columbia Mayor Steve Benjamin could not be reached Wednesday for comment for this story.

Yet, for some businesses, the city offers an inviting teat from which to suckle.

Last month, Columbia began doling out “façade grants,” money to businesses to enable them to refurbish their structures.

Grants ranged up to $20,000, with businesses required to put up a 20 percent match, according to Tina Herbert, director of business operations for the city of Columbia. That means a business seeking a $20,000 grant had to put up $5,000 of its own money.

In all, the city allocated $430,000 for façade grants, with the money coming from a U.S. Department of Housing and Urban Development program.

The grants were focused on the Columbia Business Improvement District, the 36-block area bounded by Gervais, Elmwood, Assembly and Marion streets in downtown Columbia, Herbert said.

More than 20 grants were awarded, with recipients ranging from First Citizens Bank, one of South Carolina’s largest financial institutions; and Villa Tronco, an established restaurant, to Paradise Ice, a new coffee and custard shop.

But while the city is selecting a handful of businesses for an instant 80 percent return on their money, others in the same area are going under.

King’s Quarters, a hair salon located on Washington Street, shuttered its doors after 40 years in operation in March. Just before that, the Chik-Fil-A restaurant at the corner of Main and Lady streets closed.

Harriett Armstrong, the owner of King’s Quarters, said a number of businesses have shut down in and around Main Street over the past couple of years.

“Business was down 40 percent for us since 2009,” she said. “When I met with my landlord to wrap everything up, she said this is going on everywhere, that businesses are falling like flies.”

Meanwhile, Columbia is looking at expanding its façade grant program into the North Main Street area, Herbert said, though she added the amount of money the city disburses likely won’t be as large as what it handed out in March.

Columbia’s record when it comes to picking winners and losers appears spotty at best.

Six of the 32 active commercial loans granted through the city of Columbia to high-risk businesses in the past six years are in default, according information secured recently by The State newspaper through an open-records request.

The more than $150,000 in back payments due on the troubled loans amounts to a default rate of almost 19 percent, above the U.S. Commerce Department’s “acceptable national standard” of 15 percent, according to a city official.

Protecting the Environment, or Protectionism?

One Columbia businessman, who requested his name not be used because he does work in the area, claims Columbia’s leaders have long made it a practice to interfere in the marketplace.

He said city leaders who fall prey to contentions that big operations such as Wal-Mart setting up shop in downtown Columbia would degrade the city’s quality of life are either fools, or fooling themselves.

Many protestors have nothing more than the well-being of their own pocketbooks at heart, he said.

“If you look at the people who are holding a lot of these deals up – such as the Wal-Mart project along Assembly Street and the 5 Points South project – they’ll tell you they oppose these projects because of the environment or quality of life issues, but it’s got nothing to do with that,” he said.

“A lot of these people have businesses, and it all boils down to competition; they don’t want to deal with more competition.”

Wal-Mart’s plans to convert acres of weeds and a dilapidated stadium into a shopping complex appeared to be a go last fall when City Council gave its approval to sell Capital City Stadium, which comprises a portion of the 23-acre site.

But once it was disclosed publicly that it was Wal-Mart that wanted the property, some on the council changed their position.

In October, the council delayed the sale as members negotiated concessions from developer Bright-Meyers in response to public complaints that a shopping complex would increase flooding and pollution along Rocky Branch Creek and the Congaree River, hurt small businesses, and affect the nature of the nearby neighborhood, once a village for the old Olympia mills.

Then, earlier this year, council members voted to wait up to three months for a study of Rocky Branch before making a decision.

That decision was made despite an offer from Bright-Meyers to pay to open three choke points along the creek. The developer also did not rule out paying to widen the creek where it empties into the Congaree River.

“Yes, there is a flooding problem; but Wal-Mart isn’t going to cause it to flood, and they’re willing to do something about it with their own money,” Fisher said. “If Wal-Mart ultimately ends up not building there, the problem is still going to be there. It’s not going to go away, and the city doesn’t have the money to fix it.”

Capital City Stadium, which dates back to the 1920s, is used for a few weeks during the summer by a college league but hasn’t had a genuine steady resident since 2004, when the Capital City Bombers moved to Greenville.

The area surrounding the stadium has been described by Benjamin, Columbia’s mayor, as “blighted” and “long-neglected.” Yet detractors expressed numerous reasons not to sell the site to Wal-Mart during a December community meeting, according to one publication:

  • One local business owner said there were already four Wal-Mart shopping centers nearby (MapQuest shows the nearest Wal-Mart to Capital City Stadium is nearly 6 miles away);
  • A Columbia resident said there were plenty of grocery stores already, and the town does not need another shopping center;
  • Others said they wanted to “take back control of their economy”; and
  • Another local business owner said the Walton family, which owns Wal-Mart, is worth billions of dollars already and would be fine without a store in Olympia.

The 5 Points South project was proposed in 2007 and would have included a Walgreens, a shop and a bank, in addition to three levels of parking and condos. Developers pulled the plug when City Council lowered by $500,000 the amount of money it would pledge for public parking.

Eventually, the project was scaled down to just the Walgreens, the bank and the shop – all in a single story.

Small-Business Friendly?

Columbia’s battles with smaller businesses have also made the news over the past couple of years.

Taboo, the adult store that met all the city’s guidelines, recently opened on Devine Street despite attempts by City Council to prevent it from doing so.

Late last year, Columbia gave Taboo’s owners’ permission to open because the shop met the requirement that it be at least 500 feet from school, homes and churches.

But after citizens protested, City Council came back a short time later and adopted a business-license law specific to sexually oriented businesses, expanding the buffer zone to 700 feet. That would have left Taboo in violation of zoning regulations.

Earlier this year, the city’s business license office granted Taboo permission to operate under a “grandfather” clause. That means Taboo had met code requirements before City Council changed the law on Dec. 29, enabling it to operate under the new law for up to two years.

In the case of Roberts, the taco vendor, it took him more than a year to get an OK from officials to operate a cart at the corner of Main and Gervais.

A gleaming new office tower managed by Atlanta firm Holder Properties, whose plans for the site included recruiting a restaurant to go on the bottom floor of a high-rise which counts such well-known clients as the National Bank of South Carolina and the McNair Law Firm as occupants.

In addition, California native Ellyn Season invested big bucks in a Southwest-style restaurant  on the other side of Main Street, called Taqueria Fever, that opened last year and serves tacos.

Despite being in compliance with the law, Roberts was eventually forced to move to a less-trafficked site down Gervais Street before he could ply his trade.

Reach Dietrich at (803) 779-5022 ext. 110, or kevin@thenerve.org.