Sembler Opponents: South Carolina Not for Sale

March 9, 2010

Investigative Reports

Print Friendly, PDF & Email

The NerveSouth Carolina is not for sale.

That is the message a bipartisan group of nonprofit organizations delivered at the State House in Columbia this morning.

Members of the coalition, including the South Carolina Policy Council and the Coastal Conservation League, denounced efforts by some lawmakers to give an out-of-state company tens of millions of dollars in tax breaks to build an upscale mall in the Lowcountry.

The company, Florida-based Sembler, is pulling out all the stops in an effort to get the tax breaks: hiring lobbyists to schmooze with lawmakers and stating flatly that it will abandon the project if it doesn’t get the subsidies, among other actions.

A bill pending in the General Assembly would grant the tax breaks to Sembler in the form of a rebated portion of sales tax revenue generated at the mall, dubbed Okatie Crossings.

In February, the bill, sponsored by Sen. Clementa Pinckney, D-Jasper, cleared a key hurdle, the Senate Finance Committee, and the full Senate could begin debating it today.

Pinckney and other supporters of the legislation say the mall would create thousands of jobs and hundreds of millions of dollars of capital investment in an economically deprived area.

The opponents say the bill is bad economic and environmental policy, especially in a recession.

Economists have concluded that incentives for retail development do not result in an economic gain, Policy Council President Ashley Landess said during a news conference the opposition held in the rotunda of the Capitol. “And, in fact, they force existing businesses to subsidize their competition,” Landess said of such incentives.

About 100 people attended the media event.

Landess said the tax breaks would deprive the state’s general fund of badly needed revenue.

The state budget has been eviscerated by unprecedented cuts amid the recession. Citing teacher furloughs across the state, the possibility of prisoners in state facilities being released early and other impacts, Landess said the Legislature should concentrate on core functions of government. “That’s what we want our money spent on, not a retail mall.”

Dana Beach, founder and director of the Coastal Conservation League, described ominous effects on the Okatie watershed if the mall is built.

The watershed is a delicate, extraordinary system of tidal marshes and estuaries replete with fisheries and oyster beds, Beach said. “Oyster beds really are the canary in the coal mine for the environment.”

But the watershed already is being degraded, and the Okatie mall would push it beyond the breaking point by increasing to more than 10 percent the amount of impervious surface in the area. That would cause “serious and irreversible” damage, Beach said. “The culprit is (storm-water) runoff.”

Storm runoff contains heavy metals, oil, bacteria and other poisons that destroy water quality, he said.

Beach described the would-be mall as a disaster under any scenario. “What makes it a tragedy,” he said, “is the public could be forced to subsidize, to underwrite the damage.”

In that sense, the Legislature is on the verge of making the public an accomplice to a crime, Beach said.

Representatives of the South Carolina Association of Taxpayers and the South Carolina Club for Growth also spoke against the legislation.

Pinckney was on hand, too. Asked by The Nerve to respond to the opponents’ remarks, he said, “Mr. Beach is profoundly inaccurate.”

Pinckney said a storm-water management plan for Okatie Crossings exceeds requirements by Beaufort County, where part of the mall would be located, and the plan has been available at public meetings on the project.

“Again, it’s not based on any reality,” he said of the opposition to his bill and the mall.

Pinckney described his proposed incentives for the Sembler Co. as “an earned investment,” noting that the company would have to meet capital investment and job creation thresholds before it could receive the tax breaks.

He said the Senate “most likely” will take up his bill today.

Regardless of when and if it does, Sen. Tom Davis, R-Beaufort, said he plans to take as much time as he needs “to make sure the senators know how bad this bill is.”

That could be several days, said Davis, who was present at the end of the news conference.

He said he will offer several amendments to the legislation to strengthen its investment and employment requirements.

Asked whether he would filibuster the bill, Davis said he wasn’t sure but his intention is to make sure his colleagues are well informed about it.

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