Some lawmakers off to a fast start – looking after their wallets?

January 22, 2020

Investigative Reports

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By RICK BRUNDRETT

Although S.C. lawmakers have been back in session only since last week, some of them aren’t waiting to author or co-sponsor bills that could boost their own bottom lines.

And a longstanding state ethics law gives them a big legal loophole to push for such legislation.

Under a House bill prefiled in November and referred last week to the Ways and Means Committee, developers who renovate or redevelop “abandoned” malls in South Carolina could receive real property tax credits, or credits against income or insurance premium taxes or corporate license fees.

The property tax break, for example, under the “South Carolina Malls Revitalization Act” would equal 25% of the actual renovation or redevelopment costs, times the “local taxing entity ratio,” if the final expenses were between 80% and 125% of the initially projected costs.

An “abandoned mall” is defined broadly under the proposal as an “area that is comprised of three or more commercial establishments, the primary purpose of which is making retail sales”; and which at least half of the businesses have been “closed continuously to business or otherwise nonoperational for a period of at least one year immediately preceding” the developer’s formal notification to renovate or redevelop the property.

“There exists in many communities of this State abandoned malls,” the bill’s introduction says, noting that the “abandonment of malls has resulted in the disruption of communities and increased the cost to local governments by requiring additional police and fire services due to excessive vacancies.”

One of the bill’s co-sponsors is Rep. William Cogswell, R-Charleston, who is described on the website of WECCO Development LLC as having been in the “real estate business since 1997,” and that his “extensive background includes work in development, construction, brokerage, and asset management.”

“We are experts in tax credit deals, public private partnerships, and matching users with the right property,” the website says about the company.

On his 2019 income-disclosure form filed with the State Ethics Commission, Cogswell, a House member since 2017, listed himself as a managing member of WECCO Development LLC and the Cogswell Company LLC. He also reported the leasing of commercial office space to Clemson University; the Clemson Architecture Center in Charleston is housed in the historic Cigar Factory building, where WECCO Development also is located.

In an email response Wednesday to The Nerve, Cogswell said there is “no conflict of interest in my mind or in the opinion of the House Ethics counsel” about the bill that he co-sponsored.

“While I have developed projects using other federal and state tax credits (mainly historic buildings), I have no past, current or future interest (economic or other) in the redevelopment of malls, which is what this bill contemplates,” Cogswell said.

Cogswell isn’t the only House member with pending legislation connected to his profession. Rep. Phillip Lowe, R-Florence, who is a licensed physical therapist and developer, prefiled a bill last month that would allow the state Department of Labor, Licensing and Regulation to require state and national criminal background checks for those applying for an initial physical therapist or physical therapist assistant license. The legislation was referred last week to the Medical, Military, Public and Municipal Affairs Committee.

On his 2019 income-disclosure form, Lowe, a House member since 2007, listed himself as owner of Lowe’s Therapy and Camden Rehab, and part owner of the Sumter Physical Therapy Clinic. He also reported receiving income from several private properties.

Lowe did not immediately respond to a phone message Tuesday from The Nerve.

State ethics law bans public officials from using their positions to “obtain an economic interest for himself, a family member, an individual with whom he is associated, or a business with which he is associated.”

But under a legal loophole known as the “large-class exception,” lawmakers can sponsor bills that benefit their businesses if the legislation also would help similar businesses equally.

The Nerve repeatedly has pointed out bills that pose potential conflicts of interest for lawmakers who authored or co-sponsored the legislation, including a story last year on four such bills.

One of those bills, which dealt with the regulation of “pharmacy benefits managers” and was co-sponsored by Sen. Ronnie Cromer, R-Newberry, who is a licensed pharmacist and local independent pharmacy owner, eventually passed the Legislature and was signed into law by Gov. Henry McMaster. Cromer at the time denied the legislation posed a potential conflict of interest.

The other three bills are pending. If they don’t pass this year, they would have to be reintroduced next year under the two-year legislative cycle.

Bryce Fiedler, a policy analyst with the South Carolina Policy Council, the parent organization of The Nerve, contributed to this story. Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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