Property owners that include several major outside developers are nearly six months delinquent on their property taxes, owing the already cash-starved town more than $150,000.
Further, the town has not reported any new building to county tax officials since 2004. During that time, a town councilman built a new house, several houses began construction and other properties saw extensive renovations, but neither the town nor the county has seen increased tax revenues from those improvements.
Now, the county tax assessor is planning to review all the property in the town for unreported construction during that time.
"I'm sure the people of Atlantic Beach will benefit from us going in and making sure everything is right," said Horry County Treasurer Roddy Dickinson.
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In a town where the annual budget hovers around $900,000 and where recent unpaid bills have kept the government on the edge of financial collapse, the missing tax money, if paid, could be a critical part of the town's financial recovery.
Or, amid public cries for more police protection, that same money could have paid a year's worth of salary, benefits, equipment and other costs for three new police officers, substantially increasing the size of the present five-officer department.
Horry County sent out 2007's property-tax bills in October, and they were due Jan. 15. Over the course of the next two months, a series of penalties were added to any unpaid taxes, and those left by March 17 are considered delinquent.
If the taxes remain unpaid, the county holds a tax auction Dec. 1. Some of the town's most prominent landowners are among those who have yet to pay, nearly six months after the due date.
The largest bundle of unpaid taxes, just shy of $50,000, is associated with the developers who control most of the property along Ocean Boulevard between 29th and 30th avenues.
Seventh Street Properties, an N.C. company registered to Matt Gadams, owes more than $32,000 on five oceanfront parcels. Atlantic Beach Oceanfront of Norfolk, Va., which owes nearly $18,000 on four vacant lots one block back from the beach, lists Matt Gadams' brother, Buddy Gadams, as the contact person on an undated demolition permit on file in Atlantic Beach.
Buddy Gadams is the president and chief executive of Marathon Development, the company behind the $180 million Granby Tower luxury condominium in downtown Norfolk. Marathon was known for award-winning historical renovation projects around coastal Virginia, and the Granby Tower would have been one of its most ambitious projects.
After a May 2007 groundbreaking for the tower, construction started in the summer but halted in September, and Buddy Gadams told The Virginian-Pilot that he had lost financing. Construction has yet to restart, and condo buyers have begun asking for refunds. Gadams said in late May that financing was near completion, according to newspaper accounts.
Neither Buddy nor Matt Gadams returned repeated phone calls this week for comment.
Amy Breunig of North Myrtle Beach, a landowner and operator of several of the town's motels, and David O'Connell, a North Myrtle Beach developer, together and separately and through various corporations owe more than $23,000 in taxes. Both said they are intentionally withholding the taxes to protest what they see as the town government's mismanagement, but said they will pay before the December tax sale.
"Why give it to them if they're just going to blow it?" O'Connell said. "As soon as I'll see some change, I'll pay right up."
Breunig added that she is encouraged by recent discussion of contracting with the North Myrtle Beach Police Department for full-time police coverage.
"I'm sick of giving them my tax dollars and seeing it misappropriated," Breunig said. "The minute I see North Myrtle Beach police coming down these streets, I will pay every cent of those tax dollars."
Brenda Bromell, who operates a nightclub complex near the beach, owes an estimated $18,353 in taxes on business property related to the Kenny's Kitchen restaurant. She could not be reached for comment.
Countywide, 97 percent of taxes had been paid by mid June. In Atlantic Beach, that figure is around 82 percent - far lower than any other city on the list, though no one can explain why.
"We intend to find out the roots of it," said acting Mayor Charlene Taylor.
Tax sales are held every December and no real estate is excused, the county treasurer said. The unpaid taxes on real-estate in Atlantic Beach only date from 2007 - any property with unpaid taxes in previous years would have already been sold, Dickinson said.
Town Councilman Donnell Thompson said he hopes some of the properties left unpaid go up for auction because he has personally warned some of the developers to pay their back taxes.
"That really disturbs me," Thompson said. "You're the big-dollar guy, and you can't pay your taxes? That gives me heartburn."
The unpaid taxes are "one of the factors in why we haven't met our obligations," said interim Town Manager Charles Williams, appointed by the state in March to help the town work its way out of debt.
The town budgeted to receive 95 percent of its taxes by the Jan. 15 due date.
"If I had all this money, I could pay all the lawyers," Williams said, referring to the town's $150,000 in unpaid legal fees.
In general, if no significant work is done on a property, its taxable value remains the same from year to year. If a new structure is built or a building is renovated, however, the building permit is normally filed with the county and the property is reassessed at its new value.
Under normal circumstances, the county tax assessor receives building permits as soon as they are filed, either with Horry County or any of its various cities, and conducts a site visit soon after. Since 2003, however, the county has received only six permits from Atlantic Beach and they were all for demolitions, said assessor Rendel Mincey.
In other words, no construction or renovation in the town has been reported to the county in four years, and the town has likewise not seen any new taxes from such improvements.
The problem is systemic, but the most obvious example is one councilman's house. Last October, Thompson received a property-tax bill of $945 and paid it within days. Early this month, however, county tax officials realized his house, built in 2006, had never been added to the tax rolls, and reassessed the property for back taxes.
For a few days, those back taxes placed the councilman's name on the county delinquent tax list for $1,437 - a sum he paid last week.
"You send me a tax bill, I pay the bill," Thompson said.
A review of other building permits on file in Atlantic Beach left it unclear exactly how many other structures had actually been built during that time period, but the permits include several houses still under construction and several large renovation projects.
Two permitted projects have yet to be built: a home on 32nd Avenue near the beach, and the "Emerald Landing" condo project marked by a sign on 31st Avenue. In 2007, permits were also filed for two homes on 32nd Avenue now under construction.
Among the renovations permitted, developers Breunig and O'Connell worked together on renovations estimated at more than $100,000 on two properties on 30th Avenue, Bromell received permits for work on 30th Avenue properties, and Taylor, the councilwoman, also received a permit for a screened-in porch valued at more than $11,000 that she said has yet to be completed. Other properties around town were permitted for thousands of dollars in roof repairs, repaintings, cabinet work and window replacements.
Since the unreported building came to light last week, Mincey said his office is planning a wide review of property in the town to fill in the four-year gap in reports - an unusual step, because reassements are normally done every five years.
The property owners who have built are now at risk of owing back taxes, just as Thompson did.
"You're taking a chance that at some point in time, we're going to find out about it," Mincey said.
Unlike those who owe 2007 property taxes, Thompson and other property owners with unreported building are likely not at fault, the assessor said - they fulfilled their obligations by getting the building permits. Whether they should have noticed that their tax bills didn't increase after work on their property is harder to say.
"Certainly, as a taxpayer, I should question that," Mincey said, while noting that the tax bills could also have been handled by a mortgage company, away from the taxpayers' eyes.
The fault lies instead with the town for not reporting the building permits with the county, Mincey said. Atlantic Beach has seen a number of town managers during that period, including Carolyn Montgomery, Marcia Conner and Williams.
Williams said, too, he might be at fault for some of the unreported building permits during his 2005 stint as town manager. When he arrived in town, he was told that property owners reported their own buildings to the county, he said - unlike anywhere else he had worked.
"It sounded strange to me, but I didn't pursue it because we weren't issuing a bunch of permits," Williams said.
Take a look at The Sun News' 2006 investigation of the problems facing Atlantic Beach at MyrtleBeachOnline.com
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