July 21, 2013

Horry County skittish about sports tourism funding

Councilmen want more solid answers about return on investments.

An anticipated request for Horry County to provide funding for the planned sports tourism complex in Myrtle Beach sparked some councilmen to voice frustration over the speed of the city’s progress on the complex and a call for a more concerted effort for the area to bank on sports tourism.

The city of Myrtle Beach was eyeing some of Horry County’s accommodations tax funds and even some money specifically designed to fund road projects to help get the planned $12.4 million sports complex off the ground.

The city eventually withdrew its request but not before a few county councilmen had a chance to chime in about what they would like to see before considering a request for funding from a project that’s been 10 years in the making. It also prompted Council Chairman Mark Lazarus to express his interest in creating a countywide sports tourism commission to help prove the benefit of sports tourism for the entire county.

Myrtle Beach has until 2020 to spend more than $12 million for the proposed state-of-the-art 100,000 square-foot indoor sports facility, which will be adjacent to the Myrtle Beach Convention Center. Construction is planned to start in February. The city received state funding to the tune of $7 million to purchase about 28 of the 40 acres needed for the complex.

“We had originally thought about asking the county for money, but we’re not asking for it anymore,” Mark Kruea, spokesman for the city, said Friday. “Since they’ll be getting some of this money back from the complex through taxes, we thought they might want to contribute.”

The city is paying for the $12 million project through hospitality fee revenue and revenue from a 1-cent sales tax for tourism in Myrtle Beach, in which 80 percent of revenue generated must go toward out-of-market advertising and 20 percent is split between property tax credits and tourism-related capital improvement projects like this one.

County Chairman Lazarus said there’d be a lot of questions that would need to be answered before the county would contribute money and expressed frustration with the progress of the city’s sports complex.

“You’ve got major complex and the people have already been taxed and you don’t know what the revenue or expense side is going to be,” he said. “We do need answers.”

County Councilman Harold Worley said he eagerly awaits the return on the one-cent tax area taxpayers have invested already.

“I’m all in favor of any program or activity that increases our tourism,” Worley said. “What I want to see before we go down this road, and I see we’re going down it, is somebody’s going to have to show me what the impact on tourism is... I just want to make sure it’s what they say. So far, I haven’t seen anything but a big tax bill. I haven’t seen the revenue.

“You’re going to have to show me before I vote to give a lot of money to sports tourism. I hope it’s a success. I hope it brings hundreds of thousands of dollars. So far, it’s got flat tires.”

Sports tourism has been a part of the Grand Strand for years, dating as far back as the start of the Beach Ball Classic in 1981 and continues through events like the Myrtle Beach Marathon as well as various youth volleyball, basketball, baseball and softball tournaments. The city began measuring what is termed direct visitor spending, or spending as a result of a particular event, about 10 years ago. In this case, the city looked at the Beach Ball Classic and the Myrtle Beach Marathon, which collectively over the years has brought in $15 million to merchants, hotels and more.

John Pedersen, assistant city manager for the city of Myrtle Beach, told a county administration committee this month that that number leaped to $132 million as of last year because of the Grand Park Complex at The Market Common. He said 40 percent of that figure happened in the shoulder season months, which is something the city hopes grows with the addition of this new sports complex.

Pedersen said a study used to support the need for the complex showed Myrtle Beach “doesn’t have the facilities to grow those shoulder season events.” Plans for this proposed sports complex show that organizers should aim for two-thirds of the booked sporting events to occur in the shoulder season. He said direct visitor spending on sports tourism in the area should bring an additional $30 million over the first five years the facility is open.

Pedersen said the study estimates about 10 percent of the $30 million will come back to the government in the form of taxes and Myrtle Beach and Horry County should each receive about 2 percent of the $30 million.

Lazarus said there must be a push to coordinate getting the sporting events that fall on non-peak weeks and weekends along the Grand Strand.

“In the middle of the summer, we’ve got tourists already,” he said. “If it’s done right, it can be prosperous. We can fill a lot of room nights in times we need to fill rooms.”

North Myrtle Beach has had a strong head start in capitalizing on sports tourism as recent reports show it has nearly 50 events booked next year for its anticipated sports complex. That complex alone is expected to pump $14 million into North Myrtle Beach’s economy in 2014. The complex, which includes a 27-acre lake, will have six baseball-softball fields, up to eight soccer-football-lacrosse fields, an amphitheater, playgrounds, a one-acre dog park and picnic shelters. There also will be a Veterans Plaza with a gathering area and a multi-purpose trail. The complex is off Robert Edge Parkway, just off S.C. 31.

Still there is skepticism by some Horry County council members, including Councilman Marion Foxworth who said he is “going to have reservations” when asked to fund sports tourism and pointed to historical and ecological tourism as untapped markets in the area.

“In this case, tourism is our bread and butter and we need to do what we can to increase it,” he said. “Is there a market for sports tourism? Probably there is. But it’s not an unlimited market and how much are you going to invest in... a finite market before you reach a return on investment we are pleased with?”

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