Development group looking for relief from Myrtle Beach fees at ITAP

Area economic development officials want the city of Myrtle Beach to create a special economic zone at a business park at Myrtle Beach International Airport so they will have more tools to lure manufacturers into the now empty park.

Specifically, industry hunters want to be able to offer prospective employers a reduction in or elimination of the city’s business license fees.

“The problem is the way the city business license is figured is by gross income,” said Mark Lazarus, Horry County Council chairman and an executive committee member of the Myrtle Beach Regional Economic Development Corp.

He said that could mean that a major employer that made parts for Boeing, for instance, could face a $50,000 to $100,000 annual bill for its city business license if its sales were in the $20 million to $30 million range in a year.

It’s not a major amount of money as a percentage of income, Lazarus acknowledged, but it’s a high enough sum to raise the eyebrows of industry executives calculating operating expenses.

Myrtle Beach Mayor John Rhodes said he’s open to hearing a proposal from the MBREDC, but so far all he’s had is a phone call from Lazarus.

He said a move to ease the fee through whatever vehicle would be a decision for the whole City Council, one that would require a specific proposal to deliberate.

The EDC owns 400 acres at the airport that it designated as the Myrtle Beach International Technology and Aeronautics Park. The park has been ready for businesses to move in for about three years.

Roads connect ITAP to Farrow Parkway and other parts of The Market Common area, utilities have been extended to the land and a connector runway is under construction to link the park with the rest of the airport. But no businesses have moved in.

The airport terminal is on the other side of the runway from ITAP, which now consists of large, mowed open areas and some sidewalks and landscaping.

Economic development officials have said they believe the park could eventually be home to 2,500 highly skilled and high-paying jobs.

To calculate business license fees, the city of Myrtle Beach divides businesses into eight classes and charges a base rate between $95 and $155 annually plus an additional $2.45 to $3.05 per $1,000 of gross revenue over the first $2,000.

That means that the fictional Boeing supplier Lazarus cited as an illustration likely would pay a base rate of $155 and an additional $60,000 to $90,000 a year for its business license, as it likely would be grouped with other manufacturers in Class 7.

So far, Lazarus said the EDC hasn’t lost any prospects because of the city’s fee.

“We haven’t had anybody who said no,” he said, “but we’ve had some that were quite concerned with it.”

The amount of the fee is important for two reasons, Lazarus said. For one, it could cut the profit of a company that operated on a low margin.

Secondly, he said that other areas have lower business license fees and/or offer to mitigate or eliminate the cost for manufacturers who decide to build plants and employ people.

“I’d be open to listen to anything the EDC has in mind,” Rhodes said.

He’s not opposed to either idea -- an economic development zone or reduction of the fee on an individual basis -- but he wants something concrete from the EDC.

In an earlier conversation, he said he’d want some compensation for the money the city would be losing.

With limits on how much governments in South Carolina can raise property taxes, other sources of revenue such as business license fees become more important to annual budgets, said Melissa Carter of the Municipal Association of South Carolina.

Lazarus and other EDC officials say the city would benefit from the jobs a manufacturer would bring to the area and the money their workers would spend at city businesses.

Additionally, they say that Myrtle Beach has the highest business license fee in the state, but they can’t provide a source for the information. Call the Municipal Association, they suggest.

But Carter said the association doesn’t keep information on business license fees. The only way to get it would be from each individual city or county.

Carter said many but not all governments in the state that charge business license fees follow a model that the association recommends. Myrtle Beach’s fee schedule is one that does.

Lazarus said the MBREDC doesn’t want to eliminate business license fees for every business that locates at ITAP. Rather, he envisions a tiered system where relief from or elimination of the fees would depend on the size of the business and the number of people it will employ.

No relief would be forthcoming before the company reached certain benchmarks, he said.

Contact STEVE JONES at 444-1765 or on Twitter @TSN_SteveJones.

This story was originally published April 15, 2015 at 1:47 PM with the headline "Development group looking for relief from Myrtle Beach fees at ITAP."