Myrtle Beach council considers luring developers downtown with incentives

Developers in certain parts of Myrtle Beach could get vouchers to help offset project costs such as permit, impact and business license fees as the city aims to spur development in those areas.

Myrtle Beach City Council on Tuesday passed first reading of an ordinance that would encourage development in the south mixed-use/former Myrtle Beach Pavilion area and the Five Points Superblock area of downtown.

“This will put economic incentives in place to spur development in the south mixed-use area and the Superblock area,” City Manger John Pedersen said.

The south mixed-use area is defined as the area between Ninth Avenue North and Third Avenue South, from Kings Highway to the ocean. The Superblock area is defined as the businesses along Ninth Avenue North, Broadway Street, Main Street and Kings Highway. City officials have said those areas have had stagnant economic and social development of commercial, residential or mixed uses.

“Most of the blemishes that we get on our reputation come from that area,” Pedersen said. “The sooner we get that area [redeveloped], the sooner those blemishes will go away.”

In an ordinance discussed Tuesday, developers would receive a voucher for 2 percent of the project’s total cost – up to $2 million – that could then be used to reimburse permit, impact, initial construction and water tap fees. The balance of that voucher could be used within five years to reimburse utility bills, business licenses, hospitality fees and local accommodations taxes associated with the project.

Councilman Mike Lowder said providing incentives would help spur commercial development in the city and keep it competitive with other parts of the Grand Strand.

“It’s the commercial development that I’m seeing in places that we’re not on the same pace as other areas,” he said. “This is a good opportunity to say, ‘we want your business.’ ... This is not as much a giveaway as we’re buying into the future.”

Since establishing in January that redevelopment in the south mixed-use area was a city priority, council members have said they need to take an “outside of the box” approach.

“I think this is one of the most innovative things that’s come before us,” Councilman Philip Render said. “It’s going to take some thinking outside of the box to get things done. ... These areas are not going to move forward without an innovative push from the city.”

To be considered for the incentive program, transient accommodations such as hotels need to cost at least $5 million, multi-family residential projects should be about $750,000 and other redevelopment projects need to cost at least $100,000, city staff proposed.

“This would not be an automatic designation,” Pedersen said. “Each [project] would go to City Council and City Council would have to determine that it was eligible.”

Some council members said they were concerned about a developer using a voucher to be reimbursed for expenses, such as hospitality fees and accommodations taxes, that were paid by the consumer.

“Those taxes aren’t coming out of [the developer’s] pocket, and I don’t want to give it to them,” Mayor John Rhodes said.

City staff will reconsider what the vouchers can be used to pay for before second and final reading of the ordinance, which could be as soon as Sept. 22.

“I have no issue taking out [reimbursement of] the hospitality fees and the A-Tax fees,” Pedersen said. “I think the biggest thing is getting this started.”

This story was originally published September 8, 2015 at 5:12 PM with the headline "Myrtle Beach council considers luring developers downtown with incentives."