County, Horry County Schools suing City of Myrtle Beach over air base redevelopment

Horry County Schools and Horry County are suing the City of Myrtle Beach and the Myrtle Beach Air Force Base Redevelopment Authority over a planned school that was never built and the funds associated with it.

The plaintiffs contend that Myrtle Beach and the authority failed to execute the deal of building a new school that was part of the plan to redevelop the military base upon its closure while instead using funds to pay off tax increment bonds and interest that accompanied them, and retaining excess tax increment funds (TIF) with the intent to use them for future projects.

The plaintiffs contend that the “1998 Plan” — the original plan formulated in 1994, when the authority was created upon the base’s closure the year before — included $20 million to build a school on the property. However, the suit claims, in November 2017 — 19 years after the redevelopment plan was made — the proposed school (Project 19) was removed from the plan.

“For approximately 19 years, Project 19 was a part of the Plan, and throughout that time, the Authority and City made promises and assurances that Project 19 would remain part of the plan,” the lawsuit says.

Instead, the plaintiffs contend, the plans for the school — which had been sought since 1991 — were dropped, forcing the school district to “incur costs to make accommodations” for an influx of students — an increase related to the redevelopment of the base — during the time frame in which the new school was supposed to be built. The plaintiffs also argue that they have “expended funds in anticipation of the school project and forborne opportunities to develop a school on economically advantageous terms, among other things.”

Now, the suit states, “there is no longer land suitable for the construction of a school in the redevelopment district.”

The plaintiffs contend that the city and authority “unlawfully retained and continues to unlawfully retain tax increment proceeds, including those not used to service debt obligations for redevelopment projects and costs, instead of returning those surplus funds to Horry County and the School District as required by the Defense Redevelopment Statute,” a law instituted to allow local governments to “redevelop former military bases and integrate those areas back into the surrounding community.”

The TIF and other bonds resulted from an amended “2005 Plan” that focused on building infrastructure, including locations that became South Park Village and Grand Park, according to the suit. The final maturity date of those bonds is 2035, and the city’s authority to issue more TIF bonds for the Air Force Base expires in 2020, the suit states.

In 2016, the city refinanced the bonds to receive lower interest rates, according to the suit. The 2004 total assessed value of the former Air Force Base was just over $4 million but now sits at over $38 million, the suit states.

The plaintiffs contend that actions by the city and authority have put them at a disadvantage in which they will be “required to construct a school at its own expense.”

Furthermore, the plaintiffs contend that the fact that the original plan included a school led to the city and authority receiving “tangible benefits as a result of its inclusion.”

According to the suit, under the Defense Redevelopment Statute, “the authority is required to, among other things, ‘take into account the needs of the the surrounding community’” but has failed to deliver by not completing Project 19. When a redevelopment has been achieved, the suit contends, the authority and plans must be dissolved and “surplus incremental tax revenues generated from properties in a redevelopment area must be returned to the respective taxing districts for distribution according to their respective millage rates.”

The Myrtle Beach Air Force Base — which operated until the early 1990s on approximately 4,000 acres — now houses The Market Common, which opened in 2008, and other residential and commercial properties. The total budget estimate for the 1998 Plan was estimated at nearly $84 million over a 20-year span, the suit notes.

This story was originally published December 22, 2018 at 5:14 PM.