Lawsuit over former Myrtle Beach Air Force base will continue, SC chief justice rules
A lawsuit involving three of the largest public agencies in Horry County will be allowed to continue after a South Carolina Supreme Court justice declined to consider a request to dismiss the case.
Horry County Schools and the county jointly filed the lawsuit in December 2018 alleging that the city of Myrtle Beach and Myrtle Beach Air Force Base Redevelopment Authority are misusing tax increment financing (TIF) funds on a project the county and school district argue has already been completed.
Tax revenues have been frozen on properties within the former Air Force base area, which includes The Market Common, since 2004 while the assessed value of the land has increased from about $4.2 million to more than $38.2 million, according to court documents.
As a result, the school district, county and other tax districts cannot collect additional tax revenue on the increased value because it is earmarked for development and infrastructure within the TIF district.
The defendants’ attorneys have continually called the lawsuit “baseless” in court documents and accused the county and school district of trying to delay court proceedings until the city is no longer able to issue additional debt for redevelopment of the area, a statutory authority that expires Dec. 13, 2020.
The city had entered into an agreement with Wells Fargo for the sale of $12.6 million in bonds prior to the filing of the lawsuit, but failed to close the deal due to the suit, according to court documents.
The defendants had filed a motion to dismiss the case, and Judge Carmen Mullen ruled to deny that motion in March, but the defendants then appealed that decision to the state’s high court.
Chief Justice Donald Beatty denied that appeal last week, according to a copy of the order submitted to The Sun News, and sent the case back to Mullen for consideration.
HCS Board Chairman Ken Richardson called the ruling a “big win for the children of Horry County,” and said he’s looking forward to getting this case resolved in court.
At one point during redevelopment of the former Air Force base, future plans included building a $20 million school in the area, but that project was eventually removed, which has been among the school district’s primary complaints in the suit.
“If they’d give us the money for the school, we’d be more than happy to settle this thing,” Richardson said. “It’s not about suing Myrtle Beach. It’s about doing right by the school children.”
City officials have argued in court documents that there’s no longer sufficient space within the redevelopment area for a new school, and it’s not needed since there aren’t many school-age children in that area.
A city spokesman did not immediately return a request for comment about the latest ruling.
An accounting firm retained by the county and school district to audit the city’s spending as part of the suit has identified millions of potentially misspent funds among other issues, court filings show, but city officials have argued the accountant doesn’t understand the law and is making assumptions based on an incomplete review of information.
The public agencies involved spent more than $500,000 combined in legal fees through the end of 2019, according to multiple open records requests from The Sun News.
