How will Myrtle Beach Air Force base settlement impact Market Common redevelopment?
A targeted redevelopment of the former Myrtle Beach Air Force base is set to be completed by 2028 after three of the area’s largest public agencies agreed to settle a yearslong legal dispute.
Horry County Schools and Horry County jointly filed suit in 2018 against the City of Myrtle Beach and Myrtle Beach Air Force Based Redevelopment Authority seeking to prevent the defendants from continuing to borrow to redevelop the Market Common area.
They alleged the defendants were 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 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.
All four parties voted Tuesday in favor of a settlement agreement and released a joint statement Wednesday morning noting that they have agreed to 13 new projects within the district at a cost of up to $28.5 million.
Both sides appeared to make concessions, as the defendants agreed not to facilitate any future bonds related to the TIF district, but none of the new projects includes a new school, according to the agreement.
School district officials had said on numerous occasions that a primary reason for the suit was related to a new school that was supposed to built within the TIF district, a project that was removed from the authority’s to-do list in late 2017, according to court documents.
The school district argued that it expended funds and forewent other opportunities in anticipation of that school being built, while the authority and city countered that the school was never promised, and there’s no longer a need or available space to build it.
Ken Richardson, HCS board chairman, who has been outspoken about the need for the new school, declined to comment, stating that they’ve been instructed to let the news release speak for itself.
Among the new projects, which will be funded by $15 million in existing undesignated funds and $2.25 million annually in future TIF collections, are parking structures, improvements to Grand Park, a new fire station and more than $7.8 million for rehabilitation, reconstruction, repair and remodeling, the agreement states.
In addition to the new projects, the redevelopment authority has agreed to declare an estimated annual surplus distribution of at least $6 million to be divided among the three public bodies, unless insufficient funds exist to do so. The city will also be reimbursed about $2 million from the Capital Projects Fund for costs it incurred on the recent Police Annex expansion, according to the agreement.
The agreement notes that the target date for retirement of debt is November 2028, though the redevelopment authority could continue to exist beyond that if insufficient funds exist. An annual debt service chart attached to the agreement estimates nearly $3 million will need to paid on existing debt through 2035 for a total of about $44.8 million.
The press release adds that the settlement does not admit liability by any party involved in the lawsuit.
In court filings, an accounting firm retained by the county and school district to audit the city’s spending identified millions of potentially misspent funds among other issues, but city officials have argued the accountant doesn’t understand the law and is making assumptions based on an incomplete review of information.
The defendants’ attorneys have continually called the lawsuit “baseless” in court documents — unsuccessfully asking the court to dismiss the case on two occasions — 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.
That statutory authority expired Dec. 13, 2020, though the defendants’ attorneys asked the judge to consider extending that authority by essentially pausing the deadline from when the suit was filed.
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, and they filed a countersuit as a result, though that will also be resolved by the settlement.
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. The parties are all responsible for their own attorneys fees, according to the agreement.
This story was originally published July 14, 2021 at 11:13 AM.
