Myrtle Beach’s Grand Strand Brewing building now ‘historic,’ wins major tax breaks
The downtown Myrtle Beach building containing Grand Strand Brewing Company won a significant county tax break on Tuesday.
At a meeting of the Horry County Historic Preservation Commission, appointed commissioners voted to add Grand Strand Brewing’s building to the county’s historic register, which qualifies the property for a tax cut.
Under county rules, a property approved by the Historic Preservation Commission is assessed at its value prior to any renovations. The property owner is required to put 25% of the property’s assessed value into the renovations and if those upgrades meet historic standards, the property owner only has to pay taxes on the pre-renovation value, rather than the value after the improvements are made, for 15 years.
In Grand Strand Brewing’s case, the company that owns the building, GSBC Properties LLC, purchased the building from the City of Myrtle Beach in in 2020 for $453,000. According to records provided to commissioners by the property owner, Robert Lewis, put $3.9 million into renovating the historic features of the building and apartments on the second floor.
But rather than pay taxes on the value of the bulding post-renovation, Lewis and his company will only pay taxes on the building as if it were still worth $453,000. In South Carolina, that tax credit program is referred to as the “Bailey Bill” program.
“We put $3 million in it...if we didn’t have the Bailey Bill and it was going to be reassessed, instead of paying $2,000 to $4,000 a year, we’d pay something like $20,000 or even $25,000,” Lewis said. “That’s what we’ll be paying for the next 15 years. It’s a huge benefit. It’s a way of giving developers like us an incentive to come in an area that people aren’t developing at that time.”
Lewis also noted that the building has qualified for federal tax breaks, too, and could receive a 50% discount on state taxes as well. Such tax credits allow a development firm like Lewis’ to offset the cost of purchasing and renovating the building, he said.
“It’s been satisfying to go through this process to establish the Bailey Bill in Myrtle Beach and to establish a historic district in downtown Myrtle Beach and then represent several people taking advantage of the tax credits,” Lewis said.
In an email on Wednesday, Lewis said the historic designation will save him thousands on his local tax bills. With renovations included in the assessment value of the building, Lewis said his tax bill could total nearly $36,000, with $25,000 of that going to Horry County and $11,000 going to Myrtle Beach. But with the tax credit freezing the rate at the pre-renovation value of the buliding, Lewis said, he’s looking at a $7,160 tax bill — roughly $5,000 for the county and $2,200 for Myrtle Beach. It’s a savings of nearly $30,000 per year, Lewis said.
Over the 15-year span of the tax break, Lewis could see tax savings up to $400,000, he said.
“Another way we, as owners and investors, look at this is the increased cash flow,” Lewis wrote. “We will net an additional $28,640 annually in net income/profit from the lease income directly resulting from this (historic property) incentive and us not having to pay the increased property tax assessment.”
For the company and its building, its the latest round of public assistance. Myrtle Beach in recent years designed and constructed Nance Plaza which sits directly in front of the business, both of which opened earlier this year. The city hailed the plaza as a piece of infrastructure to draw people to the businesses along that section of Kings Highway, and even adjusted the plaza to fit the needs of the brewery.
Grand Strand Brewing is located at 819 N. Kings Highway and is the latest commercial tenant of the building. Previously, Edward’s 5¢ - 10¢ - $1.00 Store filled the space, and was originally constructed in 1950. Developers fixed the building’s exterior masonry, upgraded its storefront and windows, restored the building’s metal canopy and sign out front and renovated the interior of the building as well. The second floor of the building was remodeled into apartments that are rented out as vacation rentals on the website AirBnb.
Lewis said the reason the Grand Strand Brewery building has gotten so much public assistance is because it’s an “impetus project,” meant to spark redevelopment of other downtown Myrtle Beach buildings.
“It’s great to go down there now, but three years ago, just three years ago, when we were talking about doing this, we had people on City Council tell us it was a bad decision, that people were getting shot and that it was not safe,” Lewis said.
He said the brewery is serving as an anchor of a quickly redeveloping downtown. Lewis’ firm is also involved in helping other buildings in the area win historic status and tax breaks.
“We weren’t put off by that perception that it was not a great area,” he said. “We had seen what one really good project could do in one fringe or secondary area in a town.”
Editor’s note: This story has been updated to include additional information from Lewis.
This story was originally published November 17, 2021 at 6:58 AM.
