Florence illegally blocked low-income housing, suit claims. It also hurt Myrtle Beach
Florence County leaders, after initially approving a low-income housing project, illegally introduced legislation that effectively killed it, a federal lawsuit alleges.
That move also effectively killed a similar affordable housing project in Myrtle Beach, the developer alleged, because they could have pursued building in the Grand Strand if Florence County had said no sooner.
Both projects are now off the table, developer DHD Jessamine alleged in the suit filed April 15.
The Myrtle Beach project, called the Savoy, would have been constructed in the Market Commons area — next to the WalMart — as an 88-unit complex, attorney Taylor Powell said. The Florence County project was called the Jessamine and would have consisted of 60 townhomes.
“The timing of the illegal conduct on the part of all defendants prevented this, which has caused additional damages due to the loss of the opportunity to pursue the Savoy,” the developer wrote in the lawsuit.
The suit comes as Myrtle Beach leaders are calling on state lawmakers to not restrict the low-income housing tax credits (LIHTC) that would have helped build both the Jessamine and the Savoy.
A lack of affordable housing for workers has been a consistent problem as Myrtle Beach and Horry County have grown.
“As everyone comes to visit our beaches and pack our restaurants, our workforce is crowded out,” Myrtle Beach Mayor Brenda Bethune told The Sun News recently.
Horry County leaders raised similar concerns at a recent budget hearing about county employees not being able to afford to live here.
Rent at the Jessamine would have run between $227 and $953 per month, depending on the resident’s income level and the size of the townhouse. Rent at the Savoy would have cost $331-$1,142.
The developer is seeking “multiple millions of dollars” in damages from Florence County, Powell said, but hasn’t specified a dollar amount.
A phone call seeking comment from Florence County officials was not returned prior to publication. Florence County Council members, named individually in the lawsuit, also did not respond to an email seeking comment.
What the lawsuit says
In its 70-page complaint, DHD Jessamine alleges that Florence County violated numerous statutes including the Fair Housing Act and Civil Rights Act because their complex would likely have housed Black people. The developer pointed to four similar projects it had built in the Florence area and said that residents of the Jessamine development would likely be Black because residents of its other projects are majority Black.
The developer also cited U.S. Census data showing that Black residents in Florence County are lower-income than white residents.
The developer secured low-income housing tax credits from the state for three projects in 2021 and had begun laying the groundwork for its Florence County project. The other two projects are an 88-unit apartment complex in Greenville and rehabilitation work on existing apartments in Myrtle Beach.
In South Carolina, developers can apply for tax credits for four projects at a time. The Savoy project in Myrtle Beach was fourth on the developer’s list, and Powell said the company would have pursued that project — and received tax credits for it — if it knew one of the other three had issues.
The Jessamine was planned as a 60-unit complex of townhouses in a “donut hole” of Florence County surrounded by properties within City of Florence jurisdiction. The land did not have specific zoning, according to the suit, and the developer received assurances from county officials that unzoned property could host affordable housing.
As developers laid the groundwork for the townhome project, they received nothing but approvals from county leaders, the suit states.
DHD Jessamine cited a May 2021 statement from the county planning director, who said the project “would serve a great need by promoting housing for a mix of incomes and backgrounds in the community and, from a location standpoint, aligns well with our targeted areas for new affordable and mixed-income housing.”
The developer also received various approvals from the U.S. Army Corps of Engineers, the South Carolina Department of Transportation and several departments within the county, according to the suit.
That changed in January, the suit alleges, after public notice was given about their project.
A cash offer, ‘racist’ comments, an ‘illegal’ moratorium
At that point, a group of city residents living near the county “donut hole” approached the developer and offered them cash to abandon the project and walk away, the suit states.
“(DHD Jessamine’s) representatives were told that money was no object to ‘make them whole’, even after Plaintiff’s representatives stated that such an offer was both unsavory and, from a practical standpoint, infeasible because the amount would be ‘in the millions,’” the suit claims.
The group of residents, living in a neighborhood called The Country Club, made clear they opposed “affordable housing of any kind, regardless of architectural style or quality” but would support “market rate” housing on the site, the suit alleges.
After the developer rejected the residents offer to “walk away” — in part because they had already accepted the tax credits to build the project — “media attention rose,” the suit claims.
The lawsuit cites a series of three articles published by the blog FITSNews in January. The articles quoted residents anonymously criticizing affordable housing projects.
The articles contained “racist” quotes from anonymous residents, which contributed to the county blocking construction of the Jessamine, the suit stated.
Will Folks, the editor of FITSNews, did not respond to an email seeking comment.
The Country Club residents then organized a meeting to oppose the Jessamine project, and a Florence County council member attended, the developer alleged.
The day of that meeting, the developer received a letter from a county council member in which the politician rescinded his earlier praise of the project and said the county would no longer assist the developer with related infrastructure, including installing a fire hydrant.
From that point on, DHD Jessamine described a “flare-up of discriminatory pressure” on the project by various officials.
That pressure culminated at a specially-called Florence County Council meeting on Jan. 27, when council introduced legislation to prevent building in all unzoned land in donut holes until the county completed a zoning study, the suit explains.
Completing the study, the developer alleges, would cause them to miss deadlines imposed by the state related to its tax credits, effectively “killing” the project. The suit notes that Florence County had only previously called such special meetings in response to hurricanes and anti-police protests.
The legislation was later revised to more closely apply to the Jessamine, the developer added.
“This revision was made so that the efforts of defendants to rush the adoption of an unlawful ordinance would have only the intended purpose of targeting and blocking the Jessamine,” the suit reads.
The developer added that if the county had blocked its project sooner, it could have turned to Myrtle Beach.
“If, at any time during the process, Florence County or Florence County Council had raised any issue with the Jessamine prior to the date when (the developer) was required to accept or forego the (tax credits) for the Jessamine, (the developer) could have notified the Housing Authority of its intent to withdraw the application for the Jessamine and accepted the reservation for the Savoy,” the suit states.
Myrtle Beach loses affordable housing
Powell, the attorney, said the developer lost the opportunity to pursue its Myrtle Beach project at the end of 2021 because the property owner moved on.
The developers had an option to purchase property in the city and “had the full support of the City of Myrtle Beach,” Powell said. The city was even willing to construct a new bus stop near the apartment complex, he added.
“The Developer is not aware of a site with a similar size or location in the area of the Savoy, and unfortunately the actions of Florence County have now prevented what may have been the only chance to develop much needed workforce housing in the Market Common area of Myrtle Beach,” he said.
Myrtle Beach spokesperson Mark Kruea, in an email, noted that the city wasn’t fully involved in the Savoy project and “didn’t have a role” in the timing of the Jessamine project. He also noted that the site considered for the Savoy has since been occupied.
Horry County Council member Gary Loftus, who represents the Market Common area where the Savoy would have been constructed, said he wasn’t familiar with the lawsuit, but had heard of the Savoy project. He noted that the area is already home to the former Air Force base housing, which is typically cheaper than other homes in the areas.
