Beach rental business aims to prove North Myrtle Beach running monopoly, and slander
A family-run beach gear rental business is accusing North Myrtle Beach of running a monopoly and tarnishing its reputation, according to lawsuit filed in federal court this week.
In a 20-page motion, Cherry Grove Beach Gear owner Derek Calhoun says city leaders are violating antitrust laws by refusing to consider them for a franchise allowing the installation of rental equipment on public shores.
City officials, the suit argues, wrote a “sham” law “designed to restrict competitive business practices and monopolize business in order to maximize profits.”
North Myrtle Beach spokesman Donald Graham said the city won’t comment on pending litigation. On Tuesday, the City Council met privately to discuss the lawsuit with its attorney. It’s the second federal lawsuit in a week filed by a private business.
The ongoing fight between Cherry Grove Beach Gear and City Hall has been closely followed by many in the community of almost 17,000.
North Myrtle Beach has restricted private commerce on its sands since 1990, when the council first required vendors to get a franchise agreement. The rules have been tweaked several times since, most recently in 2010 when authorized hours, placement and size of shading devices and removal of equipment was written into the law.
The lawsuit alleges North Myrtle Beach have made knowingly misleading statements online and at meetings that amount to defamation and slander, but does not give examples.
Businesses have always been allowed to lease or sell gear online or make deliveries to off-site locations, but controlling the rental market is a key revenue stream for the city -- an issue the lawsuit points to as monopolistic, since it doesn’t return collect and remit taxes from the roughly $3 million it gets from sales as a private company would.
North Myrtle Beach currently has franchise agreements with a trio of companies that offer banana boats and parasailing, but won’t consider a business relationship with Cherry Grove as long as it continues to violate local law.
This story was originally published July 18, 2022 at 5:00 AM with the headline "Beach rental business aims to prove North Myrtle Beach running monopoly, and slander."