School district threatens lawsuit against Myrtle Beach over Market Common tax base

King Street Grille at The Market Common. Photo by Scott Smallin, Weekly Surge staff.
King Street Grille at The Market Common. Photo by Scott Smallin, Weekly Surge staff.

Horry County Schools and the county threatened a lawsuit against the City of Myrtle Beach to “protect taxpayers,” according to a statement released Tuesday.

On Tuesday, city council approved an amendment to the Tax Increment Financing district created by the state legislature to develop the former Myrtle Beach Air Force Base, now The Market Common area, and removed several bond projects including a proposed school in the area.

The school was originally planned as a K-5 school, but school officials said it could have been a program school as well.

The removal of the school has raised the ire of some in the school district.

The original TIF included a $20-million bond referendum that would have paid for a new school in the area. That project was removed with the amendments approved by city council members on Tuesday.

“As far as the TIF’s concerned, they did make promises to us,” said District 1 school board member Holly Heniford. “We have a letter where they agreed to give us the land for the school. There was a written correspondence to the fact that the city was going to give us land. It’s unfortunate that they decided to go this route, but we have to protect our interests.”

The school district will ultimately get more money back over the life of the TIF than they would have under the old plan, but it’s essentially school district tax money that they paid into the TIF to promote development of The Market Common.

And while city leaders say that the taxes generated for the school district through the TIF wouldn’t have occurred without the development of The Market Common, board members aren’t happy about what they see as a broken promise.

“They invited us to help pay for a party, when the party happened, they told us we couldn’t come,” Heniford said.

Board member David Cox, who read a statement in front of city council, said that that a 2006 letter to the district from then City Manager Thomas Leath promised that “the school project would be given priority among the projects in the plan going forward.”

In an email, city spokesperson Mark Kruea said The Market Common had less than 200 students at all grade levels, and that the district’s five-year capital improvements plan didn’t call for a school in the area.

But Heniford said that’s not accurate, because the district doesn’t officially have a five-year plan yet.

“We don’t have a five-year plan,” she said. “That has to be firmly mentioned. We don’t have a five-year plan. The board has not discussed it in any depth. Staff put together a draft, but it has gone no further than that.”

Cox and Horry County Administrator Chris Eldrige said the TIF should end, rather than removing development projects in order for the TIF to fund ongoing maintenance in area.

Eldridge said The Market Common should rejoin the tax base of other jurisdictions like the county and school district.

“It is unfair to ask county and school district taxpayers to bear the cost for ongoing maintenance expense that should be borne by the city’s general fund,” Eldridge said.

Cox said the county and school district may take action to protect citizens.

“If the plan proceeds as proposed, our respective governments may need to take action to protect our taxpayers,” he said.

When asked about possible legal action, district spokesperson Lisa Bourcier said “the school board will likely discuss what the next steps may be regarding the approval of the amendments.”

In total, the city approved almost $47,000,000 in improvements to The Market Common during Tuesday’s council meeting, including an expansion project for the fire station, an additional deck in the parking garage, the extension of Howard Avenue and an additional parking lot.

City councilors did not approve any funds during the meeting. During first reading, council members debated on voting to split funds between the city, school board and county.

If the decision had passed, the city would have received more than $1.4 million, the county would have received almost $985,000 and the school district would have received about $2.5 million, starting in 2019.

But after school and county officials threatened to take action, Myrtle Beach Chief Financial Officer Mike Shelton recommended officials continue the discussion to a future meeting.

“During public hearing there were comments made by representatives from the county and school district, where they basically threatened litigation if council adopts the plan,” Shelton said. “And so, my comment was based on advice to council, if there is the threat of a lawsuit, and apparently there is, that it would not be prudent for us to ask the redevelopment authority to declare a surplus.”

Christian Boschult, 843-626-0218, @TSN_Christian

Megan Tomasic, 843-626-0343, @MeganTomasic