Myrtle Beach votes to settle Market Common lawsuit with Horry County, school district
The City of Myrtle Beach took the first step in ending a yearslong legal battle involving three of the Grand Strand’s largest public agencies.
City council authorized its city manager Tuesday to execute a settlement agreement to resolve its lawsuit with Horry County Schools and Horry County, though city officials declined to reveal details before those other entities also approved the deal. The school district also approved the settlement Tuesday.
The school district and county jointly filed the suit in December 2018 in an effort to prevent the city and Myrtle Beach Air Force Base Redevelopment Authority from continuing to take on debt to keep redeveloping 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.
As a result, the school district, county and other tax districts cannot collect additional tax revenue on the increased value because it is earmarked for development and infrastructure within the TIF district.
The other entities still need to approve the settlement agreement before it can be submitted to a judge. The county and redevelopment authority all have the agreement on their meeting agendas Tuesday.
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.
The case has stalled since November 2020, online court records show, with an unresolved motion by the city seeking a partial summary judgment.
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.
This story was originally published July 13, 2021 at 11:39 AM.
