Governor moves to repeal retailer incentives

Thursday, 12 July 2007

Page 1 of 2 By Kristen Poland CHARLESTON -- Big box retailers are welcome in South Carolina, but not on the dime of the smaller, family-owned businesses that would be their competition. That was Gov. Mark Sanford’s message Wednesday at two news conferences. On Wednesday morning, Sanford visited Haddrell’s Point Tackle & Supply in Charleston before heading to Brown’s Bait & Tackle in Duncan.  Sanford visited the two South Carolina towns to push for repeal of legislation that could mean, as the governor said, “life or death to a lot of small businesses in the state.”  The legislation would allow the state to award tax incentive packages to large, outdoor retailers like Bass Pro Shops and Cabela’s. The legislation, which passed the General Assembly despite the governor’s veto, qualifies the retailers for job tax credits for every full-time position and up to 50 cents in rebates for every dollar generated in sales tax. While these types of incentives packages are typically used to draw large manufacturers and industry to states, it is not common to use such practices for retailers. The legislation expands on a bill that passed last year—also in spite of Sanford’s veto—when Cabela’s first expressed interest in building a store in North Charleston. Now it has been modified to include Bass Pro Shops in the hopes of enticing the outdoor retailer to locate in the Upstate. To date, neither company has committed to opening stores in the state. “I’m not here to say I don’t want Cabela’s or Bass Pro Shops to come to South Carolina, but I don’t think it makes good common sense to penalize small, family-owned businesses by using their tax dollars to bring new retailers to the state,” Sanford said. “Business shouldn’t be grown based on who has the best lobbyists in Washington; you ought to grow your business by competing in the marketplace.” The governor cited several other states that have grappled with the idea of offering incentives packages to large retailers like Cabela’s or Bass Pro Shops. States like Indiana, Georgia, Kentucky and Maine have rejected such legislation, while other states, including Kansas and Texas, asked the outdoor retailers to return rebate dollars after they did not fulfill sales requirements stipulated in the incentives package. The Austin Business Journal reported earlier this month that the state of Texas has asked Cabela’s to give back $25,000 it received from the Texas Enterprise Fund because the store did not sustain the required 400 jobs between two stores located in Fort Worth and Buda, Texas, over a three-year period. The state last year required that Cabela’s return about $35,000 in TEF grant money, as well as forfeit a remaining $200,000 payment. In addition, the company has been invoiced nearly $90,000 by the city of Buda, Hays County and the Buda Economic Development Corp. for falling short of job projections.  While South Carolina’s incentives package stipulates the retailers must attract 3.5 million visitors annually, invest at least $25 million and reach $33 million in sales, the governor says these are “false promises” because the tax benefits may be awarded based on assumptions that these numbers will be reached and without penalty if they are not reached.  "This legislation is premised on false promises,” Sanford said. “If each of these stores across the country attracts 3.5 million visitors each year, that means that every man, woman and child in America would have to visit one of these stores.” Sanford also refuted the idea that these companies are “destination retailers” that will attract tourists because of features that include aquariums, waterfalls and educational events. The governor predicted that few people will travel to South Carolina to shop at one of these stores given the proximity of Bass Pro Shops currently located in Atlanta, Savannah, Charlotte and Myrtle Beach. “The people shopping there are going to be people who are already shopping in South Carolina at stores like this one,” Sanford said. << Start < Prev 1 2 Next > End >>