by Sam Spence
In an eight-page report out today, the Johns Island Conservancy comes out forcefully against a proposed 'tax increment financing' (TIF) district on Johns Island which would provide funding for the initial development of the Kiawah River Plantation, a Beach Company project that's been in the works since 2007.
"The Johns Island Conservancy believes the use of Tax Increment Financing for the Kiawah River Plantation planned community is NOT in the best interests of Johns Island or the rest of Charleston County," the group posits in the plainspoken report by Charleston journalist Dan Conover, also a City Paper contributor. TIF districts, which commit a given amount of future tax revenue to pay for upfront infrastructure costs such as sewers and roads, are often used to revitalize blighted urban areas, but have grown more common in yet-to-be developed areas on the outskirts of suburbia. The Kiawah River Plantation site, which is seeking the benefit of about $84 million in tax revenue, sits at the southern tip of Johns Island near the end of River Rd. The majority of the money allocated to Beach would come from property taxes generated by the new development, money usually designated for local public schools.
The resort community proposal has generated a heated back and forth between top Beach Co. officials, conservation groups, and county council members over the past few months as the company surveys its options to move forward with development while avoiding as much of the associated risk as possible. Comments in September by County Councilman Joe Qualey, a critic of the company's plans, were met with an eight-page retort from Beach CEO Joe Darby. In addition to the TIF district, in October the Beach Co. announced it would also apply to establish and operate a public service district to build and maintain sewer improvements needed to support Kiawah River Plantation, a move criticized by the Coastal Conservation League.
The report notes that opposition to KRP is complicated, but its objections chiefly focus on the conservancy's view of what's in the public's best interest, "The idea that an exclusive development, on open farm land bordering the salt marsh is a 'conservation' project or merits public assistance just does not make sense." The report also takes issue with Darby's statements about the viability of the development without public assistance, "I cannot build the plan that was proposed and approved and promised to the community and all those special restrictions we put on ourselves without [some funding]. It won't make economic sense..." In fact, according to county planners, the financial sustainability of the TIF district is also dependent on a 6 percent rate, the rate at which second homes are taxed; primary homes are taxed at 4 percent.
The TIF, the report says, also raises questions over the role of government, putting the county in the position of choosing between individual taxpayers and private businesses as to who will pay taxes and who won't. The report concludes, "If the free market cannot sustain this venture, then the County should not be bailing out the Beach Company."
The report comes as County Council prepares to hear recommendations from staff on how to move forward: whether the county will sponsor the TIF and whether it will issue $11 million in bonds to fund the construction of sewer infrastructure in the area. Qualey has said that he hopes council will approve a two-week waiting period after county staffers present their report before a vote is taken on the proposals.