Sanford, in letter to Cabela's chief, reiterates stand on state incentives
By John McDermott , Kyle Stock
Read the letter
Gov. Mark Sanford's first shot appears to have missed the mark, so he fired off another round this week.
The target: Cabela's Inc., the outdoor sporting goods chain that would reap a windfall from legislation approved to entice the company to build a store in North Charleston.
Sanford, who opposed the deal state lawmakers crafted, wrote a letter this week to Dennis Highby, the retailer's chief executive officer, reiterating his objections. He noted that smaller, locally owned retail companies seldom get state incentives and he also questioned the economic impact claims that Cabela's has linked to its stores in other states.
Sanford called his two-page missive "a follow up," noting that Highby did not respond to a similar letter sent in November 2006. He also said, "I would hope this time for a response on these matters."
Highby was out of the office Wednesday and had not yet seen the letter, said Cabela's spokesman Mark Nelsen. The Post and Courier faxed a copy of the letter to the company, but Nelsen declined to comment.
Siding with small retailers, Sanford said the tax incentives issue boils down to a question of fairness.
"Let me again be equally clear on how much we would love for you to come to this state," Sanford wrote. "Our only objection lies in paying you to come so that we effectively give your company an unfair advantage over smaller competitors around the state."
The debate over Cabela's began in early 2006, when North Charleston Mayor Keith Summey disclosed that the retailer was seeking land in his city for its first South Carolina location.
Summey also said the Nebraska-based chain expected various tax incentives, which the state traditionally has not offered to retail businesses. Cabela's was an exception because its huge, elaborately decorated stores would draw thousands of new tourists to the Charleston region, Summey and other supporters said.
Sanford did not buy that argument and twice vetoed legislation for incentives tailored to a retailer like Cabela's.
The General Assembly overrode his veto both times.
The most recent law allows sales tax rebates and tax credits on jobs created for "an extraordinary" store that invests at least $25 million in its site, attracts at least 2 million visitors a year and remits at least $2 million in sales taxes every 12 months.
Cabela's has posted huge profits in recent years, thanks in part to government grants. In 2006, its net income was $85.8 million, and at the end of the year it had deals to collect another $14.4 million in government grants if it met certain benchmarks.
Sanford, however, noted in his letter to Highby that Cabela's has fallen short of some of those thresholds.
He claimed that Cabela's has not paid off as expected for communities in at least eight states. In Texas, for example, Sanford said, the chain had to return $200,000 for not creating at least 400 jobs. A Minnesota store, meanwhile, "fell well short of the necessary 3.5 million visitors a year required to qualify for special subsidies," he continued.
Bass Pro Shops, one of Cabela's main competitors, opened a Myrtle Beach store in 2004 without state incentives, though it is pushing for deal-sweeteners for a potential location in Greenville.
Nelsen said his company has not committed to building a store in North Charleston and he does not know how seriously it is considering a Palmetto State presence.
The governor, meanwhile, will try to get lawmakers to repeal the incentives legislation when they reconvene in January, according to spokesman Joel Sawyer.
"This is kind of a unique situation," Sawyer said. "A lot of folks, particularly small-business owners, just don't think it makes a lot of sense."
Reach Kyle Stock at 937-5763 or kstock@postandcourier.com. Reach John McDermott at 937-5572 or jmcdermott@postandcourier.com.
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poorboy (anonymous) says...
Hey maybe North Charleston, Noisette and Keith Summey would like to get invoved using one of his special financing deals?
Good move Gov Sanford, a fair playing field that's all anyone is after! If the do not meet the criteria already set by the state then, please come here but we can give the incentives. That would open a can of worms if the state did that.
November 29, 2007 at 6:18 a.m. ( permalink | suggest removal )
Beachbumwannabe (anonymous) says...
If Cabela gave a LARGE UNDISCLOSED CONTRIBUTION to one of Mark Sanford's 6 secret nonprofit groups I suspect this problem for the company would go away.
After all...there must be a reason why rich out of state people and groups give LARGE UNDISCLOSED CONTRIBUTIONS to Sanford and his buddies.
So wise up Cabela and write the check and put this problem behind you. No one will ever know except the elite few that welcome these contributions:privately, and presumably, happily.
November 29, 2007 at 7:09 a.m. ( permalink | suggest removal )
nty05 (anonymous) says...
I may not agree with everything that Gov Sanford has done in the past, but this time I owe him a huge THANK YOU! There is absolutely no reason a STORE should receive a tax incentive. I highly doubt tourists are going to consider a vacation in the Lowcountry because there is a Cabela STORE in North Charleston! And, to our legislators- Shame on you! You probably vetoed this just to spite Sanford instead of thinking about your consitituents. Thanks for looking out for us and thinking about spending our tax dollars wisely! I'll make sure I vote for you again!
November 29, 2007 at 7:24 a.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
You want to tell us about these 6 secret nonprofit groups giving undisclosed contributions to Mark Sanford beach? You keep coming up with this crap, I'd like to hear something to back it up, like how you know about "secret" groups and "undisclosed" contributions.
I think the governor advocated something that went against your socialist desires and now you're spreading pure bulls##t in retaliation.
November 29, 2007 at 8:29 a.m. ( permalink | suggest removal )
Jetdocc17 (anonymous) says...
So here we go again, lets continue to build a hotel on every corner and a restaurant in every parking lot but tell the big retailers that we take a firm stand as a state and city by not allowing some tax breaks. Meanwhile the revenue generated from the store through jobs, tourists, consumers and all of the other business it would bring to the area via transportation and warehousing goes down the drain. Life is life, and these small retailers will not close down simply because a large specialty store moves in down the street. I feel for Summey, try as he might (Vought, Global Aeronautica, and Google) he continually gets shot down from either Columbia or Charleston. The South Carolina unemployment rate is at 5.8%, a full 1.1% over the national average, so after the first of the year when the rate jumps higher because of the retail stores using temporary hires for the holiday rush the tax dollars we spend on unemployment will be well worth it by not giving the tax breaks to companies that can employ the unemployed. I would rather see a company get into an area and generate jobs and revenue instead of reading the paper or watching the local news about how these companies go to other areas and create hundreds of jobs (such as EADS).
November 29, 2007 at 9:17 a.m. ( permalink | suggest removal )
Edwin435 (anonymous) says...
yeah what he said.....
November 29, 2007 at 9:17 a.m. ( permalink | suggest removal )
Localjoe (anonymous) says...
The state job and tax credit incentives were desigend to lure industry to the state. These incentives are very effective in that arena and the powers that be have done a fairly decent job in tailoring them to ever changing needs of the diverse spectrum of employers that shop states against one aonther for locations. These incentives do not belong in the Retail sector. Retail establishments pay lower than average wages and will shutter their doors quickly if the whims of a shopping public shift to different shopping patterns or tastes. It doesn't make sense to me that a company who wants to make money from us walking in a buying something from their store should also have the audacity to ask us to subsidize their risk and bottom line just to locate in our neighborhood. I realize they bring in sales tax revenue, but much of that revenue is already being spent al local retailers and would just be shifted to the 'big box' instaed of the already established mom & pops. If Mayor Summey wants them so bad he should offer a rebate of the sales tax to the store.... yeah that's what i thought... He doesn't want to give up his revenue he wants the state to give up theirs.....
November 29, 2007 at 9:18 a.m. ( permalink | suggest removal )
CHRISJIII (anonymous) says...
Good job on this issue Governor Sanford. I agree with nty05 that the legislature was just being spiteful at the expense of their constituents. Lets you know where their real interests lie.
November 29, 2007 at 9:35 a.m. ( permalink | suggest removal )
wegwam (anonymous) says...
that a boy, Gov
November 29, 2007 at 10:59 a.m. ( permalink | suggest removal )
jscampb (anonymous) says...
Jetdocc17- The unemployment rate in Charleston for August through October is at 4.7% so that is not low due to temp. jobs. In fact, it is lower now than it was last December. And I am pretty sure that the tourism industry that you mentioned would use those "hotels on every corner", and "restaurant in every parking lot", more than they would use the same department store that they most likely have in their own town. LocalJoe is correct in his explanation of the designed use of tax incentives, as well as the economics of another big box store. I think this was a great decision that Sanford made, no matter the reason.
November 29, 2007 at 12:23 p.m. ( permalink | suggest removal )
mggoose2000 (anonymous) says...
Jetdocc17,
What planet have you been living on? You don't believe that big retail chains cause small business in the area to close their doors? I can name several in the lowcountry that have closed because of Walmart and K-Mart.
I buy items from Cabelas and I do it online. To give a big company like this incentives to move their store into our area is unfair to the smaller, Mom and Pop stores that cannot buy in the volume that the bigger stores can.
Kudos to you, Gov. Good job!
November 29, 2007 at 12:32 p.m. ( permalink | suggest removal )
gencon1 (anonymous) says...
What part of 'equality under the law' is fuzzy? The size of the business shouldn't matter. Everyone should be treated equally.
November 29, 2007 at 12:37 p.m. ( permalink | suggest removal )
gencon1 (anonymous) says...
Good job Governor!!!
November 29, 2007 at 12:39 p.m. ( permalink | suggest removal )
misfit (anonymous) says...
I appreciate the Governors stance on this issue, but if I read the article correctly, it won't matter. "The General Assembly overrode his veto both times."
Enjoy your success Cabela's, its on the taxpayer's tab. Once again, we can't afford roads, but we can afford to give Cabela's a free ride. People continue to vote conservative in this state, because they don't like giving free rides, but apparently free rides for companies like Cabela's are OK. Hey, at least it will provide some more minimum wage jobs, so we can claim unemployment is down.
November 29, 2007 at 12:41 p.m. ( permalink | suggest removal )
DixieTiger (anonymous) says...
Mark Sanford is the best governor in the nation. His no nonsense approach is exactly what all the people in the state legislature need to adopt. I can't believe that state representatives and senators would give state money (i.e. tax dollars from small businesses and their owners) to subsidize their competition (i.e. a nameless and souless corporation). The State Legislature disgusts me to no end and I can't wait to vote every single one of those idiots out of office next November!
November 29, 2007 at 12:57 p.m. ( permalink | suggest removal )
combahee (anonymous) says...
poli1471, I would agree with you except that with the exception of some rods and reels and some tackle the requirements for the freshwater fisherman is being met. If there was an overwhelming demand for more fresh water goods then the market would supply it. try ordering your tackle form your local store, they may not have enough demand to carry it but would be glad to order it. The reality is there isn't as big a demand in the Charleston area as lets say Columbia or Charlotte.
If Cabela's wants to open a store fine, let them. But why should I use my tax dollars to allow a private company to directly compete with other existing businesses? How does that help our home grown retail stores.
The retail stores in the marine, electronics and photo sectors are being killed by Internet sales and big box stores as it is. Add to this the ability of large big box stores like Cabela's to sell cheaper than your mom and pop down the street can buy! Where is the fairness?
If you think that is good for business you are wrong. They will drive the small local stores out of business, this in turn will cost more jobs and loss of income than they will create and then in turn will drive away most competition. When there is a lack of competition prices go up, not down. Next time you go to Wally World think about what you are doing to the small businessman. Then start checking prices. They use a lot of loss leaders but I bet that you can buy almost and marine product Wally World carries cheaper at a local store.
But hey why not use TAXPAYER dollars to give them a competitive advantage, isn't that the American way, big business above all?
November 29, 2007 at 3 p.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
Is that the same combahee that thinks federal tax dollars should be used for the SC gullah corridor instead of SC tax dollars, but state tax dollars can't be used for SC job expansion?
I'm not at all for the use of tax incentives for retail stores, but combahee should maybe get his story straight.
Oh wait...he thinks federal tax dollars are pennies (billions of them) that just fall out of the sky, while state tax pennies come out of his pocket.
November 29, 2007 at 5:48 p.m. ( permalink | suggest removal )
Bertha90 (anonymous) says...
What about fairness for smaller manufacturing / industrial companies? The bigger players like Bosch, Google, etc. come in and get a blank check in incentives such as tax breaks, infrastructure improvements. You think that is fair to the 100 employee manufacturer that gets squat and has to pay full taxes? These types of deals are happening monthly behind closed doors.
November 29, 2007 at 10:57 p.m. ( permalink | suggest removal )
combahee (anonymous) says...
majorjohnson do you always try to twist everything to your liking? One issue has nothing to do with the other.
NO I don't want my tax dollars to go to a retail store that may or may not, probably not create any jobs. Count all of the jobs that would be lost by local businesses before you talk about gaining any jobs. Then look at the hugh tax incentives given to these box box stores to compete with the local stores. Where is the gain in jobs?
November 30, 2007 at 6:33 p.m. ( permalink | suggest removal )
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