Sembler subsidy threatens economy, environment

In the midst of a struggling economy, the S.C. Legislature is poised to give away millions of taxpayer dollars to an out-of-state developer to build a retail mall near Hardeeville. Our two organizations have raised serious concerns about this proposal. We would now like to shed some light on the potential damage the proposed development could cause for the economy and the environment.

The Legislature is debating whether to provide as much as $175 million from the state general fund -- dollars that are supposed to be spent on schools and law enforcement -- to the Sembler Corporation. Economists have analyzed the plan and concluded that there will be no net benefit to the economy and no net job creation. Instead, they believe existing retailers will lose their business - and possibly their employees -- to a competitor they are forced to subsidize.

Millions of dollars that were available for core government services for all South Carolinians will be diverted to a single powerful out-of-state developer. This would be foolish economic policy under any circumstances, but it is especially egregious in the current economic climate.

Furthermore, the mall is sited in one of the most sensitive areas within the Okatie River watershed. Conservationists are very concerned that the Okatie is already on the verge of substantial decline because of three decades of poorly planned development. They believe the Sembler project, with its 225 acres of parking lots and roofs, will ensure the rapid and permanent degradation of the river. Furthermore, experts conclude that current technology won't protect the Okatie from the runoff generated by huge expanses of pavement laden with heavy metals, petroleum compounds and bacteria.

The developer says he won't build the project if he doesn't get incentives. Taxpayers should be wary of an investor who cannot raise his own capital to build his project, and who isn't willing to address environmental concerns unless he's plied with public money.

Other businesses in the area have invested their hard-earned dollars in their companies, and have abided by state and local environmental standards without public compensation. Now they will be forced to pay the cost of a competing company that has done neither. Committing public funds for any retail project is a highly questionable practice, begging the obvious questions: Where does the state or county draw the line? Why not subsidize every new Hardees, CVS and Walmart?

To date, no other retailer in this region has received public subsidies. The nearby Tanger outlet mall is a prime example. It stands to lose business, profits and jobs to Sembler based on this skewed financial arrangement engineered by the Legislature.

Economists flatly state that retail incentives don't benefit the economy, but rather damage it. Transportation experts also object to this particular kind of project because it overloads already stressed roads and would add to the gridlock in southern Beaufort and Jasper counties. These concerns illustrate precisely why legislators in Columbia shouldn't be cutting deals inside the Statehouse that they cannot possibly examine from every angle. They hear from a few well-paid lobbyists and consultants, who are not held accountable for the accuracy of their facts and figures, and then make decisions that the rest of us have to live with.

We believe private companies should put their own capital forward, not that of taxpayers. They should take the risks and reap the rewards, and they should assume the responsibility of good citizenship in the communities in which they operate.

Unfortunately, lawmakers seem determined to ignore that majority view. The Sembler project has breezed through the Legislature, with only a few lawmakers raising concerns that are shared by hundreds of thousands of South Carolinians.

In fact, the project appears to be a high priority in the Senate. Tax policy, environmental issues and social concerns will move down the list because senators listened to lobbyists.

Is a special tax break for a wealthy developer really more important to the public than addressing our state budget problems? We are certain that it is not, but lawmakers are stubbornly pushing forward in debating this damaging and costly plan.

Decisions about environmental protection and fiscal responsibility are rarely simple. In this case, however, the answer is blindingly evident. The state should not subsidize the Sembler project or others like it.

Lawmakers such as Sens. Greg Ryberg and Tom Davis, and Rep. Shannon Erickson have echoed our concerns. Other policy makers have a responsibility to examine all the facts closely before deciding to put taxpayers on the hook for a risky retail mall with negative implications for our natural resources.

Ashley Landess is president of the S.C. Policy Council, a non-partisan think tank promoting free market economic policy. Dana Beach is executive director of the Coastal Conservation League.