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Historic tax credits could offset millions for downtown Myrtle Beach investors

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MYRTLE BEACH — A million dollar figure for renovating downtown historic buildings in the arts and innovation district could be offset by up to 70 percent for potential investors and business owners, thanks to historic tax credits.

For Grand Strand Brewing Company, its owners and investor benefited from a 40 percent offset after taking advantage of the tax credits for the brewery and 10 lofts upstairs used for short-term rentals.

But, when going through the construction process to restore a building to highlight its previous state, you can’t just do whatever you want, said Clayton Burrous, an owner of GSBC.

“We had to follow a lot of guidelines,” he said, adding those guidelines are overseen at the state and federal levels.

Those rules boil down to decisions like the color of trim work and flooring. And if the guidelines are not followed, the tax credits will no longer be an option.

Each project must follow the 10 standards for rehabilitation, meaning "criteria used to determine if a rehabilitation project qualifies as a certified rehabilitation," required by the National Park Service, which oversees these projects through its Technical Preservation Services department.

A business is also required to refrain from making any changes for five years to the structure.

“It is a process,” said Lauren Clever, the city’s director of downtown development. “The city made it easy to start by creating a district (in 2019)."

So far, Grand Strand Brewing and Mashburn Construction have taken advantage of the credits downtown. Myrtle Beach’s historic district is located near 9th and 8th Avenues North in the area mostly between Broadway Street and Kings Highway.

There are about 26 buildings in the district, with 18 currently on the historic registry.

Buildings must be at least 50 years old and historically significant to qualify.

Though taking advantage of the credits is not required, it can offset the cost of construction by up to 70 percent, said Janie Campbell, a preservation consultant with Rogers Lewis Jackson Mann & Quinn, LLC.

The credits also include an abandoned building credit, which is up to 25 percent, and applies to buildings that have been 66 percent vacant for the past five years, Campbell said.

The city is in the process of registering three of its buildings downtown as historic properties.

One was the original Broadway Theater, and on either side are the former J&J Drugstore and a department store. The city plans to make all three buildings into a theater and partner with Coastal Carolina University to use as a satellite theater.

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The Grand Strand Brewing Company is now open in downtown Myrtle Beach, a product of historic tax credits that allowed them to redevelop the site. Nick Masuda/Staff

The HTC Aspire hub, at 509 9th Ave., is currently under construction. And it’s possible the city’s library could move to this downtown district at some point.

Burrous said he encourages those interested in taking advantage of the tax credit incentive to know that it works.

“You can get equity,” he said. “You just need a really good advisor.”

Clever said the city receives a lot of phone calls and people walking in, asking questions about the downtown area.

“Developing those kinds of experiences and connectivity throughout the district is what the plan is,” Clever said, adding the city hopes it becomes a place where people visit for an afternoon instead of it being a one-stop area. “Now that the brewery is here, it’s going to start generating that energy.

“You’re renovating buildings that didn’t have a purpose, and now they have a purpose,” Clever said.

Other areas take advantage of credits

The arts and innovation district isn’t the only area in Myrtle Beach’s city limits where business owners have taken advantage of historic tax credits.

Spots such as the Waikiki Hotel, Holiday Shores and Charlie’s Place have all benefited from the credits, Clever said.

Across South Carolina, other areas offering the credits include Aiken, Greenville, Columbia, Lancaster and Chester.

Most downtown areas in South Carolina cities have some kind of downtown historic district, Campbell said.

Beyond the tax incentives available, Campbell said with much corporate architecture currently, historic districts are important to towns and cities because demolishing buildings takes away the character in an area.

“It provides a sense of place for some people,” Campbell said. “It’s a way to preserve the uniqueness of each area.”

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The Grand Strand Brewing Company is now open in downtown Myrtle Beach, a product of historic tax credits that allowed them to redevelop the site. Nick Masuda/Staff

Reach Hannah Strong at 843-277-4687. Follow her on Twitter @HannahLStrong.

Hannah Strong covers growth in Horry and Georgetown counties. She is a native of Pawleys Island and graduate of Winthrop University. In her free time, she likes to read, surf and cook.

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