The nickname of a bill that would provide tax breaks for a proposed retail development in Jasper County dubbed Okatie Crossings – and other projects – might tell taxpayers all they need to know about the legislation.
A bevy of lawmakers refers to it as the BAT bill.
That stands for “big-ass tax” bill.
No joke: In interviews with The Nerve, several members of the General Assembly called it the BAT bill as if doing so were standard practice.
Eventually, as The Nerve did not know what that meant, a Senate staffer explained it.
Laughter ensued. Then questions, beginning with: What, for the love of good government, is the BAT bill?
Think of it as an everything-but-the-kitchen-sink measure that addresses mainly tax code and economic development matters. Hence the nickname. The BAT bill is sizeable, significant and a feature of just about every legislative session, at least in the past several years.
Underneath several layers of the current BAT bill onion, a connection exists between it and an unprecedented incentives package for the Boeing Co. that legislative leaders crammed through the State House during a two-day special session in October.
But more about that a little later.
Lawmakers describe the BAT bill as “catch-all” and “cleanup” legislation.
“I’ve not been a fan of BAT bills in the past,” says Sen. Vincent Sheheen, D-Kershaw. Sheheen says he has voted for some of them. But he says BAT bills “are just a jumble of unrelated items” that raise problems vis-à-vis the S.C. Constitution, which mandates that “every act or resolution having the force of law shall relate to but one subject.”
Nevertheless, the BAT bill usually clears the Legislature and becomes law.
Not last session, however.
No, in 2009 the BAT bill got hung up in a conference committee that was trying to work out a compromise between differing House and Senate versions of the legislation.
The reason for the bog down: Sen. Greg Ryberg, R-Aiken, objected to the proposed incentives for the would-be Jasper County retail development.
Headquartered in St. Petersburg, Fla., the Sembler Co., a big-dog retail developer in the Southeast, wants to build Okatie Crossings on about 270 acres right off Interstate 95 near the small town of Hardeeville.
That location features a huge volume of interstate traffic near an upscale residential community named Sun City and the mostly affluent Hilton Head Island.
Okatie Crossings would be a “1.7 million square feet regional shopping center,” the Sembler Co. says in an undated news release on its Web site. “No tenants have been announced at this time, however the development will feature a great variety of restaurants and retailers, some of whom will establish a presence in South Carolina for the first time.”
Sen. Clementa Pinckney, a Democrat from Jasper County who is championing Okatie Crossings and the incentives proposed for it, describes the project as a “high fashion” retail cluster. “Think of (the Village at) Sandhills in Columbia – plus,” Pinckney says.
The incentives would flow to Sembler via state sales tax revenue generated at the development. A portion of that money would be refunded to the company to offset a large chunk, if not all, of its infrastructure costs for Okatie Crossings.
The tax break would expire after five years. And Sembler could not qualify for it until the company hires at least 1,000 people and invests a minimum of $100 million, according to Pinckney. “They have to have some skin in the game in order for it to work,” he says.
A three-page handout on Okatie Crossings that Pinckney distributed in the Legislature says the project would:
- Amount to a $379 million capital investment;
- Create 2,000 to 2,500 jobs; and
- Generate about $174 million in state sales tax revenue in the first 15 years of the mall’s existence.
But be that as it may, Ryberg isn’t buying what Sembler’s selling.Efforts to reach Ryberg were unsuccessful. He did not return numerous messages from The Nerve left at his home and Senate office and on his cell phone from October through this week.
But Ryberg did pen an op-ed about his position on the Sembler incentives that was published in his hometown newspaper, the Aiken Standard, in mid-December.
“The developers of the mall, based upon their own projections, would receive the benefit of $131.5 million of your tax money,” Ryberg wrote in his guest column. “That provision led me to block the bill in the Senate. I oppose taxpayer funding of common economic activities such as building a shopping mall.”
Rather than bring in new, high-end retailers, Sembler plans to recruit existing, garden-variety companies – Kohl’s, Target and others – away from sites near Okatie Crossings, Ryberg asserted.
“This is not a story about economic development and new jobs,” he said in summing up his take on the project. “It is a story about power politics, insider deals and economic piracy, all at taxpayer expense.”
Digging deeper into the BAT bill, one does indeed find ties between it and the insider world of economic development deals hatched underneath the copper dome of the state Capitol.
To begin with, former two-time S.C. Department of Revenue director Burnie Maybank co-wrote the Okatie incentives package, according to Pinckney’s handout.
Maybank, an attorney with the go-to economic development law firm in South Carolina – Columbia-based Nexsen Pruet – also is serving as chairman of the Tax Realignment Commission, which the Legislature created to scrutinize and recommend reforms to most of the state tax code.
Huh? Maybank inking tax-break packages and serving as chairman of the TRAC?
Seriously, we don’t make this stuff up.
Meanwhile, an entity calling itself the Sembler Family Partnership 32 spent $30,000 to lobby the Legislature in the first five months of 2009, according to State Ethics Commission reports.
Of that cash, Sembler Family Partnership 32 paid $20,000 to Larry Marchant, president of the Columbia consulting firm The Palmetto Policy Group, and the other $10,000 to Mary K. Dunning, former vice president of operations and policy for the firm.
Also on the money front, the Sembler Co. has contributed at least $3,500 to Lt. Gov. Andre Bauer. An Ethics Commission report lists the date of the donation as Sept. 29.
It gets better though.
The founder and board chairman of the Sembler Co. is none other than Mel Sembler, whose deep national political ties include stints as an overseas ambassador under both of the Bush presidents.
The remaining layers of the BAT bill onion unravel in understanding its connection to the Boeing deal.
“That (BAT bill) was one of the possible vehicles” for the Boeing incentives, House Speaker Bobby Harrell, R-Charleston, said in responding to a question from The Nerve on Jan. 7 during a workshop previewing the new legislative session that began Tuesday.
Valued by some unofficial accounts at up to $450 million or more, the giveaways to Boeing consist of state bonds and tax breaks tailored to buy an airplane manufacturing plant for South Carolina.
That factory, an assembly line for Boeing’s next-generation 787 passenger jet, is under construction in North Charleston. The incentives for it are tied to the company creating at least 3,800 jobs and investing a minimum of $750 million at the plant.
Sen. Creighton Coleman, D-Fairfield, and other lawmakers confirmed the BAT bill-Boeing connection.
Coleman is chief sponsor of a bill that would provide incentives for a $27 million-odd facility under construction in the Upstate region of South Carolina by the nonprofit Institute for Business and Home Safety, an insurance industry group.
The institute is building a site in Chester County to test the effects of hurricane-force winds and other natural hazards on homes.
Coleman’s legislation, S. 717, was folded into the BAT bill.
As it follows, the BAT bill contains yet a third proposed handout on behalf of South Carolina residents and businesses. That one is for tax and/or license fee credits for rehabilitating a textile mill site.
And what of the BAT bill’s current status?
Harrell said it probably would be appropriate for him to appoint the original House conferees to a new conference committee to go back to work on the legislation.
Senate President Pro Tempore Glenn McConnell, R-Charleston, said he too would reconsider it.
Given politicians’ fondness for pushing economic development incentives, look for that to happen in this legislative session – well – right off the bat.
Reach Ward at (803) 779-5022, ext. 117, or eric@scpolicycouncil.com.