Controversial MBREDC Project Blue on Hold for Now
By Paul Gable
The Myrtle Beach Regional Economic Development Corporation (MBREDC) has requested the final vote by Horry County Council on Project Blue incentives be delayed from its currently scheduled September 4, 2012 regular council meeting.
Third reading approval and public review of Ordinance 53-12 was listed as a published agenda item for the September 4th meeting. The ordinance proposes to issue up to $8 million in county general obligation debt to help fund incentives of the project. However, Grand Strand Daily has learned the agenda has been changed and re-published without Ordinance 53-12 being included.
According to information we have received, MBREDC CEO Brad Lofton notified county officials in an e-mail late Thursday afternoon that, while the project retains full support of the MBREDC, the agency was requesting a short delay before third reading is considered by council.
Project Blue ran into trouble earlier in the week when myhorrynews.com broke a story about the criminal history of Covation COO David L. Rocker, which includes a tax fraud conviction, jail sentence and continuing tax liens.
(Financial problems for officials of new companies looking for public dollars to finance a startup are never a good thing.)
While support for Project Blue at the MBREDC may have remained strong (the project has been described by Lofton as ‘Horry County’s Boeing’), support among the public for giving Covation up to $24 million in public money incentives is not there.
The total public incentive package is not firm either as the S.C. Department of Commerce delayed consideration of a $750,000 cash grant for the project until December.
Tea Party members and other citizens were planning to speak against the project during public review prior to third reading, according to information provided to Grand Strand Daily.
The MBREDC has tried to build support for the project with constant emphasis on the alleged 1020 jobs it will produce in the county. No one is against creating jobs.
What draws disapproval of the project, in the public’s eyes, is buying these jobs with $24 million in public money. This is especially true when it is taken into consideration that Covation is a startup company with no track record and, currently, no signed contract to provide service from the call center it plans to open.
Additionally, the secrecy that the MBREDC tried to maintain about the project, while asking the county to put $10 million in public money at risk as its portion of the incentive package, is not popular. When government operates behind closed doors, it is never a good thing for the general public.
However, this project is nowhere near dead at this point. MBREDC board chairman Doug Wendel is a master at the carrot and stick approach to gaining public officials’ approval for unpopular projects.
One has to look no further than the baseball stadium at 21st Ave. N and Bob Grissom Parkway, which has pulled a constant flow of public dollars into a seemingly never ending hole, or the scrambling by Myrtle Beach city council to expand its convention center with a questionable amphitheater, to view what he can accomplish.
With several contested council elections this fall and at least one current council member looking to replace Tom Rice as chairman, if he is elected to Congress, I’ll bet the phone calls about potential fund raisers and campaign donations have already begun.
For those council members not fortunate enough to be in that position, the old ‘bend the arm til it breaks’ approach will be used by local interests who stand to gain financially from the project moving forward.
Of course it doesn’t always work out. The Green Diamond Project, in the Columbia area, remains an example of governments saying ‘no’ to that kind of pressure (or maybe not enough ‘consideration’ was spread around).
Several innings of this game remain to be played before we know the final result. In our opinion, a bidding war for a startup company and trying to buy jobs with public dollars is not good government policy.
But, we must always remember – this is Horry County, the rules are different here.
So long as our State’s tax structure is centered around the income and fees it seems that there is an insatiable need for politicians to curry favor of companies by using taxpayer money to buy influence for themselves. Government should be in the business of creating the best environment for all businesses, not picking winners and losers.