A group of Camden residents unhappy with the city’s multimillion-dollar plan to build a downtown YMCA has filed a lawsuit that observers say could clarify state law on legitimate uses for tourist-tax revenues.
The two-percent tax on restaurant meals is a widely used revenue source for SC cities and counties. But state law stipulates the money be used for “tourism-related” projects, and the SC Hospitality Association says local governments take liberties with the phrase.
The suit was filed last week by a group formed because they disagree with how the city intends to use about two-thirds of the restaurant-tax money it started collecting late in 2009.
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“As it stands, the hospitality-tax funds would be pretty close to used up for the next 20 years by building the Y,” said Herbert Farber, chairman of the Camden Committee for Responsible Government. “A lot of us are upset about that.”
City Manager Kevin Bronson said Camden’s leaders have bent over backwards to ensure its signature project would attract out-of-towners for weekend tournaments. The $5 million to $6.5 million sports complex would have a gym, space for an indoor pool and two, multi-use playing fields for soccer and la crosse. During the week, it would be available for local play.
“That would meet any interpretation of the hospitality-tax statute,” Bronson said.
State law does not define what is meant by “tourism-related,” and state courts have never been asked the question, said those knowledgeable about local government. State law began allowing the local tax in 1997.
Tom Sponseller, director of the SC Hospitality Association, said city and county leaders cover themselves by stipulating that sports facilities they build with hospitality taxes are available for tournaments. “Is that based on a percentage of use?” he asked. “Or just the fact that it’s available.”
A judge is being asked to decide. The Camden case, filed in Fifth Judicial Circuit Court in Kershaw County, could set a precedent or guide other jurisdictions, depending on how broadly the opinion is written and whether it’s appealed to higher courts, observers said.
The case comes on the heels of challenges in Columbia and Richland County over what kinds of food and drink the restaurant tax can be collected on.
Margaret Pope, the city’s bond lawyer, declined to comment. The citizen group’s lawyer is Weston Adams III.
Robert Croom, a lawyer with the SC Association of Counties, said each community needs the flexibility to determine how best to use the revenues.
“In some of these communities, anything to bring somebody into town — even if it’s a couple or three times a year — is salvation,” he said.
In the autumn, tourists drive through Oconee County in the Upstate to look at leaves as they change colors, he said. But visitors were driving through Walhalla until the town used some of its tourist taxes to build public restrooms. Once people stopped, they began to shop and get a bite to eat, he said.
More recently in Richland County, some objected to using $1 million of tourist-tax money to buy Caughman Pond for a 44-acre park in Lower Richland because advocates didn’t develop a plan for attracting tourists.
In Camden, Bronson said the sports complex would be built on about nine acres downtown, where the private boarding school Mather Academy once stood. Architects plan a façade with a flavor of turn-of-the-century design.
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