THE COMMUNITY is split over whether Richland County should have offered a large retailer an incentive package to help it locate in the Midlands: Those who believe Costco would expand shopping choices and spur the surrounding economy lament that the deal seems to have soured, while others believe the county never should have considered giving a private enterprise perks that ultimately would be shouldered by taxpayers, including the new business’s competitors.
Frankly, county officials haven’t shared enough details to determine whether taxpayers would be getting enough bang for their bucks. But what is clear is that County Council should take this opportunity to openly debate the broader issue of extending incentives to retailers.
On the state level, we have said — and will continue to say — that South Carolina should not extend special tax breaks to recruit and subsidize retailers: Retail traditionally brings low-paying jobs. When government provides an incentive to those businesses, it gives them an edge over competitors. It’s a practice that is sure to snowball into others demanding similar treatment.
That said, there have been times when we have endorsed local governments giving incentives to private investors, including retailers. One such instance was when Columbia gave a developer $1.6 million to help transform the Confederate Printing Plant into a Publix, to help boost the once-blighted Vista. Mast General got similar assistance via stimulus funds when it moved to Main Street as part of the effort to spur downtown revitalization. The same concept is at play with the city’s promise to spend millions of dollars on infrastructure to help a developer build a huge mixed-use project at the old State Hospital site on Bull Street, which would place a nearly 200-acre site on the tax rolls and spur development across the region.
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The intent in each of these instances wasn’t simply to make a private enterprise a success; that’s not government’s job. While it can be argued that the city promised too much in the Bull Street deal, the idea is to provide limited, reasonable local incentives to help a private investor develop a blighted area or redevelop key property that would otherwise sit dormant, yielding little or no property taxes.
If County Council decides to begin extending such incentives, it should adopt — and communicate to the public — rules that spell out the circumstances and the degree to which it will offer the perks. Over the years, the county has chosen not to give incentives to retail businesses, hewing instead to the more conservative approach of offering breaks only to manufacturers and large employers that bring hundreds of jobs and higher wages. But council members considered doing it for Costco, feeling that adding this retailer to the market, with the economic impact it would bring, was worth taking the unprecedented step.
But the deal has foundered, with the developer claiming the county didn’t provide enough of an incentive and Richland officials saying they were blindsided when the developer pulled back.
Whether this deal gets done or not, County Council must clarify whether its longstanding policy against offering incentives to retailers has come to an end.