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The state Board of Economic Advisors, whose duties include assessing the fiscal ramifications of legislation, has issued five statements since April regarding the three pending bills that propose the incentives. The past three statements question whether retail developments created with the help of incentives would generate new sales or merely shift sales from existing competitors.
The first two statements do not mention such concerns. A spokesman could not explain the difference.
The most recent statement is dated Jan. 28. Like the others, it was written by an analyst and signed by chief economist William Gillespie.
It assesses Senate Bill 1054, sponsored by Sens. Clementa Pinckney, D-Ridgeland, and Gerald Malloy, D-Hartsville.
"This bill does not help to create productive capacity that sells product outside the state," the statement reads. "Because the facility adds to an already well-established retail sector, it is difficult to expect the facility will create new sales, but rather will shift sales from existing retailers and not add to sales that would otherwise occur in the absence of the provision."
The statement underscores a primary argument made by opponents of the incentive proposal.
They say The Sembler Co., developer of Okatie Crossings, would "pirate" tenants from existing shopping centers near Sembler's site at the intersection of U.S. 278 and S.C. 170.
Customers would still pay all sales taxes, but the proposal would return some of that revenue to developers of some "extraordinary commercial facilities," including those for retail.
The proposal would set aside a portion of such revenues, which normally would go to the state, and instead give it to the developer to offset building costs.
Sembler estimates the incentives would be worth about $40 million. Others have valued them at more than $130 million.
State Sen. Tom Davis, a critic of the incentive proposal, said Gillespie's statements bolster concerns about retailers being lured from nearby centers.
Existing shopping enters that would compete with Sembler for tenants are lobbying against the proposal. They say Sembler has approached their tenants about opening stores in Okatie Crossings. Sembler officials say those retailers would continueoperating their existing stores and open a new ones at Okatie Crossings.
Davis hopes Gillespie's statement will undermine support for the proposal, a version of which recently passed the Senate Finance Committee.
"This is supposed to be a neutral, objective assessment, so lawmakers can make an informed and rational opinion," Davis said. "The economic impacts seem to be negligible."
Pinckney said he could not comment on the economist's statements because he hasn't seen them. He said he stands behind Okatie Crossings, where Sembler plans to invest $400 million and create as many as 2,500 jobs in a relatively poor, rural area.
"It will be interesting to take a look at this," Pinckney said of the statements. "I still think the project is a worthwhile project."
A recent analysis of Sembler's plan by Julie Flowers, who was the state's tourism economist until she retired two weeks ago, demonstrates the positive impact Okatie Crossings would have on the Lowcountry's economy, Pinckney said.
Sembler commissioned Flowers to assess the economic benefits that would "spin off" from Okatie Crossings using calculations she often did while working at the state's Department of Parks, Recreation & Tourism, said Larry Marchant, a lobbyist who provided her analysis.
In a letter to Sembler president Jeff Fuqua, Flowers said the project would create 4,900 jobs. That figure includes 2,500 permanent jobs as well as 970 leisure and hospitality jobs in the region and indirect impacts on suppliers and other businesses.
