Workshop focuses on diversifying Hilton Head's economy

After years of carefully controlling development -- and at times deliberately curtailing it -- the Town of Hilton Head Island might be more willing to strike deals in the future.

Town leaders spent much of the second day of an annual goal-setting workshop discussing ways to diversify the island's economy, which has long relied on residential construction and resorts.

Strategies broached during the meeting of town staff and council members included offering incentives to new businesses, buying land to partner with private interests, forming a redevelopment agency, hiring economic development staff and shifting marketing efforts to recruiting companies.

Such steps would mark significant changes for the town, which was previously sustained by tourism to such an extent that it developed a reputation for "chasing" other types of business away, town manager Steve Riley said.

Although the town was incorporated in 1983, in part to help slow growth, a new course is appropriate because the island is running out of room for new construction, and the recession has disrupted its two primary industries, Riley said after the day-long session at Honey Horn.

"We've successfully slowed things down, and the economy has slowed things down further," Riley said. "We really need to have a conversation about how we sustain and diversify the tax base."

Town officials have talked for more than a decade about the importance of redeveloping tired structures put up decades ago, during the first wave of the island's building boom. Those officials are coming to realize they might have to consider unheard-of steps for the island to remain prosperous, he said.

"What are you really prepared to step up and do?" Riley asked council members.

They largely support exploring options, although they want to strike a balance between protecting the town's assets and character and courting new investment.

Councilman John Safay said he is concerned about the town buying land to stimulate business and "essentially becoming a speculator." He does, however, want the town to pursue other methods of economic development, such as incentives.

Even though previous town leaders might never have dreamed of such things, they've become common around the country, he said.

"I'm not saying 'give away the farm,' " Safay said. "We have to be prepared to do these things if we're going to be competitive."

Councilman George Williams wondered if the town has sufficient staff to pursue business prospects. Fellow councilman Drew Laughlin questioned how far taxpayers would be willing to go.

"I wonder how much of this stuff we can generate widespread public support for," Laughlin said. "A lot of people are going to be opposed to the notion of doing any of this kind of stuff."

It was left unclear how the town's efforts would be paid for or how they would fit with those of the Lowcountry Economic Network, a public-private partnership charged with attracting development to the region.

Mayor Tom Peeples, a builder himself, said it's time the town begin the next phase of its evolution.

"The building development of Hilton Head Island is virtually over," Peeples said during a break. "We have to look for other opportunities to continue the economic viability of the town."

The workshop concludes today.