Officials divided over Bass Pro Shops state tax incentive

By Ashley Barker
abarker@scbiznews.com
Published March 12, 2014

The owner of Carolina Rod & Gun Inc. in West Ashley doesn’t have a problem with Bass Pro Shops encroaching on his territory. What Neil Schachte, who has owned the business for 35 years, does take issue with is the big-box store receiving state tax incentives.

Schachte, along with Republican Congressman Mark Sanford, said during a Lowcountry Local First event on Friday that tax incentives awarded by North Charleston City Council to Bass Pro Shops are unfair.

An artist’s rendering shows what the Bass Pro Shops Outdoor World store in North Charleston will look like when it opens in 2015. (Image provided by Bass Pro Shops)
An artist’s rendering shows what the Bass Pro Shops Outdoor World store in North Charleston will look like when it opens in 2015.
(Image provided by Bass Pro Shops)
Bass Pro Shops Outdoor World plans to open a 130,000- to 150,000-square-foot store in North Charleston at the intersection of Interstate 26 and Northside Drive. Construction is underway and expected to be complete in 2015.

The store was labeled an “extraordinary retail establishment” and was given a tax incentive through the state’s Tourism Infrastructure Admissions Tax Act.

For the first 15 years of operation, between one-fourth and one-half of the establishment’s sales taxes will be paid into a fund for North Charleston to use directly or indirectly for infrastructure improvements. Preference will be given to the business's wishes, according to the act.

The law says this money could be used for expenses such as construction, parking, roadways and utilities. In addition, it could go toward building an aquarium, natural history exhibit or museum located in or nearby the retail establishment.

If the business doesn’t hit all of the legal guidelines, one-fourth of the money would be transferred into an account for tourism development grants. Municipalities or counties within five miles of the retail establishment can apply for grants from this fund.

In exchange, Bass Pro Shops must make a $25 million capital investment and draw 35% of its visitors from at least 50 miles away. At least one hotel must also be built within three years to serve the location, according to the tax act.

“It doesn’t make sense that we would subsidize a big company like that to come in,” Schachte said. “It seems counterproductive to put money there when there’s so many other places it could go.”

He said he’d like to see more stores like Bass Pro Shops because they bring a larger fishing and hunting audience to the area and increase awareness of the sports.

“It’s just about making an equal playing field. I’m so tired of one guy getting an advantage over another. The state is not in business to decide who is going to win,” Schachte said.

Jamee Haley — executive director of Lowcountry Local First, an advocacy group for local, independent businesses and farmers — said Bass Pro Shops has received $1.3 billion in tax incentives over the past 15 years.

“What we don’t want to see is incentives being given to our businesses’ competitors,” she said. “They’re coming and doing business here on the back of small business.”

Congressman considers the issue

Sanford said the North Charleston deal would be worth somewhere between $15 million and $25 million of taxpayer money. The congressman, who was formerly the governor of South Carolina, has a lengthy history on the subject. When North Charleston was courting a Cabela’s store, then-Gov. Sanford vetoed the retail incentive tax bill twice. The Legislature, however, overrode both vetoes.

Sanford supports tax incentives for manufacturing companies that come to the state, but he said retail incentives “pay for what you’re already going to get.”

“In the cases of manufacturing, we’re going to offer incentives as we’re in this big competition both regionally, nationally and, in some cases, internationally,” Sanford said. “Retailers follow purchasing power. If you have a company that has come, like a Boeing, that then creates a lot more buying and spending in the district. The retailers are going to come.”

With Bass Pro Shops already in Myrtle Beach, Charlotte, Atlanta and Savannah, along with Cabela’s planning stores in South Carolina, Sanford said going to North Charleston would be inconvenient for out-of-town customers.

“If you’re coming from like Knoxville, Tenn., you have to drive past another major sporting goods store to get to this one, and you’re telling me people are going to do that?” Sanford said. “The reality is I think much of the purchasing will take place here within the region, which is to say you’re taking it from local folks.”

Even though Sanford sees the North Charleston Bass Pro Shops as a done deal, he hopes more extraordinary retail incentives aren’t launched. Too many incentives will water down the state’s ability to attract the Boeings of the world, he said, because there won’t be enough money left for manufacturing incentives.

“I love hunting and fishing. Our boys have grown up in that tradition,” Sanford said. “We would love Bass Pro, Cabela’s, Academy and everybody else to come here. The question is a matter of policy.”

North Charleston officials weigh in

Bobby Jameson, chairman of North Charleston’s Finance Committee, said the city has been working with Bass Pro Shops for a few years.

“The city looks at it as a good deal for the people. It’s going to be an enormous contribution to North Charleston and the entire area,” Jameson said, adding that Bass Pro Shops has to “have a certain amount of business outside of a 50-mile range. It’s not just going to be a benefit for the city of North Charleston, but a benefit to people at least 50 miles away.”

Jameson said the North Charleston Bass Pro will be four times bigger than the store in Myrtle Beach. Because of the size, Bass Pro is considering moving some of its other businesses to the area, according to Jameson.

“They might start manufacturing a portion of certain items here, like boats and trailers, instead of transporting them from (Bass Pro Shops’ headquarters in) Missouri to this enormous store,” he said.

Jameson doesn’t think Sanford should be in the mix when it comes to a local issue though.

“He’s in Washington now. This is a state issue, and he’s representing the state on federal issues,” Jameson said.

North Charleston Mayor Keith Summey agrees.

“Mark gets on these binges, and he just stays with it. He lost the first battle; he lost the second battle, and now he’s still fighting a battle,” Summey said.

The mayor said there are no tackle shops in North Charleston, and Bass Pro doesn’t offer bait and other items that an angler shop would carry, so small businesses won’t be hurt.

“At the end of the day, with us, it’s all about revenue,” Summey said. “This is not going to damage any North Charleston businesses.”

Reach Ashley Barker at 843-849-3144 or @AshleyNBarker.

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