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Governor speaks out against incentives for retailers
By Kristen Poland
Staff Writer
Big box retailers are welcome in South Carolina, but not on the dime of the smaller, family-owned businesses that would be their competition. That was Gov. Mark Sanford’s message July 11 as he spoke from Haddrell’s Point Tackle & Supply in West Ashley.
The governor spoke later in the day from Brown’s Bait & Tackle in Duncan, S.C.
Sanford visited the two South Carolina towns to push for repeal of legislation that could mean, as the governor said, “life or death to a lot of small businesses in the state.” The legislation would allow the state to award tax incentive packages to large, outdoor retailers like Bass Pro Shops and Cabela’s.
The legislation, which passed the General Assembly recently despite the governor’s veto, qualifies the retailers for job tax credits for every full-time position and up to 50 cents in rebates for every dollar generated in sales tax. While these types of incentives packages are typically used to draw large manufacturers and industry to states, it is not common to use such practices for retailers.
The legislation expands on a bill that passed last year—also in spite of Sanford’s veto—when Cabela’s first expressed interest in building a store in North Charleston. Now it has been modified to include Bass Pro Shops in the hopes of enticing the outdoor retailer to locate the Upstate. To date, neither company has committed to opening stores in the state.
“I’m not here to say I don’t want Cabela’s or Bass Pro Shops to come to South Carolina, but I don’t think it makes good common sense to penalize small, family-owned businesses by using their tax dollars to bring new retailers to the state,” Sanford said.
“Business shouldn’t be grown based on who has the best lobbyists in Washington; you ought to grow your business by competing in the marketplace.”
The governor cited several other states that have grappled with the idea of offering incentives packages to large retailers like Cabela’s or Bass Pro Shops. States like Indiana, Georgia, Kentucky and Maine have rejected such legislation, while other states, including Kansas and Texas, asked the outdoor retailers to return rebate dollars after they did not fulfill sales requirements stipulated in the incentives package.
While similar sales requirement exist in South Carolina’s package, according to the governor they are hollow because the retailers receive guarantee of the benefits before they ever open their doors. While the bill stipulates that the retailers must attract 3.5 million visitors annually, invest at least $25 million and reach $33 million in sales, the tax benefits may be awarded based on assumptions that these numbers will be reached.
“This legislation is premised on false promises,” Sanford said, noting that Cabela’s and Bass Pro Shops have a combined 82 stores across the country. “If each store attracts 3.5 million visitors each year, that means that every man, woman and child in America would have to visit one of these stores.”
Sanford also refuted the idea that these companies are “destination retailers,” saying that few people will travel to South Carolina to shop at one of these stores given the proximity of Bass Pro Shops currently located in Atlanta, Savannah, Charlotte and Myrtle Beach.
“The people shopping there are going to be people who are already shopping in South Carolina at stores like this one,” Sanford said.
Lastly, Sanford cited two retail companies—Tanger Outlet Centers and Sportsman’s Warehouse—that located in South Carolina without incentives. The governor said representatives from Tanger Outlet Centers approached about five years ago with a request for an incentives package, which he rejected.
“I told them we’d love for them to come join us in South Carolina, but that we wouldn’t be able to help them in that way,” Sanford said. “They came here anyway.”
Most recently and perhaps most significantly, Sportmans’ Warehouse—a competitor of both Cabela’s and Bass Pro Shops—announced plans to open a 65,000-square-foot store near Northwood’s Mall.
The governor pleaded with his audience—which included owners of several local outdoors shops—to join him in speaking out against the legislation.
“If enough people make their voice heard with their senators or representatives, I think that can make a difference,” Sanford said.
Steve Zobel, owner of Bootjack, which sells outdoor footware, said that while his store can compete price wise with Cabela’s or Bass Pro Shops, he feels it is unfair for the large retailers to receive special treatment.
“It is unfair for the government to give money to a business when we had to reach into our pockets to start ours,” Zobel said. “I don’t mind a level playing field—but I do mind one that isn’t level.”
Echoing Zobel’s sentiments were Caroline Rhodes from Charleston Angler, Mike Able from Haddrell’s Point Tackle and Supply and Dee Meador from Luden’s Outfitters.
“I don’t mind competition,” Meador said, “but I don’t want them coming in on our tax dollars.”
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