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Former mayor, council react to HTAX ruling

Posted: October 24, 2013 4:47 p.m.
Updated: October 25, 2013 5:00 a.m.

 

Earlier this week, those who supported and those who opposed using hospitality tax (HTAX) revenues to pay for the construction of a proposed sports complex in Camden learned that it would have been legal to use the funds for such a project. Circuit Court Judge Alison Renee Lee signed a ruling Oct. 18, filed Monday at the Kershaw County Courthouse, determining the city of Camden could have used HTAX funds to pay for the proposed two-story 44,000-square-foot complex.

Camden City Council voted to purchase a nearly 9-acre portion of the former Boylan-Haven-Mather Academy property on Campbell Street in March 2011 and announced that it planned to build the complex. Council later voted to set aside $350,000 worth of HTAX revenue to perform site preparation work. Soon after, the city announced it was negotiating with the YMCA of Columbia to manage operations. Later, council announced the city would use HTAX revenue to pay itself for any debt incurred to finance the facility’s entire construction at a cost of around $6 million.

Some local citizens and businesses objected. One group of citizens formed the Camden Referendum Recreation Coalition (CRRC), petitioning to halt the project and place a voter referendum on the November 2012 ballot. Another group, apparently led by resident Herbert Farber, formed the Camden Coalition for Responsible Government (CCRG). Farber and the CCRG sued filed a lawsuit against the city seeking a permanent injunction from using HTAX funds to pay for the sports complex.

While the city ended up placing its own referendum, as opposed to the CCRC’s, on the November 2012 ballot -- a referendum that failed by a slim 7 percent margin -- the legal question of HTAX funding of such a project remained undecided. Just a few days before the election, Nov. 1, 2012, Judge Lee heard arguments and testimony in the case. The only two people to testify were Farber and then City Manager Kevin Bronson.

In her Oct. 18 ruling, Lee wrote that Bronson’s testimony was “credible and persuasive,” but that Farber’s “provided no persuasive evidence” the legality of using HTAX revenue to fund the complex. Ultimately, Lee concluded, that the complex met the definition of being “tourist-related” and, therefore, that the use of local HTAX revenues to construct it was lawful.

Former Mayor Jeffrey Graham, who, in effect, led the effort to have the sports complex built, said he was pleased with Judge Lee’s ruling.

“I’m happy to hear that the court agreed with the city council’s position -- that the use of the hospitality tax for the recreation center was correct,” Graham said. “It is unfortunate an unwinnable lawsuit brought by a handful of folks was able to delay and, thereby, derail a worthwhile community project that would have enhanced our downtown, provided opportunities for young people, and brought much needed construction jobs to Camden.”

Turner & Padget Attorney Danny Crowe, who represented the city of Camden at the November 2012 hearing, not only categorized the ruling as a “well reasoned and solid interpretation of state law, but spoke to its status as a precedent-setting case.

“The ruling is not only beneficial to Camden, but all municipalities,” Crowe said. “It’s the first judicial interpretation of these statutes on this particular point, on what is tourism-related.”

Judge Lee’s ruling came up during council’s work session Tuesday afternoon. City Manager Mel Pearson informed council of the ruling in the city’s favor, calling it good news “from an administrative standpoint.” He said the city would not have to pay Farber’s and the CCRG’s legal costs, which he categorized as “significant.”

Councilman Walter Long, who supported the project, expressed pleasure with the ruling.

“I’m thrilled that what we thought all along (was) ruled in our favor, the fact that we don’t have to pay (their) attorney’s fees for what I thought was a frivolous lawsuit on something that we felt quite confident state law says we could do and, hopefully, in the future, we’ll consider hospitality tax money from the beginning,” Long said. “That’s a big win for the city. I’m sorry we had to fight it in the first place.”

Councilwoman Alfred Mae Drakeford, who also supported the project, also mentioned the precedent-setting nature of the case.

“A lot of other cities, they were watching what happened with that case … waiting to see the outcome. I think there are a lot of other places that are happy with the verdict,” Drakeford said.

“You read the order, it’s pretty clear,” Long added. “(Judge Lee) said that it was very clear their case seemed to be simply based on opinion and not on state law. I’m sorry it took as long as it did to resolve the case.”

Pearson agreed that it did take a long time for the judge to issue her ruling. He said he did not know why it took nearly a year, but noted that it did “consistently refer to the rule of law.”

Mayor Tony Scully and council members Willard Polk and Laurie Parks did not comment on the case.

The C-I contacted Farber, who said he planned to comment on the ruling, but had not done so by deadline Thursday.

Attempts to reach Bronson for comment by deadline were unsuccessful.

 

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