Horry County Council will cancel its I-73 contract with the state Department of Transportation in 90 days unless the county can reach an agreement with local municipalities to jointly pay for the road, according to a resolution council passed Wednesday.
County leaders maintain they don’t have enough money to pay the DOT for work on the proposed interstate without additional city funding. Some county officials had said they planned to cancel the contract as early as Wednesday because of their ongoing dispute with the cities over hospitality fees. But after more than 90 minutes of meeting behind closed doors, council members opted to postpone the DOT agreement and issue a notice to the cities rather than scrap the deal altogether.
“This is kind of a compromise,” council chairman Johnny Gardner said of extending the deal. “It doesn’t cost us any money.”
Council members actually took two votes. They voted to postpone approving any projects for the DOT agreement until Dec. 31 and they agreed to cancel the contract unless they receive additional support from the cities.
The latter vote was unanimous, but the DOT extension passed 9-1 with councilman Al Allen opposing any delay.
“There’s no reason to continue an extension of this contract with Horry County being the only one on it,” he said. “We can always renegotiate a contract if and when the funding’s available.”
The contract's demise seemed all but certain when the county and officials from Grand Strand cities hit an impasse earlier this month during mediation for the cities’ lawsuit against the county over the fees.
So far, the cities have prevailed in court and the rulings have prohibited the county from collecting its 1.5 percent hospitality fee on restaurant meals, hotel stays and admission tickets inside municipal borders.
County officials had planned to use hospitality fee revenues to pay for $12.4 million worth of projects in the first year of the DOT contract as well as tens of millions more in subsequent years.
In June, DOT Secretary Christy Hall warned that the state could be forced to withdraw its request for a $348 million federal grant for I-73 because of uncertainty about how much local tax money would be available for that project.
State officials told the county a decision would need to be made by Oct. 1, but the county had to give the DOT that notice at least 30 days in advance. DOT officials confirmed last week that the grant application for federal funds had not been withdrawn.
Gardner said the 90-day deadline would place the ball in the cities’ court and he worried canceling it now would impact the lawsuit with the cities or the federal grant.
“You understand the irony of that. Myrtle Beach is the one that would benefit the most from I-73,” he said. “Myrtle Beach is the one that filed the lawsuit that jeopardized the very fund with which to build the road.”
After the DOT contract was approved last year, the first work plan proposed by the state included road design and right-of-way acquisitions for I-73. The plan also called for a $410,000 study of S.C. 22, which flooded after Hurricane Florence. The study would look at the cost of raising that road above flood conditions.
In South Carolina, the proposed interstate's design is split into two segments. The southern section leg links S.C. 22 with I-95 near Dillon, while the northern leg continues to S.C. 38 at the state line near Hamlet, North Carolina. County officials have said that by ponying up some hospitality money for the interstate, the federal government could match those contributions.
But the sparring between the city and the county has drawn criticism from I-73 supporters, including U.S. Rep. Tom Rice, R-Myrtle Beach. Rice has said the feud could potentially cost the I-73 project millions.
“The county made that commitment,” Rice said earlier this summer. “DOT relied on it when they made the federal grant [application]. If we don’t keep it, then we’re wasting our time. It’s such an awful shame that this is happening right now when we’re at the doorstep of getting some federal money.”
The legal fight between the cities and the county began earlier this year when Myrtle Beach leaders decided they no longer wanted the county collecting the hospitality fee inside city limits. North Myrtle Beach and Surfside Beach leaders agreed with Myrtle Beach, which sued the county in March.
The cities maintain the hospitality tax agreement they supported in the 1990s expired in 2017 and the county never obtained their permission to extend it. They have also objected to county officials’ suggestion that some of the money be used for improving public safety services in the county.
City officials insist they support I-73, but they don’t want to continue the traditional hospitality fee system. Earlier this year, the cities approved new fee structures that did not require them to share similar revenues with the county.
County officials have argued that the longstanding fee system brings in over $12 million more per year than the cities' proposal. That's because the state law that the 1.5 percent fee was created under has changed and the current statute won’t allow the cities to collect as much if they create their own fees. County leaders presented a plan to share hospitality fee revenues to the cities, but city officials rejected their proposal.
After Wednesday’s vote, Myrtle Beach spokesman Mark Kruea said he was pleased the county didn’t end the I-73 agreement immediately.
“As an interim measure, that’s better than canceling the contract now,” he said. “As I understand it, the county has enough revenue from its hospitality fee [in the unincorporated areas] to go ahead and pay for the contract. The city has expressed a willingness to participate financially. Until the litigation is resolved, we can’t do that. But we want I-73 too and it behooves the governments to work together to make that happen.”
It’s unclear how Wednesday’s decision could impact the federal grant. DOT officials had warned the delays could force the state agency to withdraw its request. My Horry News had not received a response to that question at the time of this report.