After a brief executive session Monday afternoon, the Atlantic Beach Town Council unanimously approved the hospitality tax agreement proposed to settle the months-long dispute between Horry County and Grand Strand municipalities.
The 4-0 vote on the agreement resolution came with no public discussion among the council members.
Following the meeting, Mayor Jake Evans referred all questions about the council’s decision to town manager Benjamin Quattlebaum.
“Based on advice from the Myrtle Beach attorneys, we felt this was in the best interest of Atlantic Beach,” Quattlebaum said. “Their attorneys had briefed us earlier on the agreement.”
Quattlebaum said he did not know exactly how much revenue Atlantic Beach generates each year through the hospitality tax.
Atlantic Beach was the first local council to vote in favor of the deal. With the exception of the city councils in Loris and Conway, local governments throughout the county are voting on the proposed settlement Monday.
If approved, the settlement would resolve a lawsuit that the city of Myrtle Beach filed against Horry County in March over the county’s 1.5% hospitality fee, a levy that has traditionally been collected on restaurant meals, hotel stays and admission tickets sold countywide. The fee was created in the 1990s to pay for road projects such as S.C. 31 and S.C. 22.
The fee likely would have ended in 2019 if Horry County Council hadn’t removed a sunset provision in the ordinance that created it. That provision stated that once the road debt was paid off, the county could no longer collect that money.
County leaders had planned to use hospitality money for building I-73, but they also hoped to spend a portion of those dollars on improving public safety services. That upset some municipal leaders, who objected to fees being collected inside their borders paying for county services.
Although Myrtle Beach filed the lawsuit, court records state the case is also for a "class of similarly situated plaintiffs.” After the lawsuit was filed, municipal governments across the Grand Strand lined up in support of Myrtle Beach’s position.
So far, court rulings have gone in the cities’ favor. The county is barred from collecting the fee inside city limits while the lawsuit is pending.
But after an Oct. 31 mediation, county officials said they had a tentative agreement that each council would consider.
That proposal called for reestablishing a countywide 1.5% hospitality fee, which is projected to bring in $43.7 million per year annually, according to records obtained by myhorrynews.com.
As part of the settlement, more than $14.5 million of that money would be pledged to I-73. The city of Myrtle Beach would receive $12.8 million (the city collects the most fee revenue of any local government) and Horry County would get $8.5 million. North Myrtle Beach ($5.3 million), Surfside Beach ($1.1 million), Conway ($1.1 million), Aynor ($133,272), Loris ($160,288), and Atlantic Beach ($46,463) would each receive a share as well.
If Conway and Loris don’t support the settlement, local officials have questioned how that would impact the deal.