Betty Poore: What's New on the Charleston Coast Blog: January 2008

Right Course for Beach Funds

Sunday, January 27, 2008


So far so good for what state Sen. Chip Campsen describes as a "creative way" to finance beach renourishment at the Isle of Palms as well as four other beaches in the state that are rated as the most endangered. The senator's legislation, which passed its first crucial test last week, doesn't involve either state or federal taxpayer funding. Instead, his Beachfront Finance Act would allow the five beach communities rated as having the worst erosion problems to keep all of their locally-generated accommodations tax dollars at home rather than sharing them with other parts of the state.

The senator tells us that he came up with the idea after being contacted by Isle of Palms officials about introducing legislation aimed at making the public beach inside the gates of the Wild Dunes resort eligible for state and federal funding. Sen. Campsen tells us he has since advised island officials that the bill, which would make changes to the definition of public beach access, stands no chance of passing.

The senator tells us he had qualms about the first bill from the outset, but felt it was his duty as the senator from the area to try to assist with the island's critical erosion problem. Meanwhile, he said, he began considering other ways to help the island save its erosion-threatened northern end that includes the Wild Dunes properties. The result was the Beachfront Finance Act that got a unanimous nod from a Senate Finance subcommittee Tuesday. Basically, the bill removes the so-called "Robin Hood" provision from the state accommodations tax for the five beach communities that are rated as having the most critical erosion problem. That annual rating would be done by the state Office of Coastal Resource Management.

The state's accommodations tax has a complex "Robin Hood" formula that guarantees those counties with virtually no public accommodations a minimum rebate that comes from the "donor" counties that bring in the most funds. The Campsen legislation would allow the top five endangered beach communities to keep all of their accommodations tax to combat beach erosion. Sen. Campsen estimated that would mean an estimated $95,000 annually for the Isle of Palms. Those funds, he said, are critical to finance the proposed $2 million bond issue island officials hope to issue to deal primarily with the beach problem at Wild Dunes.

Sen. Campsen convincingly argues that it is only fair to allow the island communities that face the worse erosion problems to keep all the accommodations tax their facilities generate. To require those communities to share some of their funds with other counties would be equivalent to asking New Orleans to send some of the money it needs for hurricane relief elsewhere, he said.

The senator tells us that he was particularly encouraged by the reception the bill got from the subcommittee that was composed of Upstate senators, including some whose counties would lose some of the "Robin Hood" funds. He advised Isle of Palms Mayor Mike Sottille by letter that those senators "understood the dire predicament many coastal communities are in, and the equity contained in the bill." He also cautioned, however, that the legislation "still has a long way to go" before it becomes law.

The legislation certainly has equity on its side. Clearly the accommodations tax is an appropriate source of funding for beach renourishment since it is paid by those who come to visit the communities in question primarily because of their location and access to the water. Sen. Campsen now is on the right course.

Labels: beach, Charleston Coast, funds, Isle of Palms, SC

Here's the full text of an article in Tuesday's Post and Courier.

Isle of Palms aims to get rolling on beach renourishment by spring

By Prentiss Findlay (Contact)
The Post and Courier
Tuesday, January 15, 2008

ISLE OF PALMS — Construction of a new beach that would offer protection to dozens of condominiums threatened by tides at the erosion-scarred northeast end of the island is likely to begin six months earlier than projected, officials said Monday.

"Obviously, time is of the essence. We were advised that we should request an earlier start time if possible," said Tim Kana, president of Coastal Science & Engineering of Columbia.

Kana said regulatory agencies suggested moving the project start time up to spring. "I think it's doable," he said.

The city on Monday asked state Ocean and Coastal Resource Management and the Army Corps of Engineers to approve pumping up to 885,000 cubic yards of sand on 2.6 miles of beach from 47th Avenue to Dewees Inlet, according to a copy of the new application. The endangered homes are at the northern reach of the project, toward the inlet. Previously, the project was expected to start in November.

The city's estimated 20 percent share of the cost of the $9.7 million project could change after the project is bid and a contractor selected, said City Manager Linda Lovvorn Tucker. Wild Dunes, where the worst erosion threatens condos, would pay $6.8 million through its affected property owners, the Wild Dunes Community Association and Wild Dunes Resort.

"We're very confident that we will be able to obtain the balance of the full amount of the project," said Dave Kynoski, association general manager.

Meanwhile, a temporary restraining order is set to expire today that was won by Wild Dunes property owners to keep OCRM from removing sandbags from in front of six condominium complexes and two other properties. Lawyers have scheduled a conference for Thursday, and the regulatory agency won't take any action before then, Dan Burger, OCRM communications director, said in an e-mail.

The city met with Charleston County Council and sent a letter to OCRM regarding their possible funding of the effort to address the erosion problem, but it hasn't gotten a response from, Tucker said.

City Council on Thursday approved a plan to borrow $2,013,500 for the project using hospitality and accommodations tax revenue. Mayor Mike Sottile said OCRM is providing guidance to the town on the accelerated schedule for the beach renourishment project. Although much of the erosion-scarred beach up for replenishment is at gated Wild Dunes, the beach renourishment is an important effort for the entire island, he said.

"Two years from now, we could have erosion at Breach Inlet. We're breaking new ground here as far as what we're doing. We're setting a precedent," he said.

The S.C. Department of Natural Resources made recommendations regarding the depth and location of the underwater digging that have been incorporated in the revised application, which also includes U.S. Fish and Wildlife Service draft recommendations that the beach renourishment project happen outside the main turtle nesting and hatching season. The agency also suggests that contributions be made to the Cape Romain National Wildlife Refuge Turtle Project to offset impacts to loggerhead sea turtles. The USFWS says the contractor can put sand on the affected area of beach only once during the project.

Bo Petersen contributed to this story. Reach Prentiss Findlay at 937-5711 or pfindlay@postandcourier.com.

Labels: beach, Charleston Coast, Isle of Palms

Here's the full text of an article in Friday's Post & Courier:

IOP to pay 20% of sand bill
By Prentiss Findlay (Contact)
The Post and Courier

Friday, January 11, 2008

ISLE OF PALMS — The town will pay about 20 percent of the nearly $10 million cost of pumping sand onto the beach where erosion threatens homes at the northeast end of the island, Town Council decided Thursday night.

Wild Dunes resort property owners and management would pay for most of the work. The state and county would chip in about 9 percent of the project cost. "I do feel the city has a responsibility to those people, and we do need to participate at some level," said Mayor Mike Sottile.

The city will borrow $1.7 million over six years and repay it through accommodations and hospitality tax revenue. With interest, the cost to the city is about $2 million. The average annual payment will be $336,000, said Dee Taylor, Council Ways and Means Committee chairman.

Taylor proposed the details of the city revenue bond plan to help residents of erosion-plagued Wild Dunes. His council-approved plan calls for entities such as the Wild Dunes Community Association and Destination Wild Dunes to pony up about 70 percent of the necessary funds before the work begins. The total cost of the project will be deposited in a city escrow account ahead of time.

"This is an historic vote," Taylor said.

The project, which will restore the beach from 46th Avenue to Dewees Inlet, will not affect city operations or cause a property tax hike, Sottile said.

Council also approved entering a $560,000 contract with Coastal Science and Engineering to move forward with obtaining permits for the project from state Office of Ocean and Coastal Resources Management and the U.S. Army Corps of Engineers. In addition to the $2 million bond issue approved Thursday, the town committed $200,000 to the project in November. The renourishment could begin as early as the spring, but the timing will depend on whether government officials require a lengthy environmental study.

The stretch of mostly private beach approved for renourishment has severe erosion that threatens houses and a golf course. Affected property owners have been using thousands of sandbags to try to lessen the effect of tides, which are washing under buildings, damaging utility lines and edging the buildings closer to being condemned. Last month, state regulators refused to extend an emergency order letting the sandbags stay, saying that they worsen erosion.
Council explored a number of scenarios for the beach renourishment project, including having the city pick up anywhere from 100 percent to 25 percent of the project tab. Council rejected those options because they would require a property tax hike.

As an alternative, Councilman Dick Cronin proposed using $700,000 of the $1.6 million in accommodations and hospitality taxes that the city has on hand in addition to the $2 million it would spend on revenue bonds. No one seconded the motion.

Reach Prentiss Findlay at 937-5711 or pfindlay@post andcourier.com.

If you would like to see the original article, click here.

My January Real Estate Newsletter is now live for your review. Just click on the image, find it on my website or go to this link. There is a great article on tax breaks that I think you will find interesting, especially this time of year.

Just a brief post today to let you know about a fantastic podcast Mark and I listened to recently.

If you love music in general - and opera in particular - you will love the story about Wagner's "Ring" series told in a WNYC Radio Lab podcast from 2004.

Go to Mark's Idea Blog post for details and links. I'm sure you'll enjoy it as much as we did.

Labels: music, podcasts

Jonathan Clements of the Wall Street Journal did an informative personal finance video on measuring return on investment with real estate. Although the formulas aren't foolproof, his thoughts are valid and interesting.

Labels: island investments, real estate