Real estate investors who redevelop vacant big-box
stores could be eligible for a new tax break under a bill being considered in
the state House.
The redevelopment credits would be extended to any retail building or
shopping center of more than 100,000 square feet that was more than 80 percent
vacant for at least a year. Local governments also could choose to set the
eligibility limit as low as 75,000 square feet.
"Big box" is the name commonly given to the large, boxy buildings that house
retail stores such as Wal-Mart, Kmart and Circuit City.
Supporters say such incentives would help fill these empty structures, which
can burden local communities by attracting crime, creating eyesores and
discouraging nearby investment.
Rep. Scott Talley, R-Spartanburg, introduced the bill.
"My goal is to provide an opportunity for folks to come in and take these
centers that were once job creators and bring them back to life," Talley said.
In the Lowcountry, the legislation could affect buildings such as the empty
153,000-square-foot Sam's Club on Rivers Avenue in North Charleston. Benderson
Development Co. of New York is handling the leasing of the property, but has yet
to find a tenant.
The site has been vacant since October, when Sam's Club, a membership
discount warehouse, moved to the Centre Pointe commercial development in North
Charleston.
Another potential candidate for the incentive is the 119,000-square-foot
Wal-Mart store off Glenn McConnell Parkway in West Ashley. That store will be
available this fall when a new Wal-Mart Supercenter opens a few miles away.
Wal-Mart officials have said they'll find a tenant to fill the space. But if
it remains vacant for more than a year, it could become eligible for the
incentive.
The bill, called the Retail Facilities Revitalization Act, would provide a
state income tax or local property tax credit equal to 25 percent of the cost of
renovating the building. The credit must be taken over a five-year period
beginning after the new business opens.
Talley proposed the legislation after the success of a similar bill passed
during the last session that extended tax breaks to developers renovating vacant
textile mills. That bill has led to several signifi-cant redevelopment projects
across the state, Talley said.
Rep. John Graham Altman, R-Charleston, is one of more than 20 co-sponsors of
the retail revitalization bill.
Altman sees the legislation as a way to entice small businesses to pool their
resources and redevelop vacant big-box sites so they could cluster together
under one roof. They'd have more incentive to do this if they could save money
through tax breaks, he said.
"You've got these big-box stores out there, and they're worth a lot if you
can use them, and they're worth nothing if you don't," he said.
Big-box sites typically have desirable features, such as ample parking and
highly visible locations, he added.
Talley agreed.
"Many times, these are valuable buildings in good locations, but the cost of
new construction is less than renovating," Talley said. "So hopefully, this (tax
break) will level the field."
Real-estate brokers also see the bill as a plus.
Charleston broker Erin England hadn't read the legislation, but said that on
its surface it sounded promising.
The redevelopment of vacant retail stores can help inject new life into an
area and cut down on urban sprawl, said England, a retail specialist for the
Colliers Keenan commercial real-estate firm. Not only does such revitalization
give neighbors more convenient shopping choices, it boosts community pride, he
said. "It's more than just a coat of paint."
The bill is in the House Ways and Means Committee. It must be passed on to
the Senate by May 1 if it's to be acted on during this session.
Caroline Fossi covers retailing. Contact her at 937-5524 or
cfossi@postand courier.com.
