The Sembler Retail Incentive Deal:

An Economic Analysis

When the General Assembly convenes for the 2010 session, it will address a targeted tax incentives package (H 3722) that contains a variety of special-interest giveaways that failed to pass on their own merits. The largest on the table is a proposal to give a $132 million sales tax break to The Sembler Company, an Atlanta-based mall developer seeking to build a new retail complex in Jasper County.

In the version of H 3722 passed by the House, the Sembler Company would receive a 75 percent break on a portion of its state sales tax obligation and a 3 percent sales tax break to aid with infrastructure costs associated with the development of the property. In return, Sembler must invest a minimum of $100 million and hire a minimum of 1,000 employees.

An analysis by College of Charleston economist Peter Calcagno, Ph.D., on the incentive package under consideration by the General Assembly reveals why the proposal represents more bad public policy for our state:

• Incentives deals do not create new jobs.
• The Sembler deal represents the riskiest kind of venture - retail shopping centers.
• Lawmakers will be asking taxpayers to subsidize competition with local businesses.

Read the Executive Summary and complete economic analysis on the Sembler Company deal.