Originally created 03/10/99

Exemption sought by Aiken club

AIKEN -- The posh and private Green Boundary Club on Whiskey Road wants to be exempt if Aiken decides to tax hotels, restaurants and bars.

In a letter to Aiken's mayor and city council -- a letter that also was meant to be private -- the Green Boundary's attorney said accommodations and hospitality taxes were never meant to apply to elite nonprofit clubs like itself that are not open to the public.

The exclusive club has a guest cottage and private rooms for select guests who want overnight lodging in understated elegance, devoid of commercial touches. And it serves drinks and gourmet cuisine, but only to members and their guests.

The club, which sits on nine acres of prime property in an old mansion district, will not benefit from projects the proposed taxes would fund, nor would it profit from the tourists those projects are supposed to draw, attorney James M. Holly said.

But the legal issue might get lost in the Green Boundary's monied mystique.

The South Carolina Legislature agreed in 1997 to let local governments tax lodging and prepared foods on the theory that tourists and visitors would bear most of the tax burden. The money could then be used for projects that would draw more tourists and visitors, creating profit for local businesses.

"Therefore, the burden of those taxes would not be imposed on those not benefiting from the new tax system," Mr. Holly wrote.

Aiken wants a 3 percent accommodations tax and 2 percent hospitality tax mainly to pay for a tournament-quality tennis center, skate park, expansions to sports tournament site Citizens Park, a new airport terminal, a new Public Safety station and live theater downtown. The taxes have passed one reading and come up for another, after a public hearing, on March 22.

The projects all have been promoted to establishments that would have to collect the taxes as assets that "will significantly increase tourism and have a significant impact and benefit on those businesses serving tourists."

That's just not true of the Green Boundary, which is operated by a nonprofit corporation that qualifies for federal tax-exempt status. Records show that the club does pay state and local taxes, however. Its 1998 tab was $9,667.11 in Aiken County and $4,099.31 in the city.

But in a work session this week, some members of city council were taken aback by the club's request for an exemption. They heard about it after Mayor Pro Tem Skipper Perry -- the only member vocally opposed to the new taxes -- had complained that the tax on food would hit local people, especially the working poor.

"We're not just talking about eating out by people who can easily afford a nice restaurant," he said. "We're talking about the little clerk who has to dash out for lunch every day. We're talking about people who have to budget lunch."

Then the Green Boundary's request came up.

"I'm sure this would be a real burden on the Green Boundary Club," said council member Lessie Price. "I don't know any of their members who make less than a quarter-million dollars a year, and they can't afford this?

Mr. Holly said Tuesday that ability to pay is not the issue but "basic fairness" is. And he wants the council to consider an exemption policy in a reasoned debate, not the press.

At first blush, City Attorney Gary H. Smith said the law doesn't mention exemptions or exceptions, and the council probably shouldn't deviate from the statute. But it has two weeks before the public hearing and final vote to research that issue.

"For a city that prides itself on doing things its own way and being innovative, you'd think it would carry that principle through all its affairs," Mr. Holly said.

The accommodations and hospitality taxes are expected to draw vigorous commentary. City Manager Roger LeDuc said he's heard from some businesses that are opposed, and from some that reluctantly agree that the projects involved are worth a temporary tax.

He said one other private organization, Woodside Country Club, has registered opposition to the taxes, but the Green Boundary is the only one to ask for an exemption.

Margaret N. O'Shea covers the city of Aiken for The Augusta Chronicle. She can be reached at (803) 279-6895 or scbureau@augustachronicle.com.


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