WDW Properties v. City of Sumter

535 S.E.2d 631 (2000)

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WDW Properties v. City of Sumter

South Carolina Supreme Court
535 S.E.2d 631 (2000)

Facts

The Internal Revenue Code authorized the use of tax-exempt municipal bonds to finance business enterprises in blighted urban areas. These areas were known as empowerment zones. The downtown area in the city of Sumter (the city) (defendant) was designated as an empowerment zone. Uptown Synergy, LLC (defendant) was planning a development project in the downtown area. The project consisted of renovating rundown buildings and was expected to create jobs. In its application for financing to the South Carolina Jobs-Economic Development Authority (JEDA) (defendant), Uptown Synergy stated that the project would revitalize the downtown area. The JEDA sought to issue tax-exempt bonds so that it could loan the bond proceeds to Uptown Synergy to finance the project. Due to the tax-exempt nature of the bonds, Uptown Synergy would pay lower interest costs than it would pay if it had to obtain conventional financing. WDW Properties (plaintiff) brought suit, contending that it would violate the South Carolina Constitution to provide government-sponsored financing for Uptown Synergy’s project. The lower court found that it would be constitutionally permissible to provide government-sponsored financing for Uptown Synergy’s project. WDW appealed.

Rule of Law

Issue

Holding and Reasoning (Waller, J.)

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